As filed with the Securities and Exchange Commission on January 28, 1998
Registration No. 333-21143
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
PRE-EFFECTIVE AMENDMENT NO. 2
ON FORM S-3 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
Citicorp Delaware 13-2614988
Citicorp Capital III Delaware 51-6506265
Citicorp Capital IV Delaware 51-6506266
Citicorp Capital V Delaware 52-6839454
Citicorp Capital VI Delaware 52-6839455
Citicorp Capital VII Delaware 52-6839456
Citicorp Capital VIII Delaware 52-6839457
Citicorp Capital IX Delaware 52-6839458
Citicorp Capital X Delaware 52-6839459
Citicorp Capital XI Delaware 52-6839460
Citicorp Capital XII Delaware 52-6839461
Citicorp Capital XIII Delaware 52-6839462
Citicorp Capital XIV Delaware 52-6839463
(Exact name of issuer as (State or other jurisdiction of (I.R.S. Employer
specified in its charter) incorporation or organization) Identification No.)
399 Park Avenue
New York, New York 10043
(212) 559-1000
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
Stephen E. Dietz
Associate General Counsel
Citibank, N.A.
425 Park Avenue
New York, New York 10043
(212) 559-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
John T. Bostelman
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. |X|
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If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering.|_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier registration statement for the same offering.
|_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |X|
<PAGE>
CALCULATION OF REGISTRATION FEE*
<TABLE>
<CAPTION>
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Title of securities Amount to Proposed Proposed Amount of
to be registered be registered maximum maximum registration fee
offering aggregate offering
price per price
unit
===========================================================================================================================
<S> <C> <C> <C> <C>
Notes of Citicorp (1) (2) (1)(4) N/A
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Preferred stock, depositary shares of Citicorp (1) (2) (1)(4) N/A
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Common stock of Citicorp(5) (1) (2) (1)(4) N/A
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Warrants of Citicorp (1) (2) (1)(4) N/A
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Capital securities of Citicorp Capital III (1) (2) (1) N/A
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Capital securities of Citicorp Capital IV (1) (2) (1) N/A
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Capital securities of Citicorp Capital V (1) (2) (1) N/A
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Capital securities of Citicorp Capital VI (1) (2) (1) N/A
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Capital securities of Citicorp Capital VII (1) (2) (1) N/A
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Capital securities of Citicorp Capital VIII (1) (2) (1) N/A
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Capital securities of Citicorp Capital IX (1) (2) (1) N/A
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Capital securities of Citicorp Capital X (1) (2) (1) N/A
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Capital securities of Citicorp Capital XI (1) (2) (1) N/A
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Capital securities of Citicorp Capital XII (1) (2) (1) N/A
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Capital securities of Citicorp Capital XIII (1) (2) (1) N/A
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Capital securities of Citicorp Capital XIV (1) (2) (1) N/A
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Guarantee obligations of Citicorp with
respect to the above-referenced capital (3) (3) (3) N/A
securities
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Subtotal for all securities listed above $6,104,706,250 N/A $6,104,706,250 $1,849,910.52 (8)
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Common stock of Citicorp (5)(6) 12,000,000
shares (7) $1,009,558,336 $ 320,684.01 (7)(8)
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Total N/A N/A $7,114,264,586 $2,170,594.53 (8)
===========================================================================================================================
</TABLE>
*This filing on Form S-3 constitutes the second pre-effective amendment to
Citicorp's Registration Statement on Form S-4, File No. 333-21143, filed on
February 5, 1997; this filing also acts as the first post-effective amendment to
Citicorp's Registration Statement on Form S-3, File No. 333-32065, filed on July
25, 1997 (such prior Registration Statements on Form S- 4 and Form S-3 are
referred to as the "Prior Registration Statements"). Pursuant to Rule 429 under
the Securities Act of 1933, the Prospectuses included herein are combined
prospectuses covering the securities separately registered under the Prior
Registration Statements; no additional securities are being registered hereby.
Upon effectiveness of this Registration Statement on Form S-3 in accordance with
Section 8(a) of the Securities Act of 1933, the securities registered pursuant
to this Registration Statement on Form S-3 shall be combined with those
securities registered pursuant to the Registration Statement on Form S-3, File
No, 333-32065, and the post-effective amendment to such Registration Statement
on Form S-3, File No. 333-32065, shall become effective concurrently.
The Capital Securities of Citicorp Capital X, Citicorp Capital XI,
Citicorp Capital XII, Citicorp Capital XIII and Citicorp Capital XIV (together
with the related rights of the holders thereof under the related Capital
Securities Guarantees and certain back-up obligations of Citicorp) were
registered under the Registration Statement on Form S-4; all other securities
covered hereby were registered under the Registration Statement on Form S-3,
File No. 333-32065, or earlier registration statements.
(1) In no event will the aggregate initial offering price of the notes,
warrants, preferred stock, depositary shares and common stock of Citicorp (other
than common stock for which a registration fee is being separately allocated
below) and capital securities of the above-referenced trusts (collectively, the
"Trusts") issued under this Registration Statement exceed $6,104,706,250, or the
equivalent thereof in one or more foreign or composite currencies, exclusive of
accrued interest and dividends, if any. In connection with the offering of
capital securities, a like amount of notes may be issued and sold by Citicorp to
any of the Trusts, in which event such notes may later be distributed for no
additional consideration to the holders of the capital securities of such Trust
upon a dissolution of such Trust and the distribution of the assets thereof.
(2) The proposed maximum offering price per unit will be determined from time to
time in connection with the issuance of the securities registered hereunder.
(3) The securities registered include the rights of holders of the capital
securities under the Capital Securities Guarantees and certain back-up
obligations of Citicorp as set forth in the Amended and Restated Declaration of
Trust of each Trust and the Indenture, in each case as such terms are defined
and as further described in the Registration Statement. The
<PAGE>
back-up obligations comprise the obligations of Citicorp to provide certain
indemnities in respect of, and pay and be responsible for certain costs,
expenses, debts and liabilities of, each Trust (other than with respect to the
capital securities). The Capital Securities Guarantees, when taken together with
Citicorp's obligations under the subordinated debt securities issued to the
Trusts, the Indenture and the Amended and Restated Declarations of Trust, will
provide a full and unconditional guarantee on a subordinated basis by Citicorp
of payments due on the capital securities. No separate consideration will be
received for any such obligations of Citicorp.
(4) This Registration Statement also covers contracts which may be issued by
Citicorp under which the counterparty may be required to purchase notes,
warrants, preferred stock, depositary shares or common stock. Such contracts
would be issued with notes, preferred stock, depositary shares, common stock or
warrants. In addition, any securities registered hereunder may be sold
separately or as units with other securities registered hereunder. This
Registration Statement also covers such indeterminate additional amount of
securities as may be required to be issued upon conversion, exercise or exchange
of warrants or convertible or exchangeable securities pursuant to the
antidilution provisions thereof. No separate consideration will be received for
(i) notes, shares of common stock or preferred stock or depositary shares that
are issued upon conversion of notes, preferred stock or depositary shares, or
(ii) notes, shares of common stock or preferred stock or depositary shares that
are issued upon exercise of warrants registered hereby.
(5) The aggregate amount of Common Stock registered hereunder is limited to that
which is permissible under Rule 415(a)(4) under the Securities Act of 1933.
(6) Refers to shares of Common Stock that may be offered in transactions
permitted to be registered on Form S-3, including shares to be offered for the
account of persons other than Citicorp.
(7) For purposes of the registration fee, for the purposes of calculating the
registration fee for that portion of the Common Stock registered under the
Registration Statement No. 333-32065 filed on July 25, 1997, the proposed
maximum offering price was $126.00 per share, which was based on the average of
the high and low prices reported on the New York Stock Exchange consolidated
tape on July 17, 1997, and for purposes of calculating the registration fee for
that portion of the Common Stock registered under Registration Statement No.
33-59791 filed on June 2, 1995, the proposed maximum offering price was $52.00
per share, which was based on the average of the high and low prices reported on
the New York Stock Exchange consolidated tape on May 30, 1995. All of the
$320,684.01 registration fee allocable to the Common Stock was previously paid
under such earlier Registration Statements.
(8) In accordance with Rule 429 under the Securities Act of 1933, the
Prospectuses included herein are combined prospectuses which also relate to the
Prior Registration Statements. The aggregate amount of securities eligible to be
sold and not previously sold under the Prior Registration Statements
($5,753,093,320) shall be carried forward. The aggregate registration fees paid
or carried forward in connection with the Prior Registration Statements for
those securities ($2,170,594.53) shall also be carried forward.
The Registrants hereby amend this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrants shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
EXPLANATORY NOTE
This Registration Statement contains four forms of prospectus: one to be
used in connection with the offering and sale of senior or subordinated Notes
(the "Note Prospectus"); one to be used in connection with the offering and sale
of such Notes that may be convertible into or exchangeable for other securities
registered hereby or securities of another issuer or Warrants (consisting of the
Note Prospectus with the alternate cover pages and the additional pages included
under the heading "Alternate Pages for Convertible Debt/Warrants Prospectus"
and, to the extent applicable, the pages from the Stock Prospectus (as defined
below) including the sections "Ratios of Income to Fixed Charges Including
Preferred Stock Dividends," "Description of Common Stock," "Description of
Preferred Stock" and "Description of Depositary Shares"and omitting, if not
applicable, the section "Description of Notes" from the Note Prospectus); one to
be used in connection with the offering and sale of Preferred Stock, Depositary
Shares and Common Stock (the "Stock Prospectus"); and one (including a base
prospectus and form of prospectus supplement) to be used in connection with the
offering of Capital Securities and Subordinated Debt Securities (as defined
therein) and the related guarantee obligations of Citicorp.
<PAGE>
CITICORP [LOGO]
CITICORP MAY USE THIS PROSPECTUS
TO OFFER -
SENIOR NOTES
SUBORDINATED NOTES
We will provide the specific
terms of these securities in
supplements to this Prospectus.
You should read this Prospectus
and the supplements carefully
before you invest.
Neither the Securities and Exchange
Commission, the Commissioner of Insurance of
the State of North Carolina nor any state
securities commission has approved these
securities. Nor has any such organization
determined that this prospectus is accurate or
complete. Any representation to the contrary
is a criminal offense.
These securities are not deposits or savings Citicorp
accounts but are unsecured debt obligations of 399 Park Avenue
Citicorp. These securities are not insured by New York, New York 10043
the Federal Deposit Insurance Corporation or
any other governmental agency or January 28, 1998
instrumentality.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Citicorp is subject to the information requirements of the Securities
Exchange Act of 1934, as amended. As required by such Act, Citicorp files
annual, quarterly and current reports, proxy statements and other information
with the Securities and Exchange Commission ("SEC"). You may read and copy any
Citicorp reports, proxy statements and other information filed with the SEC at
the SEC's Public Reference Room in Washington, D.C. You can also request copies
of these documents, upon payment of a duplicating fee, by writing to the Public
Reference Section of the SEC. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the SEC's Public Reference Rooms. Citicorp's SEC
filings are also available to the public on the SEC's Internet site
(http://www.sec.gov). Certain of Citicorp's SEC filings are available to the
public on Citicorp's Internet site (http://www.citicorp.com). Citicorp's common
stock is listed on the New York Stock Exchange, the American Stock Exchange, the
Chicago Stock Exchange and the Pacific Stock Exchange.
The following documents, filed with the SEC by Citicorp pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended, are incorporated
by reference in this Prospectus as of their respective filing dates:
o Annual Report and Form 10-K for the fiscal year ended December 31,
1996;
o Financial Reviews and Forms 10-Q for the quarters ended March 31,
1997, June 30, 1997 and September 30, 1997; and
o Current Reports on Form 8-K dated January 21, 1997, April 15, 1997,
July 15, 1997, October 21, 1997 and January 20, 1998.
All of the following documents which are filed with the SEC pursuant to
the Securities Exchange Act of 1934, as amended, after the date of this
Prospectus and prior to the termination of the offering of the securities
offered by this Prospectus are incorporated by reference into and are a part of
this Prospectus:
o Reports filed by Citicorp pursuant to Sections 13(a) and (c) of such
Act;
o Any definitive proxy or information statements filed pursuant to
Section 14 of such Act in connection with any subsequent
stockholders' meeting; and
o Any reports filed pursuant to Section 15(d) of such Act.
Any statement contained in this Prospectus or in a document incorporated by
reference in this Prospectus is modified or superseded for purposes of this
Prospectus to the extent that a statement contained in this Prospectus or in any
other subsequently filed document which also is incorporated by reference in
this Prospectus or in the Prospectus Supplement modifies or supersedes such
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<PAGE>
statement. Any statement so modified or superseded does not, except as so
modified or superseded, constitute a part of this Prospectus.
You should rely only on the information contained in this Prospectus, any
Prospectus Supplement or any Pricing Supplement. Citicorp has not authorized
anyone to provide you with any other information. The information in this
Prospectus, any Prospectus Supplement and any Pricing Supplement is correct only
as of the respective date of each document.
CITICORP
Citicorp, whose principal subsidiary is Citibank, N.A., is a holding
company incorporated under the laws of the State of Delaware on December 4,
1967. The principal office of Citicorp is located at 399 Park Avenue, New York,
New York 10043; its telephone number is (212) 559-1000. Through its subsidiaries
and affiliates, including Citibank, N.A., Citicorp is a global financial
services organization serving the financial needs of individuals, businesses,
governments and financial institutions in the United States and throughout the
world.
Holding Company
Citicorp is a legal entity separate and distinct from Citibank, N.A. and
its other subsidiaries and affiliates. Citicorp's bank subsidiaries are subject
to various legal limitations on the extent to which they may extend credit, pay
dividends or otherwise supply funds to Citicorp. For example, a national bank
subsidiary of Citicorp must obtain the approval of the Office of the Comptroller
of the Currency if its total dividends declared in any calendar year exceed net
profits (as defined) for that year combined with its retained net profits for
the preceding two years. In addition, such a bank may not pay dividends in
excess of the bank's undivided profits. Citicorp's state-chartered bank
subsidiaries are subject to dividend limitations imposed by applicable state
law. In determining whether and to what extent to pay dividends, each bank
subsidiary must also consider the effect of dividend payments on applicable
risk-based capital and leverage ratio requirements as well as policy statements
of the federal regulatory agencies that indicate that banking organizations
should generally pay dividends out of current operating earnings.
Citicorp also derives dividends from its non-bank subsidiaries. These
subsidiaries are not subject to regulatory restrictions on their payment of
dividends to Citicorp, except that a savings association subsidiary may be
required to obtain the approval of the Office of Thrift Supervision if total
dividends declared by the savings association in any calendar year exceed
amounts specified in that agency's regulations. In addition, there are numerous
governmental requirements and regulations that affect the activities of Citicorp
and its bank and non-bank subsidiaries.
Under longstanding policy of The Board of Governors of the Federal Reserve
System, a bank holding company is expected to act as a source of financial
strength for its subsidiary banks and to commit resources to support such banks.
As a result of that policy, Citicorp may be required to commit resources to its
subsidiary banks in circumstances where it might not otherwise do so.
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<PAGE>
Because Citicorp is a holding company, its rights, and the rights of its
creditors and stockholders, including the holders of the securities, to
participate in the assets of any of its subsidiaries upon a subsidiary's
liquidation or recapitalization will be subject to the prior claims of the
subsidiary's creditors, except to the extent that Citicorp may itself be a
creditor with recognized claims against the subsidiary.
USE OF PROCEEDS
Citicorp intends to apply the net proceeds from the sale of the securities
to its general funds to be used by its management for corporate purposes,
principally to fund investments in, or extensions of credit to, banking and
non-banking subsidiaries and to maintain adequate liquid balances. Except as
otherwise described in a Prospectus Supplement, Citicorp will not have made
specific allocations of the proceeds to such purposes at the date of the
applicable Prospectus Supplement, although the management of Citicorp will have
determined that funds should be raised at that time. The precise amount and
timing of such investments in and extensions of credit to the subsidiaries will
depend upon their funding requirements and the availability of other funds to
Citicorp and its subsidiaries.
RATIOS OF INCOME TO FIXED CHARGES
For the fiscal years ended December 31, 1997, 1996, 1995, 1994 and 1993,
Citicorp's consolidated ratios of income to fixed charges, computed as set forth
below, were as follows:
Year Ended December 31,
------------------------------------------
1997 1996 1995 1994 1993
Income to Fixed Charges:
Excluding Interest on Deposits 2.58 2.69 2.31 1.76 1.44
Including Interest on Deposits 1.43 1.42 1.31 1.18 1.18
For purposes of computing the consolidated ratio of income to fixed
charges, income represents net income, before extraordinary items and cumulative
effects of accounting changes, plus income taxes and fixed charges. Fixed
charges, excluding interest on deposits, represent interest expense (except
interest paid on deposits) and the interest factor included in rents. Fixed
charges, including interest on deposits, represent all interest expense and the
interest factor included in rents.
DESCRIPTION OF NOTES
Citicorp may use this Prospectus in connection with the offering of its
unsecured debt securities, which may be either senior or subordinated.
Throughout this Prospectus, Citicorp's senior unsecured debt securities are
referred to as "Senior Notes" and its subordinated unsecured debt securities are
referred to as "Subordinated Notes." The Senior Notes and the Subordinated Notes
are together referred to as "Notes." Other capitalized terms are used as defined
in this Prospectus. If terms are not defined in this Prospectus, they have the
meanings assigned to them in the
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<PAGE>
accompanying Prospectus Supplement. Both this Prospectus and the accompanying
Prospectus Supplement contain a Glossary that lists the page number on which the
definition of a term can be found.
The Senior Notes will be issued under an indenture dated as of September
1, 1989, as amended, between Citicorp and United States Trust Company of New
York, as trustee. Throughout this Prospectus, such Indenture is referred to as
the "Senior Indenture."
The Subordinated Notes will be issued under an indenture dated as of April
1, 1991, as amended, between Citicorp and The Chase Manhattan Bank (formerly
known as Chemical Bank), as trustee. Throughout this Prospectus, such Indenture
is referred to as the "Subordinated Indenture." The Senior Indenture and the
Subordinated Indenture are each referred to as an "Indenture" and together are
referred to as the "Indentures."
A copy of each of the Indentures is incorporated by reference as an
exhibit to the Registration Statement of which this Prospectus is a part. This
Prospectus contains a summary of only certain provisions of the Indentures and
is not a complete description of either Indenture. For a complete understanding
of the Notes and the applicable Indenture, we refer you to the applicable
Indenture.
Pursuant to the terms of the Registration Statement of which this
Prospectus forms a part, Citicorp may also offer its preferred stock, common
stock and other securities under such Registration Statement.
General
Each Indenture provides that Citicorp may issue Notes, in addition to the
Notes previously issued under the Indenture, in separate series from time to
time without limitation as to aggregate principal amount, as authorized from
time to time by Citicorp's Board of Directors. (Indentures ss.301). Citicorp may
offer the Notes at prices and on terms determined at the time of sale. The
particular terms of each series of Notes will be set forth in one or more
supplements to this Prospectus (collectively, the "Prospectus Supplement").
The Senior Notes of each series will be unsecured and will rank equally
with all other unsecured and unsubordinated indebtedness of Citicorp. The
Subordinated Notes of each series will be unsecured and will rank equally with
all other unsecured and subordinated indebtedness of Citicorp, other than
subordinated indebtedness which is designated as junior to the Subordinated
Notes.
Citicorp may use this Prospectus to offer series of Notes under
documentation other than and different from the Indentures, so long as the
material provisions of the documentation are described in the Prospectus
Supplement relating to such series of Notes.
The applicable Prospectus Supplement will describe the following terms of
the Notes of each series:
5
<PAGE>
o the title of the Notes and whether they are Subordinated Notes or
Senior Notes;
o any limit on the aggregate principal amount of the Notes;
o whether any of the Notes are to be issuable in global form;
o the price at which the Notes will be issued;
o the date on which the Notes will mature;
o the rate per annum at which the Notes will bear interest, if any, or
the formula pursuant to which such rate will be determined, and the
date from which any such interest will accrue;
o the interest payment dates on which any such interest on the Notes
will be payable and the regular record date for any interest payable
on any interest payment date;
o the person to whom any interest on any Note of such series will be
payable, if other than the person in whose name that Note is
registered at the close of business on the regular record date for
such interest, and the extent to which, or the manner in which, any
interest payable on a global Note on an interest payment date will
be paid;
o each office or agency where, subject to the terms of the applicable
Indenture as described below under "Payment and Paying Agents," the
principal of and any premium and interest on the Notes will be
payable and each office or agency where, subject to the terms of the
applicable Indenture as described below under "Form, Exchange,
Registration and Transfer," the Notes may be presented for
registration of transfer or exchange;
o the periods within which and the prices at which the Notes may,
pursuant to any optional redemption provisions, be redeemed, in
whole or in part, and the other terms and provisions of any such
optional redemption provisions;
o the obligation, if any, of Citicorp to redeem or purchase the Notes
pursuant to any sinking fund or analogous provisions or at the
option of the holder and the period within which and the price at
which the Notes will be redeemed or purchased, in whole or in part,
pursuant to such obligation, and the other terms and provisions of
such obligation;
o the denominations in which any Notes will be issuable, if other than
denominations of $1,000 and any integral multiple of $1,000;
o the currency or currency units of payment of principal of and any
premium and interest on the Notes, if other than U.S. dollars;
o any index or formula (which may be based on the value of any
currencies, commodities, securities or any group or combination of
the same) used to determine the amount of
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<PAGE>
payments of principal of and any premium on the Notes;
o if applicable, the fact that the terms of the applicable Indenture
described below under "Defeasance and Covenant Defeasance" will not
apply to such series;
o any additional restrictive covenants included for the benefit of the
holders of such Notes;
o any additional Events of Default provided with respect to such
Notes;
o information with respect to book-entry procedures, if any; and
o any other terms of the Notes consistent with the provisions of the
applicable Indenture. (Indentures ss.301).
Any Prospectus Supplement will also describe any special provisions for
the payment of additional amounts with respect to the Notes of such series. If
Citicorp has an obligation to redeem or purchase the Notes at the option of the
holder as provided in the applicable Prospectus Supplement, Citicorp will comply
with any applicable provisions of Section 14(e) of the Securities Exchange Act
of 1934, as amended, and the related rules and regulations in connection with
such redemption or purchase.
Citicorp may issue Notes of any series as original issue discount Notes.
An "original issue discount" Note is a Note, including any zero-coupon Note,
which is issued at a price lower than the amount payable upon its stated
maturity. An original issue discount Note provides that upon redemption or
acceleration of its maturity an amount less than the amount payable upon its
stated maturity, as determined in accordance with the terms of such Note, will
become due and payable. United States holders of original issue discount Notes
having a maturity of more than one year from their date of issue will have to
include original issue discount in income for federal income tax purposes as it
accrues, generally before receipt of cash attributable to such income.
To the extent described in the applicable Prospectus Supplement, Citicorp
may issue Notes convertible or exchangeable, at the option of the holder or
Citicorp, into common stock or other securities of Citicorp or another issuer.
Citicorp will describe any applicable conversion or exchange provisions in the
Prospectus Supplement.
Unless otherwise indicated in the applicable Prospectus Supplement, the
covenants contained in the applicable Indenture would not necessarily afford
holders of either the Senior Notes or the Subordinated Notes protection in the
event of a decline in credit quality resulting from takeovers, recapitalizations
or similar restructurings.
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Form, Exchange, Registration and Transfer
Citicorp will issue Notes of a series in registered form. Each Indenture
provides that Citicorp may issue Notes of a series in global form. See "Global
Notes."
Subject to the terms of the applicable Indenture, a holder of Notes of any
series may exchange such Notes for other Notes of the same series of any
authorized denominations and of a like aggregate principal amount and tenor.
Notes may not be exchanged for bearer Notes. (Indentures ss.305).
Any holder of a Note may present it for exchange as provided above, and
may present Notes for registration of transfer (with the form of transfer duly
executed), at the office of the security registrar or at the office of any
transfer agent designated by Citicorp. Exchange or transfer will be effected
without a service charge and upon payment of any taxes and other governmental
charges as described in the applicable Indenture. The security registrar or
transfer agent, as the case may be, will effect such transfer or exchange when
it is satisfied with the documents of title and identity of the person making
the request. Citicorp has appointed Citibank, N.A. as security registrar.
(Indentures ss.305). Citicorp may at any time rescind the designation of any
transfer agent (other than the security registrar) or approve a change in the
location through which any such transfer agent acts. However, Citicorp will be
required to maintain a transfer agent in each place of payment for a series of
Notes. Citicorp may at any time designate additional transfer agents with
respect to any series of Notes. (Indentures ss.1002).
In the event of any redemption in part of any series of Notes, Citicorp
will not be required to:
(i) issue, register the transfer of or exchange any Note during a
period beginning at the opening of business 15 days before any selection
for redemption of Notes of like tenor and of the series of which such Note
is a part, and ending at the close of business on the earliest date on
which the relevant notice of redemption is deemed to have been given to
all holders of Notes of like tenor and of such series to be redeemed; or
(ii) register the transfer of or exchange any Note so selected for
redemption, in whole or in part, except the unredeemed portion of any Note
being redeemed in part. (Indentures ss.305).
Payment and Paying Agents
Unless otherwise indicated in an applicable Prospectus Supplement,
principal of and any premium and interest on Notes will be payable, subject to
any applicable laws and regulations, at the office of such paying agent or
paying agents as Citicorp designates from time to time. However, at its option,
Citicorp may make payment of any interest by check mailed to the address of the
person entitled to such interest as such address appears in the security
register. (Indentures ss.201). Unless otherwise indicated in an applicable
Prospectus Supplement, payment of interest on a Note on any interest payment
date will be made to the person in whose name such Note is registered at the
close
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of business on the regular record date for such interest. (Indentures ss.307).
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporate Trust Office of Citibank, N.A. in the City of New York will be
designated as a paying agent for Citicorp for payments with respect to Notes of
each series. Any other paying agents initially designated by Citicorp for the
Notes of each series will be named in the applicable Prospectus Supplement.
Citicorp may at any time designate additional paying agents or rescind the
designation of any paying agent or approve a change in the office through which
any paying agent acts. However, Citicorp will be required to maintain a paying
agent in each place of payment for a series of Notes. (Indentures ss.1002).
After notice by publication, all moneys paid by Citicorp to a paying agent
for the payment of the principal of and any premium or interest on any Note of
any series which remain unclaimed at the end of two years after such principal,
premium or interest becomes due and payable will be repaid to Citicorp. After
repayment to Citicorp, the holder of such Note or its coupon may look only to
Citicorp for payment of such principal, premium or interest. (Indentures
ss.1003).
Global Notes
If any Notes of a series are issuable in global form, the applicable
Prospectus Supplement will describe the circumstances, if any, under which
beneficial owners of interests in any such global Note may exchange such
interests for Notes of such series and of like tenor and principal amount in any
authorized form and denomination. Principal of and any premium and interest on
any global Note will be payable in the manner described in the applicable
Prospectus Supplement. (Indentures ss.304).
Limitations on Liens on Stock of Citibank, N.A.
Citicorp has covenanted in the Senior Indenture that, so long as any of
the Senior Notes which mature more than ten years after their issuance are
outstanding, it will not create, incur, assume or suffer to exist any mortgage,
pledge, security interest or other encumbrance upon any shares of voting stock
of Citibank, N.A. owned by Citicorp as security for indebtedness for borrowed
money, unless such Senior Notes are secured equally and ratably with, or prior
to, such indebtedness. However, Citicorp may create, incur, assume or suffer to
exist any such mortgage, pledge, security interest or other encumbrance so long
as, after giving effect to the same, Citicorp will own at least 80% of the
voting stock of Citibank, N.A. then issued and outstanding, free and clear of
any such mortgage, pledge, security interest or other encumbrance. (Senior
Indenture ss.1005). The foregoing covenant also applies to the Subordinated
Notes issued prior to the execution of the first supplemental indenture
described below in "Certain Amendments to the Subordinated Indenture," but is
not a provision of the Subordinated Indenture and does not apply to any series
of Subordinated Notes issued since the execution of such first supplemental
indenture.
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Defaults; Events of Default
Unless otherwise provided in the applicable Prospectus Supplement, the
following are "Events of Default" under the Senior Indenture with respect to any
series of Senior Notes:
o failure to pay principal of or any premium on any Senior Note of
that series at maturity;
o failure to pay any interest on any Senior Note of that series when
due, continued for 30 days;
o failure to deposit any sinking fund payment, when due, in respect of
any Senior Note of that series;
o failure to perform any other covenant of Citicorp in the Senior
Indenture (other than a covenant included in the Senior Indenture
solely for the benefit of series of Senior Notes other than that
series) continued for 60 days after written notice of such default;
o certain events of bankruptcy, insolvency or reorganization of
Citicorp or Citibank, N.A.; and
o any other Event of Default provided with respect to Senior Notes of
that series. (Senior Indenture ss.501).
Unless otherwise provided in the applicable Prospectus Supplement, the
following are "Defaults" under the Subordinated Indenture with respect to any
series of Subordinated Notes:
o failure to pay principal of or any premium on any of the
Subordinated Notes of that series at maturity;
o failure to pay any interest on any Subordinated Note of that series
when due, continued for 30 days;
o failure to perform any other covenant of Citicorp in the
Subordinated Indenture (other than a covenant included in the
Subordinated Indenture solely for the benefit of series of
Subordinated Notes other than that series) continued for 60 days
after written notice of such default;
o any Event of Default provided with respect to Subordinated Notes of
that series;
o any other Default provided with respect to Subordinated Notes of
that series. (Subordinated Indenture ss.503).
Unless otherwise provided in the applicable Prospectus Supplement, the
following are "Events of Default" under the Subordinated Indenture with respect
to any series of Subordinated Notes:
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o certain events of bankruptcy, insolvency or reorganization of
Citicorp; and
o any other Event of Default provided with respect to Subordinated
Notes of that series. (Subordinated Indenture ss.501).
Unless an Event of Default has occurred and is continuing with respect to a
series of Subordinated Notes, neither the holders of such Subordinated Notes nor
the trustee under the Subordinated Indenture may declare the acceleration of the
payment of principal or premium, if any, of such Subordinated Notes under the
Subordinated Indenture.
Subject to the provisions of the applicable Indenture relating to the
duties of the related trustee, in case an Event of Default with respect to
either the Senior Notes or the Subordinated Notes occurs, or in case a Default
with respect to the Subordinated Notes occurs and is continuing, the trustee has
no obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders of Notes of any series or any related
coupons unless such holders offer the trustee reasonable indemnity. (Indentures
ss.ss.601, 603). The holders of a majority in aggregate principal amount of the
outstanding Notes of any series have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the related
trustee, or exercising any trust or power conferred on the trustee, with respect
to Notes of that series, provided that such direction does not conflict with
applicable law or the applicable Indenture or have a substantial likelihood of
involving such trustee in personal liability. (Indentures ss.512).
If an Event of Default with respect to Notes of any series at the time
outstanding occurs and is continuing, either the related trustee or the holders
of at least 25% in aggregate principal amount of the outstanding Notes of that
series may declare the principal, or, if any such Notes are original issue
discount Notes, such lesser amounts as may be described in the applicable
Prospectus Supplement, of all such outstanding Notes of that series to be due
and payable immediately. At any time after a declaration of acceleration with
respect to Notes of any series has been made, but before a judgment or decree
for payment of money due has been obtained by such trustee, the holders of a
majority in aggregate principal amount of outstanding Notes of that series may
rescind any declaration of acceleration and its consequences, if all payments
due (other than those due as a result of acceleration) have been made and all
Events of Default have been remedied or waived. (Indentures ss.502).
No holder of any Notes of any series or any related coupons will have any
right to institute any proceeding with respect to the applicable Indenture,
unless the following conditions are met:
o The holder gives to the related trustee written notice of a
continuing Event of Default, or of a continuing Default;
o The holders of at least 25% in aggregate principal amount of the
outstanding Notes of that series make a written request of the
trustee to institute such proceeding as trustee;
o The holders offer reasonable indemnification to the trustee against
the costs, liabilities and expenses of instituting such proceeding;
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o The trustee has not received from the holders of a majority in
aggregate principal amount of the outstanding Notes of that series a
direction inconsistent with such request; and
o The trustee has not instituted such proceeding within 60 days after
receipt of the request and offer of indemnification. (Indentures
ss.507).
However, such limitations do not apply to a suit instituted by a holder of an
outstanding Note of that series for enforcement of payment of the principal of,
or any premium or interest on, such Note on or after the respective due dates
expressed in such Note. (Indentures ss.508).
Citicorp is required to furnish annually to each trustee a statement as to
its performance or fulfillment of covenants, agreements or conditions in the
applicable Indenture and the absence of defaults thereunder. (Indentures
ss.1004).
Meetings, Modification and Waiver
Citicorp and the related trustee may make modifications and amendments of
each Indenture with the consent of the holders of not less than a majority in
aggregate principal amount of the outstanding Notes of each series affected by
such modification or amendment. However, if the modification or amendment would
result in any of the following events occurring, it may be made only with the
consent of the holders of each outstanding Note affected by the modification or
amendment:
o change the stated maturity of the principal of, or any installment
of principal of or interest on, any Note;
o reduce the principal amount of, or premium or interest on, any Note;
o change any obligation of Citicorp to pay additional amounts;
o reduce the amount of principal of an original issue discount Note
payable upon acceleration of its maturity;
o change the coin or currency in which any Note or any premium or
interest is payable;
o impair the right to institute suit for the enforcement of any
payment on or with respect to any Note;
o reduce the percentage in principal amount of outstanding Notes of
any series, the consent of whose holders is required for
modification or amendment of the applicable Indenture or for waiver
of compliance with certain provisions of such Indenture or for
waiver of certain defaults;
o reduce the requirements contained in such Indenture for quorum or
voting;
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o change any obligation of Citicorp to maintain an office or agency in
the places and for the purposes required by such Indenture; or
o modify any of the above provisions. (Indentures ss.902).
Under certain limited circumstances, Citicorp and the related trustee may make
modifications and amendments of such Indenture without the consent of any
holders of outstanding Notes. (Indentures ss.901).
The holders of at least a majority in aggregate principal amount of the
outstanding Notes of a series may, on behalf of the holders of all the Notes of
that series, waive, insofar as that series is concerned, compliance by Citicorp
with certain restrictive provisions of the applicable Indenture. (Indentures
ss.1007). The holders of not less than a majority in aggregate principal amount
of the outstanding Notes of a series may, on behalf of all holders of Notes of
that series and any coupons, waive any past default under the applicable
Indenture with respect to Notes of that series. However, such holders may not
waive any past default in the payment of principal of, or any premium or
interest on, any Note of such series or in respect of a covenant or provision of
the applicable Indenture which cannot be modified or amended without the consent
of the holders of each outstanding Note of such series affected. (Indentures
ss.513).
Each Indenture provides that the following principles will be used in
determining whether the holders of the requisite principal amount of the
outstanding Notes have given any request, demand, authorization, direction,
notice, consent or waiver or are present at a meeting of holders of Notes for
quorum purposes:
o the principal amount of an original issue discount Note that will be
deemed to be outstanding will be the amount of the principal that
would be due and payable as of the date of such determination upon
acceleration of its maturity; and
o the principal amount of a Note denominated in a foreign currency or
currency unit will be the U.S. dollar equivalent, determined on the
date of original issuance of such Note, of the principal amount of
such Note or, in the case of an original issue discount Note, the
U.S. dollar equivalent, determined on the date of original issuance
of such Note, of the amount determined as provided in the clause
above. (Indentures ss.101).
The trustee may call a meeting of the holders of Notes of a series at any
time. The trustee will also call a meeting upon request of Citicorp or the
holders of at least 10% in aggregate principal amount of the outstanding Notes
of such series. In any case, a meeting will be called upon notice given in
accordance with "Notices" below. (Indentures ss.1302). Except for any consent
which must be given by the holder of each outstanding Note affected, as
described above, any resolution presented at a meeting or adjourned meeting at
which a quorum is present may be adopted by the affirmative vote of the holders
of a majority in aggregate principal amount of the outstanding Notes of that
series. However, any resolution with respect to any consent, waiver, request,
demand, notice, authorization, direction or other action which may be given by
the holders of not less than a specified
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percentage in aggregate principal amount of outstanding Notes of a series may be
adopted at a meeting or an adjourned meeting at which a quorum is present only
by the affirmative vote of the holders of not less than such specified
percentage in aggregate principal amount of the outstanding Notes of that
series. Any resolution passed or decision taken at any meeting of holders of
Notes of any series duly held in accordance with the applicable Indenture will
be binding on all holders of Notes of that series and the related coupons. The
quorum at any meeting called to adopt a resolution, and at any adjourned
meeting, will be persons holding or representing a majority in aggregate
principal amount of the outstanding Notes of a series. However, if any action is
to be taken at such meeting with respect to a consent, waiver, request, demand,
notice, authorization, direction or other action which may be given by the
holders of not less than a specified percentage in aggregate principal amount of
the outstanding Notes of a series, the persons holding or representing such
specified percentage in aggregate principal amount of the outstanding Notes of
such series will constitute a quorum. (Indentures ss.1304).
Consolidation, Merger and Sale of Assets
Citicorp may, without the consent of the holders of any of the Outstanding
Notes of a series, consolidate with, merge into or transfer its assets
substantially as an entirety to any corporation organized under the laws of any
domestic or foreign jurisdiction, provided certain conditions are met. Those
conditions are the following:
o the successor corporation must assume Citicorp's obligations on the
Notes of each series and under the applicable Indenture;
o after giving effect to the merger or transfer, with respect to the
Senior Notes, no Event of Default and no event which, after notice
or lapse of time, or both, would become an Event of Default has
occurred and is continuing;
o after giving effect to the merger or transfer, with respect to the
Subordinated Notes, no Default, and no event which, after notice or
lapse of time, or both, would become a Default, has occurred and is
continuing; and
o certain other conditions are met. (Indentures ss.801, 802).
Notices
Notices to holders of Notes will be given by mail to the addresses of such
holders as they appear in the security register. (Indentures ss.106).
Title
Citicorp and the related trustee, and any agent of Citicorp or such
trustee, may treat the registered owner of any Note as the absolute owner of
such Note (whether or not such Note or coupon is overdue and notwithstanding any
notice to the contrary) for the purpose of making payment and for all other
purposes. (Indentures ss.308).
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Replacement of Notes and Coupons
Citicorp will replace at the expense of the holder any mutilated Note, or
a Note with a mutilated coupon, upon surrender of such Note to the related
trustee. At the expense of the holder, Citicorp will replace Notes or coupons
that become destroyed, lost or stolen upon delivery to such trustee of evidence
of the destruction, loss or theft of such Notes or coupons satisfactory to
Citicorp and such trustee. In the case of any coupon which becomes destroyed,
lost or stolen, Citicorp will replace such coupon by issuance of a new Note in
exchange for the Note to which such coupon appertains. In the case of a
destroyed, lost or stolen Note or coupon, Citicorp and the applicable trustee
may require an indemnity satisfactory to such trustee and Citicorp at the
expense of the holder of such Note or coupon before a replacement Note will be
issued. (Indentures ss.306).
Defeasance and Covenant Defeasance
Unless otherwise specified in the applicable Prospectus Supplement for a
series of Notes, Citicorp may be released (i) from any and all obligations with
respect to such Notes (subject to the terms of the applicable Indenture) and/or
(ii) from its obligations described above under "Limitations on Liens on Stock
of Citibank, N.A." Such release will occur, in either case, upon the deposit
with the related trustee (or other qualifying trustee), in trust for such
purpose, of money and/or U.S. government obligations which, through the payment
of principal and interest in accordance with their terms, will provide money in
an amount sufficient, without reinvestment, to pay the principal of and any
premium or interest on such Notes to Maturity or redemption, as the case may be,
and any mandatory sinking fund or analogous payments on such Notes. In this
Prospectus, Citicorp's release from obligations as described in clause (i) above
is referred to as "defeasance", and as described in clause (ii) above is
referred to as "covenant defeasance."
As a condition to defeasance or covenant defeasance, Citicorp must deliver
to the related trustee an opinion of counsel to the effect that the holders of
such Notes will not recognize income, gain or loss for United States federal
income tax purposes as a result of such defeasance or covenant defeasance and
will be subject to United States federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
or covenant defeasance had not occurred. Such opinion, in the case of defeasance
under clause (i) above, must refer to and be based upon a published ruling of
the Internal Revenue Service or changes in applicable United States federal
income tax law occurring after the date of the applicable Indenture. (Indentures
Article Fourteen).
Defeasance by Citicorp with respect to the Notes of a series is permitted
notwithstanding Citicorp's prior covenant defeasance with respect to such
series. Following a defeasance, payment of such Notes may not be accelerated
because of an Event of Default or a Default. (Indentures ss.1402). Following a
covenant defeasance, payment of Senior Notes, or the Subordinated Notes issued
prior to the execution of the first supplemental indenture described below in
"Certain Amendments to the Subordinated Indenture," may not be accelerated by
reference to the covenant noted under clause (ii) above. (Senior Indenture
ss.1403, original Subordinated Indenture (prior to execution of first
supplemental indenture) ss.1403). However, if such an acceleration were to
occur, the realizable value at the acceleration date of the money and U.S.
government obligations in the
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defeasance trust could be less than the principal and interest then due on such
Notes, in that the required deposit in the defeasance trust is based upon
scheduled cash flows rather than market value, which will vary depending upon
interest rates and other factors.
Subordination
The Subordinated Notes will be subordinate and junior in right of payment,
to the extent set forth in the Subordinated Indenture, to all Senior
Indebtedness of Citicorp. In the event that Citicorp defaults in the payment of
any principal of (or premium, if any) or interest on any Senior Indebtedness
when the same becomes due and payable, whether at maturity or at a date fixed
for prepayment or by declaration or otherwise, then, unless and until such
default has been cured or waived or ceases to exist, no direct or indirect
payment (in cash, property, securities, by set-off or otherwise) will be made or
agreed to be made on account of the principal of or interest on the indebtedness
evidenced by the Subordinated Notes, or in respect of any redemption,
retirement, purchase or other acquisition of any of the Subordinated Notes.
In the event of any of the following, all Senior Indebtedness (including
any interest on Senior Indebtedness accruing after the commencement of any such
proceedings) will first be paid in full before any payment or distribution under
the Subordinated Notes, whether in cash, securities or other property, will be
made to any Subordinated Note holders:
o any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar
proceeding relating to Citicorp, its creditors or its property;
o any proceeding for the liquidation, dissolution or other winding-up
of Citicorp, voluntary or involuntary, whether or not involving
insolvency or bankruptcy proceedings;
o any assignment by Citicorp for the benefit of creditors; or
o any other marshaling of the assets of Citicorp.
In such event, any payment or distribution under the Subordinated Notes, whether
in cash, securities or other property (other than securities of Citicorp or any
other corporation provided for by a plan of reorganization or readjustment the
payment of which is subordinate at least to the extent provided in the
subordination provisions with respect to the Subordinated Notes to the payment
of all Senior Indebtedness at the time outstanding, and to any securities issued
under any such plan of reorganization or readjustment), which would otherwise
(but for those subordination provisions) be payable or deliverable in respect of
the Subordinated Notes, will be paid or delivered directly to the holders of
Senior Indebtedness in accordance with the priorities then existing among such
holders until all Senior Indebtedness (including any interest on Senior
Indebtedness accruing after the commencement of any such proceedings) has been
paid in full. If any payment or distribution under the Subordinated Notes, of
any character whether in cash, securities or other property (other than
securities of Citicorp or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the
Subordinated Notes, to the payment of all Senior Indebtedness at the
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time outstanding and to any securities issued under any such plan of
reorganization or readjustment), is received by any holder of any Subordinated
Notes in contravention of any of the terms of the Subordinated Indenture and
before all the Senior Indebtedness has been paid in full, such payment or
distribution or security will be received in trust for the benefit of, and paid
over or delivered and transferred to, the holders of the Senior Indebtedness at
the time outstanding in accordance with the priorities then existing among such
holders for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all such Senior Indebtedness in full.
(Subordinated Indenture ss.1501).
"Senior Indebtedness" means any obligation of Citicorp to its creditors,
whether outstanding on the date of the Subordinated Indenture or subsequently
incurred, other than:
o any securities issued under the Subordinated Indenture (including
Subordinated Notes);
o all other unsecured and subordinated indebtedness of Citicorp, and
all other unsecured and subordinated guarantees by Citicorp of
indebtedness of other persons;
o all obligations incurred or assumed by Citicorp in the ordinary
course of business in connection with the obtaining of materials or
services, and all obligations of Citicorp in respect of any
guarantees of such obligations of subsidiaries of Citicorp (provided
that obligations described in this clause do not include traveler's
checks or other unsubordinated financial instruments); and
o any other obligations as to which, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it
is provided that such obligation is not Senior Indebtedness.
(Subordinated Indenture ss.101).
Neither Indenture limits the issuance of additional Senior Indebtedness.
Because Citicorp is a holding company, its rights and the rights of its
creditors, including the holders of the Notes, to participate in the assets of
any subsidiary upon the latter's liquidation or recapitalization will be subject
to the prior claims of the subsidiary's creditors, except to the extent that
Citicorp may itself be a creditor with recognized claims against the subsidiary.
Certain Amendments to the Subordinated Indenture
As of November 27, 1992, the Subordinated Indenture was amended by a first
supplemental indenture. The first supplemental indenture was entered into in
response to an interpretation of the staff of the Board of Governors of the
Federal Reserve System concerning the capital treatment of subordinated debt. It
amended the Subordinated Indenture by removing a restrictive covenant relating
to liens on the stock of Citibank, N.A. and by narrowing the definition of
"Event of Default" to provide that the appointment of a receiver or trustee (or
similar official) for Citicorp or substantially all of its property (rather than
a substantial part of its property) is an Event of Default. These amendments do
not apply to any series of Subordinated Notes issued prior to the execution of
the first supplemental indenture. Therefore, holders of Subordinated Notes
issued prior to the
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execution of the first supplemental indenture could be entitled to demand
immediate payment of their securities upon the occurrence of certain events of
bankruptcy or insolvency which would not entitle the holders of Subordinated
Notes offered by this Prospectus or issued since the execution of the first
supplemental indenture to demand such payment.
Governing Law
Each Indenture, the Notes and the coupons will be governed by, and
construed in accordance with, the laws of the State of New York. (Indentures
ss.113).
Concerning the Trustees
United States Trust Company of New York, the trustee under the Senior
Indenture, has its principal corporate trust office at 114 West 47th Street, New
York, New York 10036 and is also trustee under other Citicorp indentures under
which unsecured debt securities are currently outstanding.
The Chase Manhattan Bank (formerly known as Chemical Bank), the trustee
under the Subordinated Indenture, has its principal corporate trust office at
450 West 33rd Street, New York, New York 10001, and is also trustee under other
indentures under which subordinated unsecured debt securities issued or
guaranteed by Citicorp are currently outstanding.
Citicorp or its affiliates maintain certain accounts and other banking
relationships with the trustees and their respective affiliates.
FOREIGN CURRENCY RISKS
General
Citicorp may offer securities denominated in any foreign currency or
currency unit. Citicorp will provide the specific terms of any security
denominated in a foreign currency at the time of its offering in a supplement to
this Prospectus.
Citicorp does not advise persons who are not residents of the United
States and who are prospective purchasers of securities denominated in a foreign
currency regarding any matters that may affect the purchase or holding of such
securities or the receipt of payments of principal of and any premium and
interest on the same. Such persons should consult their own legal advisors with
regard to such matters.
An investment in securities denominated in a foreign currency entails
significant risks and is not an appropriate investment for an investor who is
not experienced in foreign currency transactions. If you are considering
investing in securities denominated in a foreign currency, you should consult
your own financial and legal advisors as to the risks entailed in such an
investment.
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Exchange Rates and Exchange Controls
To invest in securities denominated in a foreign currency entails
significant risks that are not associated with a similar investment in a
security denominated in U.S. dollars. Such risks include the possibility of the
rate of exchange between the U.S. dollar and the relevant foreign currency
changing significantly and the possibility of either the United States or
foreign governments imposing or modifying foreign exchange controls. Such risks
generally depend on economic and political events over which Citicorp has no
control. In recent years, the rates of exchange between the U.S. dollar and
certain foreign currencies have been highly volatile, and they may be highly
volatile in the future. Fluctuations in any particular exchange rate that have
occurred in the past, however, do not necessarily indicate how fluctuations in
the rate may occur during the term of any securities denominated in a foreign
currency. Changes in the exchange rate of the relevant foreign currency against
the U.S. dollar would generally result in changes in the U.S. dollar-equivalent
market value of the security.
PLAN OF DISTRIBUTION
Citicorp may offer and sell the securities directly to one or more
purchasers, through agents designated from time to time or through underwriting
syndicates led by one or more managing underwriters or through one or more
underwriters acting alone. Such underwriters or agents may be affiliates of
Citicorp, and offers and sales of securities may include secondary market
transactions by affiliates of Citicorp. Such affiliates may act as principal or
agent in such transactions. Such transactions will be made at prices related to
prevailing market prices at the time of sale.
Citicorp will set forth in the applicable Prospectus Supplement the terms
of the offering to which such Prospectus Supplement relates, including the name
or names of any underwriters or agents, the public offering or purchase price,
the net proceeds to Citicorp from such sale, any underwriting discounts and
other items constituting underwriters' compensation, any discounts and
commissions allowed or paid to dealers, any commissions allowed or paid to
agents, and the securities exchanges, if any, on which the securities will be
listed. Dealer trading may take place in certain of the securities, including
securities not listed on any securities exchange. Direct sales may be made on a
national securities exchange or otherwise. If Citicorp, directly or through
agents, solicits offers to purchase Notes, Citicorp reserves the sole right to
accept and, together with its agents, to reject in whole or in part any proposed
purchase of Notes.
Citicorp may change from time to time any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers. If so
indicated in the applicable Prospectus Supplement, Citicorp will authorize
underwriters or agents to solicit offers by certain institutions to purchase
securities from Citicorp pursuant to delayed delivery contracts providing for
payment and delivery at a future date.
Any underwriter or agent participating in the distribution of securities,
including securities offered by this Prospectus, may be deemed to be an
underwriter of those securities under the Securities Act of 1933, as amended,
and any discounts or commissions received by them and any profit realized by
them on the sale or resale of the securities may be deemed to be underwriting
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discounts and commissions. Citicorp may agree to indemnify underwriters, agents
and their controlling persons against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended, in connection with
their participation in the distribution of Citicorp securities.
If an affiliate or subsidiary of Citicorp participates in the offer and
sale of the securities, such participation will comply with the requirements of
Rule 2720 of the Conduct Rules of the National Association of Securities
Dealers, Inc. relating to underwriting securities of an affiliate. No Citicorp
affiliate or subsidiary which is a member of the National Association of
Securities Dealers, Inc. and which is participating in offers and sales will
execute a transaction in the securities in a discretionary account without the
prior written specific approval of the member's customer.
Underwriters and agents participating in the distribution of Citicorp
securities, and their controlling persons, may engage in transactions with and
perform services for Citicorp in the ordinary course of business.
VALIDITY OF SECURITIES
Stephen E. Dietz, as an Associate General Counsel of Citibank, N.A., will
pass upon the validity of the securities for Citicorp. Mr. Dietz owns or has the
right to acquire a number of shares of Common Stock of Citicorp equal to less
than 0.01% of the outstanding Common Stock of Citicorp.
EXPERTS
Citicorp has incorporated by reference the consolidated financial
statements of Citicorp and subsidiaries included in Citicorp's Annual Report and
Form 10-K for 1996 in reliance upon the report set forth in such Annual Report
and Form 10-K of KPMG Peat Marwick LLP, independent certified public
accountants, and upon the authority of said firm as experts in accounting and
auditing. The report of KPMG Peat Marwick LLP covering the December 31, 1996
financial statements refers to the fact that in 1994 Citicorp adopted Statement
of Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits," and Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities."
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GLOSSARY
Page
Default.............................................................. 9
Event of Default..................................................... 8, 9
Indenture............................................................ 4
Notes................................................................ 4
Prospectus Supplement................................................ 5
SEC.................................................................. 2
Senior Indebtedness.................................................. 14
Senior Indenture..................................................... 4
Senior Notes......................................................... 4
Subordinated Indenture............................................... 4
Subordinated Notes................................................... 4
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Alternate Pages for
Convertible Debt/Warrants
Prospectus
PROSPECTUS
- ----------
CITICORP
Senior Notes
Subordinated Notes
Warrants
This Prospectus may be used in connection with the offering of Citicorp's
unsecured debt securities, which may be either senior (the "Senior Notes") or
subordinated (the "Subordinated Notes" and together with the Senior Notes, the
"Notes"), and warrants (the "Warrants") entitling the holder to purchase from
Citicorp or sell to Citicorp, or to receive from Citicorp the cash value of the
right to purchase or sell, Notes, shares of Citicorp's preferred stock
("Preferred Stock"), depositary shares ("Depositary Shares") or common stock
("Common Stock"), other securities, securities indices or currencies or
composite currencies. The Notes and Warrants (collectively, the "Securities")
may be offered, separately or together, in separate series in amounts, at prices
and on terms determined at the time of sale and set forth in one or more
supplements to this Prospectus (together, the "Prospectus Supplement"). To the
extent described in the Prospectus Supplement, the Notes may be convertible or
exchangeable, at the option of the holder or Citicorp, into Common Stock or
other securities of Citicorp or another issuer.
The Senior Notes will rank equally with all other unsecured and
unsubordinated indebtedness of Citicorp. The Subordinated Notes will be
subordinate to all existing and future Senior Indebtedness (as defined herein).
See "Description of Notes."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS BUT ARE
UNSECURED DEBT OBLIGATIONS OR WARRANTS OF CITICORP AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
The date of this Prospectus is January 28, 1998
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The specific terms of each series of Securities offered pursuant to this
Prospectus will be set forth in the applicable Prospectus Supplement, which in
each case will identify any underwriters or agents for the Securities being
offered thereby and their compensation, and the public offering or purchase
price.
The Prospectus Supplement will also include the following: (a) in the case
of any series of Notes, the aggregate principal amount offered, the rate and
time of payment of interest, if any, the authorized denominations, the currency
or composite currency, if not the U.S. dollar, in which payments are to be made,
the maturity, priority, premium, if any, any terms for redemption or conversion
at the option of Citicorp or the holder, and any mandatory or optional sinking
fund or analogous provisions and (b) in the case of Warrants, the number
offered, the exercise price, the duration, the currency or composite currency,
index or security relating to each Warrant, and the procedures and conditions
for the exercise of the Warrants.
The Prospectus Supplement will also contain information, where applicable,
concerning certain United States federal income tax considerations relating to,
and as to any listing on a securities exchange of, the Securities covered by
such Prospectus Supplement.
The Securities may be offered by Citicorp directly to purchasers, through
agents designated from time to time, through underwriting syndicates led by one
or more managing underwriters or through one or more underwriters acting alone.
If Citicorp, directly or through agents, solicits offers to purchase the
Securities, Citicorp reserves the sole right to accept and, together with its
agents, to reject in whole or in part any proposed purchase of Securities.
Affiliates of Citicorp may from time to time act as agents or underwriters in
connection with the sale of the Securities to the extent permitted by applicable
law.
If any agent or underwriter is involved in the sale of the Securities
offered hereby, the name of such agent or underwriter and any applicable
commissions or discounts will be set forth in, or will be calculable from, the
applicable Prospectus Supplement, and the net proceeds to Citicorp from such
sale will be the purchase price of such offered Securities less such commissions
or discounts and other attributable issuance and distribution expenses. See
"Plan of Distribution" for possible indemnification arrangements for agents,
underwriters and their controlling persons.
This Prospectus and related Prospectus Supplement may be used by direct or
indirect subsidiaries of Citicorp in connection with offers and sales related to
secondary market transactions in the Securities. Such subsidiaries may act as
principal or agent in such transactions. Such sales will be made at prices
related to prevailing market prices at the time of sale.
This Prospectus may not be used to consummate sales of Securities unless a
Prospectus Supplement is also delivered. The delivery of this Prospectus
together with a Prospectus Supplement relating to particular Securities shall
not constitute an offer in any jurisdiction of any of the other Securities
covered by this Prospectus.
FOR NORTH CAROLINA RESIDENTS: THE COMMISSIONER OF INSURANCE OF THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS
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OFFERING NOR HAS THE COMMISSIONER PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS.
DESCRIPTION OF WARRANTS
Citicorp may issue, together with any other series of Securities offered
or separately, Warrants entitling the holder to purchase from or sell to
Citicorp, or to receive from Citicorp the cash value of the right to purchase or
sell, Notes, shares of Preferred Stock, Depositary Shares or Common Stock, other
securities, securities indices, currencies or composite currencies. The Warrants
are to be issued under Warrant Agreements (each a "Warrant Agreement") to be
entered into between Citicorp and Citibank or another warrant agent (the
"Warrant Agent"), all as set forth in the applicable Prospectus Supplement
relating to the particular issue of Warrants. Copies of the forms of Warrant
Agreement, including the forms of Warrant Certificates representing the Warrants
(the "Warrant Certificates"), are filed as exhibits to the Registration
Statement of which this Prospectus forms a part.
In the case of each series of Warrants, the applicable Prospectus
Supplement will describe the terms of the Warrants being offered thereby,
including the following, if applicable: (i) the offering price; (ii) the
currencies in which such Warrants are being offered; (iii) the number of
Warrants offered; (iv) the securities, securities indices, currencies or
composite currencies underlying the Warrants, (v) the exercise price, the
procedures for exercise of the Warrants and the circumstances, if any, that will
cause the Warrants to be deemed to be automatically exercised; (vi) the date on
which the right to exercise the Warrants shall commence and the date on which
such right shall expire; (vii) U.S. federal income tax consequences; and (viii)
other terms of the Warrants.
Warrants may be exercised at the appropriate office of the Warrant Agent
or any other office indicated in the applicable Prospectus Supplement. Prior to
the exercise of Warrants entitling the holder to purchase any securities,
holders of such Warrants will not have any of the rights of holders of the
securities purchasable upon such exercise and will not be entitled to payments
made to holders of such securities.
The Warrant Agreements may be amended or supplemented without the consent
of the holders of the Warrants issued thereunder to effect changes that are not
inconsistent with the provisions of the Warrants and that do not adversely
affect the interests of the holders of the Warrants.
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PROSPECTUS
- ----------
Citicorp
Preferred Stock and Depositary Shares
Common Stock
This Prospectus may be used in connection with the offering of shares of
Citicorp's preferred stock (the"Preferred Stock"), which may be represented by
depositary shares (the "Depositary Shares"), and shares of its common stock, par
value $1.00 per share (the "Common Stock"). The Preferred Stock, Depositary
Shares and Common Stock (collectively, the "Securities") may be offered,
separately or together, in separate series in amounts, at prices and on terms
determined at the time of sale and set forth in one or more supplements to this
Prospectus (together, the "Prospectus Supplement"). Pursuant to the terms of the
Registration Statement of which this Prospectus forms a part, Citicorp's senior
notes or subordinated notes (together, "Notes") and other securities may also be
offered under the Registration Statement.
The specific terms of each offering of Securities made pursuant to this
Prospectus will be set forth in the applicable Prospectus Supplement, which in
each case will identify the selling security holders (if not Citicorp), any
underwriters or agents for the Securities being offered thereby and their
compensation, and the public offering or purchase price.
The Prospectus Supplement will also include the following: (a) in the case
of any series of Preferred Stock, the specific designation, the aggregate number
of shares offered, the dividend rate or method of calculation, the dividend
period and dividend payment dates, whether such dividends will be cumulative or
noncumulative, the liquidation preference, the currency or composite currency,
if not the U.S. dollar, in which dividends and liquidation preference will be
denominated, voting rights, any terms for redemption at the option of the holder
or Citicorp and any applicable conversion provisions, in the event that such
series of Preferred Stock is convertible at the option of the holder thereof or
of Citicorp, into shares of Common Stock or into other securities of Citicorp or
another issuer and (b) in the case of Common Stock, the aggregate number of
shares offered.
The Prospectus Supplement will also contain information, where applicable,
concerning certain United States federal income tax considerations relating to,
and as to any listing on a securities exchange of, the Securities covered by
such Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE SECURITIES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OBLIGATIONS OF ANY BANK OR
NON-BANK SUBSIDIARY OF CITICORP AND ARE NOT INSURED BY
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THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
The date of this Prospectus is January 28, 1998
2
<PAGE>
The Securities may be offered by Citicorp or by other selling security
holders directly to purchasers, through agents designated from time to time,
through underwriting syndicates led by one or more managing underwriters or
through one or more underwriters acting alone. If Citicorp, directly or through
agents, solicits offers to purchase the Securities, Citicorp reserves the sole
right to accept and, together with its agents, to reject in whole or in part any
proposed purchase of Securities. Affiliates of Citicorp may from time to time
act as agents or underwriters in connection with the sale of the Securities to
the extent permitted by applicable law.
If any agent or underwriter is involved in the sale of the Securities
offered hereby, any applicable commissions or discounts will be set forth in, or
will be calculable from, the applicable Prospectus Supplement, and the net
proceeds to Citicorp or the selling security holders from such sale will be the
purchase price of the Securities less such commissions or discounts and other
attributable issuance and distribution expenses. See "Plan of Distribution" for
possible indemnification arrangements for agents, underwriters and their
controlling persons.
This Prospectus and related Prospectus Supplement may be used by direct or
indirect subsidiaries of Citicorp in connection with offers and sales related to
secondary market transactions in the Securities. Such subsidiaries may act as
principal or agent in such transactions. Such sales will be made at prices
related to prevailing market prices at the time of sale.
This Prospectus may not be used to consummate sales of Securities unless a
Prospectus Supplement is also delivered. The delivery of this Prospectus
together with a Prospectus Supplement relating to particular Securities shall
not constitute an offer in any jurisdiction of any of the other Securities
covered by this Prospectus.
FOR NORTH CAROLINA RESIDENTS: THE COMMISSIONER OF INSURANCE OF
THE STATE OF NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS
OFFERING NOR HAS THE COMMISSIONER PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS.
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<PAGE>
AVAILABLE INFORMATION
Citicorp is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Reports, proxy statements and other information concerning Citicorp
can be inspected and copied at prescribed rates at the Commission's Public
Reference Room, Judiciary Plaza, 450 Fifth Street, Northwest, Washington, D.C.
20549, as well as the following Regional Offices of the Commission: 7 World
Trade Center, New York, New York 10048; and Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material may be obtained by mail
from the Commission's Public Reference Section at prescribed rates. If
available, such reports and other information may also be accessed through the
Commission's electronic data gathering, analysis and retrieval system ("EDGAR")
via electronic means, including the Commission's web site on the Internet
(http://www.sec.gov). Such reports, proxy statements and other information may
also be inspected at the offices of the New York Stock Exchange, the American
Stock Exchange, the Chicago Stock Exchange and the Pacific Stock Exchange.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Citicorp are
incorporated as of their respective filing dates in this Prospectus by
reference:
(1) Annual Report and Form 10-K for the fiscal year ended December 31, 1996,
filed pursuant to Section 13 of the Exchange Act;
(2) Financial Reviews and Forms 10-Q for the quarters ended March 31, 1997, June
30, 1997, and September 30, 1997 filed pursuant to Section 13 of the Exchange
Act;
(3) Current Reports on Form 8-K dated January 21, 1997, April 15, 1997, July 15,
1997, October 21, 1997 and January 20, 1998, filed pursuant to Section 13 of the
Exchange Act; and
(4) the description of the Common Stock set forth in the Registration Statement
on Form 10 (File No. 1-5738), filed pursuant to Section 12 of the Exchange Act.
All reports subsequently filed by Citicorp pursuant to Sections 13(a) and
(c) of the Exchange Act and any definitive proxy or information statements filed
pursuant to Section 14 of the Exchange Act in connection with any subsequent
stockholders' meeting and any reports filed pursuant to Section 15(d) of the
Exchange Act prior to the termination of the offering of the Securities offered
hereby shall be incorporated by reference into this Prospectus and be a part
hereof. Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is incorporated by reference herein or in the accompanying
Prospectus Supplement modifies or supersedes such statement. Any such statement
so modified or superseded shall not, except as so modified or superseded,
constitute a part of this Prospectus.
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Citicorp will provide without charge to each person to whom this
Prospectus is delivered, on the request of any such person, a copy of any of the
foregoing documents incorporated herein by reference (other than exhibits to
such documents). Written or telephone requests should be directed to Citicorp,
399 Park Avenue, New York, New York 10043, Attention: Investor Relations
Department, (212) 559-2718.
CITICORP
Citicorp, whose principal subsidiary is Citibank, N.A. ("Citibank"), is a
holding company incorporated under the laws of the State of Delaware on December
4, 1967. The principal office of Citicorp is located at 399 Park Avenue, New
York, New York 10043; its telephone number is (212) 559-1000. Through its
subsidiaries and affiliates, including Citibank, Citicorp is a global financial
services organization serving the financial needs of individuals, businesses,
governments and financial institutions in the United States and throughout the
world.
Holding Company
Citicorp is a legal entity separate and distinct from Citibank and its
other subsidiaries and affiliates. There are various legal limitations on the
extent to which Citicorp's bank subsidiaries may extend credit, pay dividends or
otherwise supply funds to Citicorp. The approval of the Office of the
Comptroller of the Currency is required if total dividends declared by a
national bank in any calendar year exceed net profits (as defined) for that year
combined with its retained net profits for the preceding two years. In addition,
dividends for such a bank may not be paid in excess of the bank's undivided
profits. State-chartered bank subsidiaries are subject to dividend limitations
imposed by applicable state law. In determining whether and to what extent to
pay dividends, each bank subsidiary must also consider the effect of dividend
payments on applicable risk-based capital and leverage ratio requirements as
well as policy statements of the federal regulatory agencies that indicate that
banking organizations should generally pay dividends out of current operating
earnings.
Citicorp also derives dividends from its non-bank subsidiaries. These
subsidiaries are not subject to regulatory restrictions on their payment of
dividends to Citicorp, except that the approval of the Office of Thrift
Supervision may be required if total dividends declared by a savings association
in any calendar year exceed amounts specified in that agency's regulations. In
addition, there are numerous governmental requirements and regulations that
affect the activities of Citicorp and its bank and non-bank subsidiaries.
Under longstanding policy of The Board of Governors of the Federal Reserve
System, a bank holding company is expected to act as a source of financial
strength for its subsidiary banks and to commit resources to support such banks.
As a result of that policy, Citicorp may be required to commit resources to its
subsidiary banks in circumstances where it might not otherwise do so.
Because Citicorp is a holding company, its rights and the rights of its
creditors and stockholders, including the holders of the Securities, to
participate in the assets of any subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of the subsidiary's
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creditors, except to the extent that Citicorp may itself be a creditor with
recognized claims against the subsidiary.
USE OF PROCEEDS
Citicorp intends to apply the net proceeds from the sale of the Securities
to its general funds to be used by its management for corporate purposes,
principally to fund investments in, or extensions of credit to, banking and
non-banking subsidiaries and to maintain adequate liquid balances. Except as
otherwise described in a Prospectus Supplement, specific allocations of the
proceeds to such purposes will not have been made at the date of the applicable
Prospectus Supplement, although the management of Citicorp will have determined
that funds should be raised at that time. The precise amount and timing of such
investments in and extensions of credit to the subsidiaries will depend upon
their funding requirements and the availability of other funds to Citicorp and
its subsidiaries. Unless otherwise indicated in the applicable Prospectus
Supplement, Citicorp will not receive any proceeds of the sale of Securities by
other selling security holders.
RATIOS OF INCOME TO FIXED CHARGES INCLUDING PREFERRED STOCK
DIVIDENDS
For the fiscal years ended December 31, 1997, 1996, 1995, 1994 and 1993,
Citicorp's consolidated ratios of income to fixed charges including preferred
stock dividends, computed as set forth below, were as follows:
Year Ended December 31,
-------------------------------------
1997 1996 1995 1994 1993
Income to Fixed Charges:
Excluding Interest on Deposits 2.43 2.51 2.05 1.63 1.35
Including Interest on Deposits 1.41 1.45 1.37 1.26 1.14
For purposes of computing the consolidated ratio of income to fixed
charges including preferred stock dividends, income represents net income,
before extraordinary items and cumulative effects of accounting changes, plus
income taxes and fixed charges. Fixed charges including preferred stock
dividends, excluding interest on deposits, represent interest expense (except
interest paid on deposits), preferred stock dividends and the interest factor
included in rents. Fixed charges including preferred stock dividends, including
interest on deposits, represent all interest expense, preferred stock dividends
and the interest factor included in rents.
DESCRIPTION OF PREFERRED STOCK
General
Citicorp is authorized by its Restated Certificate of Incorporation, as
amended, to issue 50,000,000 shares of Preferred Stock, without par value, which
may be issued in one or more series with such voting powers, full or limited,
but not to exceed one vote per share, or without voting
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<PAGE>
powers, and with such designations, preferences and privileges, relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issue thereof adopted by the Board of Directors
and the Stock Committee thereof (the "Stock Committee").
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain terms of any series of Preferred Stock
offered by any Prospectus Supplement will be described in the Prospectus
Supplement relating to such series of Preferred Stock. If so indicated in the
Prospectus Supplement, the terms of any such series may differ from the terms
set forth below.
The Stock Committee is authorized to declare dividends payable on the
Preferred Stock and to establish and designate series and to fix the number of
shares and the relative rights, preferences and limitations of the respective
series of Preferred Stock (other than voting rights), all of which terms and
conditions shall be set forth in the Prospectus Supplement accompanying this
Prospectus relating to the particular series of Preferred Stock offered thereby.
The terms of particular series of Preferred Stock may differ, among other
things, in (1) the number of shares to constitute such series, (2) the dividend
rate (or the method of calculation thereof) on the shares of such series and
whether such dividends will be cumulative or noncumulative, (3) whether or not
the shares of the series will be redeemable or convertible at the option of the
holder or Citicorp and the terms thereof, (4) the amount per share payable on
the shares of the series in case of the liquidation, dissolution or winding up
of Citicorp and (5) the other rights and privileges and any qualifications,
limitations or restrictions of such rights or privileges of such series. Unless
stated otherwise in the applicable Prospectus Supplement, holders of Preferred
Stock will have no right to subscribe for any other securities that may be
issued by Citicorp.
In addition, as described under "Description of Depositary Shares" below,
the shares of Preferred Stock may be offered as depositary shares (the
"Depositary Shares") evidenced by depositary receipts, each representing a
fraction (to be specified in the Prospectus Supplement relating to the
particular series of Preferred Stock) of a share of the particular series of
Preferred Stock issued and deposited with a depositary.
Unless stated otherwise in the applicable Prospectus Supplement, when
issued, each series of Preferred Stock will rank on a parity with all the other
outstanding series of preferred stock issued by Citicorp as to payment of
dividends (except with respect to the cumulation thereof) and as to the
distribution of assets upon the liquidation, dissolution or winding up of
Citicorp. Subject to the terms of the Preferred Stock to be offered, the
remaining shares of undesignated Preferred Stock may be issued by Citicorp in
one or more series, at any time or from time to time, with such rights,
preferences and limitations as the Board of Directors or any duly authorized
committee thereof (including the Stock Committee) shall determine, all without
further action of the holders of the Preferred Stock or any other stockholders.
Citibank will be the transfer agent, dividend disbursing agent and
registrar for the shares of Preferred Stock.
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Under existing interpretations of the Federal Reserve Board and the Office
of Thrift Supervision, if the holders of the Preferred Stock become entitled to
vote for the election of directors because dividends on the Preferred Stock are
in arrears as described under "Voting Rights" below, Preferred Stock may then be
deemed a "class of voting securities" and a holder of 25% or more of the
Preferred Stock (or a holder of 5% or more of the Preferred Stock that otherwise
exercises a "controlling influence" over Citicorp) may then be subject to
regulation as a "bank holding company" in accordance with the Bank Holding
Company Act of 1956, as amended, and a holder of 25% or more of the Preferred
Stock (or a holder of 10% or more of the Preferred Stock that otherwise
possesses certain "control factors" with respect to Citicorp) may then be
subject to regulation as a "savings and loan holding company" in accordance with
the Home Owners' Loan Act of 1933, as amended. In addition, at such time, (i)
any bank holding company or foreign bank with a U.S. presence generally would be
required to obtain the approval of the Federal Reserve Board under the Bank
Holding Company Act of 1956, as amended, to acquire or retain 5% or more of the
Preferred Stock; (ii) any person other than a bank holding company may be
required to obtain the approval of the Federal Reserve Board and the Office of
Thrift Supervision under the Change in Bank Control Act to acquire or retain 10%
or more of the Preferred Stock; and (iii) any savings and loan holding company
generally could not retain in excess of 5% of the Preferred Stock.
The following statements are brief summaries of certain provisions that
will be contained in the Certificate of Designations authorizing the issuance of
a series of Preferred Stock, do not purport to be complete and are qualified in
their entirety by reference to such Certificate of Designations and Citicorp's
Restated Certificate of Incorporation, as amended. Prior to the issuance of a
series of Preferred Stock the resolutions set forth in the Certificate of
Designations will be adopted by the Board of Directors or the Stock Committee
and such Certificate of Designations will then be filed with the Secretary of
State of the State of Delaware.
Dividends
Holders of shares of Preferred Stock will be entitled to receive, as, if
and when declared by the Board of Directors or the Stock Committee out of assets
of Citicorp legally available for payment, cash dividends at the rate set forth
in, or calculated in accordance with the formula set forth in, the Prospectus
Supplement. Dividends on the Preferred Stock may be cumulative ("Cumulative
Preferred Stock") or noncumulative ("Noncumulative Preferred Stock") as provided
in the Prospectus Supplement. Unless otherwise provided in the Prospectus
Supplement, dividends on Cumulative Preferred Stock will be cumulative from the
date of original issue of such series and will be payable quarterly in arrears
on the dates specified in the Prospectus Supplement. If any date so specified as
a dividend payment date is not a business day, dividends (if declared) on the
Preferred Stock (unless otherwise provided in the Prospectus Supplement) will be
paid on the immediately succeeding business day, without interest. A dividend
period with respect to a dividend payment date is the period commencing on the
immediately preceding dividend payment date (or, in the case of the initial
dividend period, the date of issuance of the Preferred Stock) and ending on the
day immediately prior to the next succeeding dividend payment date. If the Board
of Directors or the Stock Committee fails to declare or pay a dividend on any
series of Noncumulative Preferred Stock for any dividend period, Citicorp shall
have no obligation to pay a dividend for such period, whether
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<PAGE>
or not dividends on such series of Noncumulative Preferred Stock are declared
for any future dividend period.
Dividends on the Preferred Stock will be payable in arrears to holders of
record as they appear on the stock register of Citicorp on such record dates,
not more than thirty nor less than fifteen days preceding the payment dates
thereof, as shall be fixed by the Board of Directors or the Stock Committee. No
full dividends will be declared or paid or set apart for payment on the
preferred stock of any series ranking, as to dividends, on a parity with or
junior to any other series of Preferred Stock for any period unless full
dividends have been or are contemporaneously declared and paid or declared and a
sum sufficient for the payment thereof set apart for such payment on such series
of Preferred Stock for (i) all dividend periods terminating on or prior to the
date of payment of such full cumulative dividends (in the case of a series of
Cumulative Preferred Stock) or (ii) the immediately preceding dividend period
(in the case of a series of Noncumulative Preferred Stock).
When dividends are not paid in full upon any series of Preferred Stock
(whether Cumulative Preferred Stock or Noncumulative Preferred Stock), and any
other preferred stock ranking on a parity as to dividends with such series of
Preferred Stock, all dividends declared upon shares of such series of Preferred
Stock and any other preferred stock ranking on a parity as to dividends will be
declared pro rata so that the amount of dividends declared per share on such
series of Preferred Stock and such other preferred stock will in all cases bear
to each other the same ratio that accrued dividends per share (which, in the
case of Noncumulative Preferred Stock, shall not include any cumulation in
respect of unpaid dividends for prior dividend periods) on the shares of such
series of Preferred Stock and such other preferred stock bear to each other.
Except as provided in the preceding sentence, unless full dividends on all
outstanding shares of any such series of Preferred Stock have been declared and
paid or set apart for payment for all past dividend periods, in the case of a
series of Cumulative Preferred Stock, or for the immediately preceding dividend
period, in the case of a series of Noncumulative Preferred Stock, and Citicorp
is not in default with respect to any redemption of shares of Preferred Stock
announced by Citicorp as described under "Redemption" below, no dividends (other
than dividends or distributions paid in shares of, or options, warrants or
rights to subscribe for or purchase shares of, the Common Stock of Citicorp or
another stock of Citicorp ranking junior to the Preferred Stock as to dividends
and upon liquidation) will be declared or paid or set aside for payment or other
distribution declared or made upon the Common Stock of Citicorp or upon any
other stock of Citicorp ranking junior to or on parity with the Preferred Stock
as to dividends or upon liquidation, nor will any Common Stock of Citicorp nor
any other stock of Citicorp ranking junior to or on parity with such Preferred
Stock as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any shares of any such stock) by Citicorp
(except by conversion into or exchange for stock of Citicorp ranking junior to
the Preferred Stock as to dividends and upon liquidation). Unless otherwise
specified in the Prospectus Supplement, the amount of dividends payable for any
period shorter than a full dividend period shall be computed on the basis of
twelve 30-day months, a 360-day year and the actual number of days elapsed in
any period of less than one month.
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Liquidation Preference
Upon any liquidation, dissolution or winding up of Citicorp, whether
voluntary or involuntary, the holders of the Preferred Stock will have
preference and priority over the Common Stock, or any other class of stock of
Citicorp ranking, on liquidation, dissolution or winding up, junior to the
Preferred Stock, for payments out of or distribution of the assets of Citicorp
or proceeds thereof, whether from capital or surplus, of the amount per share
set forth in the Prospectus Supplement plus all dividends (whether or not earned
or declared), accrued and unpaid thereon to the date of final distribution to
such holders (but in the case of Noncumulative Preferred Stock, without
cumulation of unpaid dividends for prior dividend periods), and after such
payment the holders of Preferred Stock will be entitled to no other payments.
If, in the case of any such liquidation, dissolution or winding up of Citicorp,
the assets of Citicorp or proceeds thereof should be insufficient to make the
full liquidation payment in the amount per share set forth in the Prospectus
Supplement, plus all accrued and unpaid dividends on the Preferred Stock (but in
the case of Noncumulative Preferred Stock without cumulation of unpaid dividends
for prior dividend periods) and liquidating payments on any other preferred
stock ranking, as to liquidation, dissolution or winding up, on a parity with
the Preferred Stock, then such assets or proceeds thereof will be distributed
among the holders of the Preferred Stock and any such other preferred stock
ratably in accordance with the respective amounts which would be payable on such
shares of Preferred Stock and any such other preferred stock if all amounts
thereon were paid in full. A consolidation or merger of Citicorp with one or
more corporations will not be deemed to be a liquidation, dissolution or winding
up, voluntary or involuntary, of Citicorp.
Redemption
Citicorp may, at its option, with prior Federal Reserve Board approval to
the extent then required by applicable law, at any time or from time to time on
not less than 30 and not more than 60 days' notice, redeem any series of
Preferred Stock in whole or part at the redemption prices and on the dates set
forth in the Prospectus Supplement for the related series of Preferred Stock.
If less than all outstanding shares of a series of Preferred Stock are to
be redeemed, the selection of the shares to be redeemed will be decided by lot
or pro rata as may be determined by the Board of Directors or the Stock
Committee, or by any other method which may be determined by the Board of
Directors or the Stock Committee to be equitable. From and after the redemption
date (unless default shall be made by Citicorp in providing money for the
payment of the redemption price), dividends will cease to accrue on the shares
of Preferred Stock called for redemption, such shares will no longer be deemed
to be outstanding and all rights of the holders thereof (except the right to
receive the redemption price) will cease.
In addition, Citicorp, at its option, may, with prior Federal Reserve
Board approval to the extent then required by applicable law, redeem all, but
not less than all, of the outstanding shares of the Preferred Stock, out of
funds legally available therefor, if the holders of such shares would be
entitled to vote upon or consent to a merger or consolidation of Citicorp under
the circumstances described under "Voting Rights" below and all of the following
conditions have been satisfied: (i) Citicorp shall have requested the vote or
consent of the holders of such shares to the consummation
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of such merger or consolidation, stating in such request that failing the
requisite favorable vote or consent Citicorp will have the option to redeem such
shares, (ii) Citicorp shall have not received the favorable vote or consent
requisite to the consummation of the transaction within 60 days after making
such request and (iii) such transaction shall be consummated on the date fixed
for such redemption, which date shall be no more than one year after such
request is made. Any such redemption shall be on notice as aforesaid at a
redemption price per share of the Preferred Stock set forth in the Prospectus
Supplement, plus accrued and unpaid dividends thereon (but in the case of
Noncumulative Preferred Stock without cumulation of unpaid dividends for prior
dividend periods) to the date fixed for redemption.
Voting Rights
Unless otherwise described in the applicable Prospectus Supplement,
holders of the Preferred Stock will have no voting rights except as set forth
below or as otherwise from time to time required by law.
Whenever dividends on the Preferred Stock shall be in arrears for such
number of dividend periods, whether or not consecutive, which shall in the
aggregate contain not less than 540 days, the holders of outstanding shares of
the Preferred Stock (voting separately as a class with holders of shares of any
one or more other series of preferred stock ranking on a parity with the
Preferred Stock either as to dividends or the distribution of assets upon
liquidation, dissolution or winding up and upon which like voting rights have
been conferred and are exercisable) will be entitled to vote for the election of
two additional directors on the terms set forth below. Such voting rights will
continue, in the case of any series of Cumulative Preferred Stock, until all
past dividends accumulated on shares of Cumulative Preferred Stock shall have
been paid in full and, in the case of any series of Noncumulative Preferred
Stock, until all dividends on shares of Noncumulative Preferred Stock shall have
been paid in full for at least one year. Upon payment in full of such dividends
such voting rights shall terminate except as expressly provided by law, subject
to re-vesting in the event of each and every subsequent default in the payment
of dividends as aforesaid. Holders of all series of preferred stock which are
granted such voting rights (which rank on a parity with the Preferred Stock)
will vote as a class, and each holder of shares of the Preferred Stock will have
one vote for each share of stock held and each other series will have such
number of votes, if any, for each share of stock held as may be granted to them.
In the event the holders of shares of the Preferred Stock are entitled to vote
as described in this paragraph, the Board of Directors will automatically be
increased by two directors, and the holders of the Preferred Stock will have the
exclusive right, as outlined above, to elect two directors at the next annual
meeting of stockholders.
Upon termination of the right of the holders of the Preferred Stock to
vote for directors as discussed in the prior paragraph, the term of office of
all directors then in office elected by such holders will terminate immediately.
Whenever the term of office of the directors elected by such holders ends and
the related special voting rights expire, the number of directors will
automatically be decreased to such number as would otherwise prevail.
So long as any shares of Preferred Stock remain outstanding, Citicorp will
not, without the affirmative vote or consent of the holders of at least
two-thirds of the shares of the Preferred Stock
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outstanding at the time (voting as a class with all other series of preferred
stock ranking on a parity with the Preferred Stock either as to dividends or the
distribution of assets upon liquidation, dissolution or winding up and upon
which like voting rights have been conferred and are then exercisable), given in
person or by proxy, either in writing or at a meeting, (i) authorize, create or
issue, or increase the authorized or issued amount, of any class or series of
stock ranking prior to the Preferred Stock with respect to payment of dividends
or the distribution of assets upon liquidation, dissolution or winding up or
(ii) amend, alter or repeal, whether by merger, consolidation or otherwise, the
provisions of Citicorp's Restated Certificate of Incorporation, as amended, or
of the resolutions contained in the Certificate of Designations designating such
Preferred Stock and the powers, preferences and privileges, relative,
participating, optional or other special rights and qualifications, limitations
and restrictions thereof, so as to materially and adversely affect any right,
preference, privilege or voting power of the Preferred Stock or the holders
thereof; provided, however, that any increase in the amount of the authorized
preferred stock or the creation and issuance of other series of preferred stock,
or any increase in the amount of authorized shares of Preferred Stock, in each
case ranking on a parity with or junior to the Preferred Stock with respect to
the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up will not be deemed to materially and adversely affect
such rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if all outstanding shares
of Preferred Stock have been redeemed or sufficient funds have been deposited in
trust to effect such a redemption which is scheduled to be consummated within
three months after the time that such rights would otherwise be exercisable.
Conversion Rights
If so described in the applicable Prospectus Supplement, shares of a
series of Preferred Stock may be convertible at the option of the holder or
Citicorp into Common Stock or other securities of Citicorp or another issuer
("Convertible Preferred Stock"), on the terms and conditions described in the
Prospectus Supplement.
DESCRIPTION OF DEPOSITARY SHARES
General
Citicorp may, at its option, elect to issue receipts ("Depositary
Receipts") for Depositary Shares, each of which will represent a fraction (to be
set forth in the Prospectus Supplement relating to a particular series of
Preferred Stock) of a share of a particular series of Preferred Stock as
described below.
The shares of any series of Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit Agreement")
among Citicorp, Citibank or another depositary selected by Citicorp (the
"Depositary") and the holders from time to time of the Depositary Receipts.
Subject to the terms of the Deposit Agreement, each owner of a Depositary Share
will be entitled, in proportion to the applicable fraction of a share of
Preferred Stock
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represented by the Depositary Share, to all the rights and preferences of the
Preferred Stock represented thereby (including dividend, voting, redemption and
liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement. Depositary Receipts will be distributed to
those persons purchasing the fractional shares of the related series of
Preferred Stock in accordance with the terms of the offering described in the
related Prospectus Supplement. Copies of the forms of Deposit Agreement and
Depositary Receipt are filed as exhibits to the Registration Statement of which
this Prospectus is a part, and the following summary is qualified in its
entirety by reference to such exhibits.
Dividends and Other Distributions
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the related series of Preferred Stock to
the record holders of Depositary Shares relating to such series of Preferred
Stock in proportion to the number of such Depositary Shares owned by such
holders.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
Citicorp, sell such property and distribute the net proceeds from such sale to
such holders.
Withdrawal of Stock
Upon surrender of the Depositary Receipts at the appropriate office of the
Depositary (unless the related Depositary Shares have previously been called for
redemption), the holder of the Depositary Shares evidenced thereby will be
entitled to delivery of the number of whole shares of the related series of
Preferred Stock and any money or other property represented by such Depositary
Shares. Holders of Depositary Shares will be entitled to receive whole shares of
the related series of Preferred Stock on the basis set forth in the related
Prospectus Supplement for such series of Preferred Stock, but holders of such
whole shares of Preferred Stock will not thereafter be entitled to receive
Depositary Shares in exchange therefor. If the Depositary Receipts delivered by
the holder evidence a number of Depositary Shares in excess of the number of
Depositary Shares representing the number of whole shares of the related series
of Preferred Stock to be withdrawn, the Depositary will deliver to such holder
at the same time a new Depositary Receipt evidencing such excess number of
Depositary Shares.
Redemption of Depositary Shares
If Citicorp redeems a series of Preferred Stock represented by Depositary
Shares, the Depositary Shares will be redeemed from the proceeds received by the
Depositary resulting from the redemption, in whole or in part, of such series of
Preferred Stock held by the Depositary. The redemption price per Depositary
Share will be equal to the applicable fraction of the redemption price per share
payable with respect to such series of the Preferred Stock. Whenever Citicorp
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redeems shares of Preferred Stock held by the Depositary, the Depositary will
redeem as of the same redemption date the number of Depositary Shares
representing shares of the related series of Preferred Stock so redeemed. If
less than all the Depositary Shares are to be redeemed, the Depositary Shares to
be redeemed will be selected by lot or pro rata as may be determined by the
Depositary.
Conversion
With respect to a series of Convertible Preferred Stock underlying
Depositary Shares, a holder of Depositary Receipts may participate in the
conversion, and will receive the proceeds of any conversion effected at the
option of Citicorp, in the manner specified in the pertinent Certificate of
Designations for holders of the underlying Preferred Stock. If the Depositary
Shares represented by a Depositary Receipt are to be converted in part only, a
new Depositary Receipt or Depositary Receipts will be issued by the Depositary
for the Depositary Shares not to be converted. If less than all the Depositary
Shares are to be converted at the option of Citicorp, the Depositary Shares to
be converted will be selected by lot or pro rata as may be determined by the
Depositary.
Voting the Preferred Stock
Upon receipt of notice of any meeting at which the holders of the
Preferred Stock are entitled to vote, the Depositary will mail the information
contained in such notice of meeting to the record holders of the Depositary
Shares relating to such Preferred Stock. Each record holder of such Depositary
Shares on the record date (which will be the same date as the record date for
the Preferred Stock) will be entitled to instruct the Depositary as to the
exercise of the voting rights pertaining to the number of shares of the series
of Preferred Stock represented by such holder's Depositary Shares. The
Depositary will endeavor, insofar as practicable, to vote the amount of the
Preferred Stock represented by such Depositary Shares in accordance with such
instructions, and Citicorp will agree to take all action which may be deemed
necessary by the Depositary in order to enable the Depositary to do so. The
Depositary will abstain from voting shares of the Preferred Stock to the extent
that it does not receive specific instructions from the holders of Depositary
Shares representing such Preferred Stock.
Amendment and Termination of the Deposit Agreement
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between Citicorp and the Depositary. However, any amendment which materially and
adversely alters the rights of the holders of Depositary Receipts will not be
effective unless such amendment has been approved by the holders of Depositary
Receipts representing at least a majority (or, in the case of amendments
relating to or affecting rights to receive dividends or distributions or voting
or redemption rights, two-thirds, unless otherwise provided in the related
Prospectus Supplement) of the Depositary Shares then outstanding. The Deposit
Agreement may be terminated by Citicorp or the Depositary only if (i) all
outstanding Depositary Shares have been redeemed, (ii) there has been a final
distribution in respect of the related series of Preferred Stock in connection
with any liquidation, dissolution or winding up of Citicorp and such
distribution has been distributed to the holders of Depositary Receipts or (iii)
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the holders of Depositary Receipts representing not less than two-thirds of the
Depositary Shares outstanding have consented to the termination.
Charges of Depositary
Citicorp will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. Citicorp will
pay charges of the Depositary in connection with the initial deposit of related
series of Preferred Stock and any redemption of such Preferred Stock. Holders of
Depositary Receipts will be liable for transfer and other taxes and governmental
charges and such other charges as are expressly provided in the Deposit
Agreement to be for their accounts. The Depositary may refuse to effect any
transfer of a Depositary Receipt or any withdrawal of shares of a series of
Preferred Stock evidenced thereby until all such taxes and charges with respect
to such Depositary Receipt or such series of Preferred Stock are paid by the
holder thereof.
Resignation and Removal of Depositary
The Depositary may resign at any time by delivering to Citicorp notice of
its election to do so, and Citicorp may at any time remove the Depositary. Any
such resignation or removal of the Depositary will take effect upon the
appointment of a successor Depositary.
Miscellaneous
The Depositary will forward all reports and communications from Citicorp
which are delivered to the Depositary and which Citicorp is required to furnish
to the holders of the Preferred Stock.
Neither the Depositary nor Citicorp will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of Citicorp and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and neither Citicorp nor the Depositary will be
obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or series of Preferred Stock unless satisfactory indemnity is
furnished. Citicorp and the Depositary may rely on written advice of counsel or
accountants, or information provided by persons presenting Preferred Stock for
deposit, holders of Depositary Shares or other persons believed to be competent
and on documents believed to be genuine.
DESCRIPTION OF COMMON STOCK
Citicorp has 800,000,000 authorized shares of Common Stock, par value
$1.00 per share. In addition, Citicorp is authorized to issue 20,000,000 shares
of Class B Common Stock, par value $1.00 per share (the "Class B Common Stock").
Class B Common Stock may be issued in one or more series, at any time or from
time to time, with one vote per share and with such designations, preferences
and relative, participating, optional and other special rights, and
qualifications, limitations or restrictions thereof, as shall be stated and
expressed in the resolutions providing for
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the issuance thereof adopted by the Board of Directors. The following is a brief
summary of certain rights and provisions of the Common Stock and Class B Common
Stock.
Subject to any prior rights of Citicorp's preferred stock and Class B
Common Stock then outstanding, holders of Citicorp's Common Stock are entitled
to receive such dividends as are declared by the Board of Directors out of funds
legally available therefor. The indentures under which certain of Citicorp's
debt securities are outstanding prohibit Citicorp, under certain circumstances,
from paying dividends in shares of stock of Citibank.
Subject to the rights, if any, of the holders of shares of preferred
stock, all voting rights are vested in the holders of shares of Common Stock and
Class B Common Stock, each share being entitled to one vote. A majority of the
shares entitled to vote, present in person or represented by proxy, constitutes
a quorum at a meeting of stockholders of Citicorp. In the event of a class vote,
a majority of the shares of the affected class constitutes a quorum of such
class. Except as otherwise set forth below, corporate actions requiring
stockholder action must be approved by the affirmative vote of a majority of
shares present in person or represented by proxy at a meeting and entitled to
vote on the subject matter. Stockholder action (including the election of
directors) may be taken without a meeting by the written consent of the holders
of not less than a majority (or such greater percentage required by law) of the
stock entitled to vote.
Any amendment to Citicorp's Restated Certificate of Incorporation,
including any increase or decrease in the authorized capital stock or any change
to the rights of an outstanding class or series of capital stock, must be
adopted by the holders of a majority of the outstanding voting shares. In
addition, changes adversely affecting the rights of a particular class or series
of outstanding capital stock must be adopted by the holders of such class or
series of capital stock (generally by a majority of the shares of such class or
series, but in some cases by two-thirds of such shares). Certain extraordinary
corporate actions also must be adopted by the holders of a majority of the
outstanding voting shares.
Subject to any prior rights of the preferred stock and Class B Common
Stock then outstanding, in the event of the liquidation of Citicorp, the holders
of the Common Stock are entitled to receive pro rata any assets distributable to
stockholders in respect of shares held by them. Because Citicorp is a holding
company, its rights and the rights of the record holders of the shares of Common
Stock to participate in the assets of any subsidiary upon the latter's
liquidation or recapitalization will be subject to the prior claims of the
subsidiary's creditors except to the extent that Citicorp may itself be a
creditor with recognized claims against the subsidiary. In addition, there are
various legal limitations on the extent to which Citicorp's U.S.-insured
depositary institutions may extend credit, pay dividends or otherwise supply
funds to Citicorp. See "Citicorp--Holding Company."
Holders of Common Stock do not have the right to subscribe to any
additional securities which may be issued by Citicorp. The Common Stock does not
have any sinking fund, conversion or redemption provisions and is not liable to
further call or assessment by Citicorp. There is no restriction on the
repurchase of shares of Common Stock by Citicorp with funds legally available
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therefor, subject, under certain circumstances, to prior approval by the Federal
Reserve Board. Outstanding shares of Common Stock are validly issued, fully paid
and non-assessable.
The transfer agent and registrar for the Common Stock is Citibank, and the
co-transfer agents and co-registrars for the Common Stock are The First National
Bank of Chicago, First Interstate Bank of California and Montreal Trust Company.
PLAN OF DISTRIBUTION
Securities may be offered and sold by Citicorp or by other selling
security holders in any of three means of distribution: (1) through agents, (2)
through underwriters or dealers or (3) directly to one or more purchasers. Such
underwriters, dealers or agents or other selling security holders may be
affiliates of Citicorp, and offers and sales of Securities may include secondary
market transactions by affiliates of Citicorp. The applicable Prospectus
Supplement will set forth the terms of the offering of the Securities to which
such Prospectus Supplement relates, including the name or names of any
underwriters or agents, the public offering or purchase price of such
Securities, the net proceeds to Citicorp or the security holders from such sale,
any underwriting discounts and other items constituting underwriters'
compensation, any discounts and commissions allowed or paid to dealers, if any,
any commissions allowed or paid to agents, and the securities exchanges, if any,
on which such Securities will be listed. Dealer trading may take place in
certain of the Securities, including Securities not listed on any securities
exchange. Direct sales of Securities may be made on a national securities
exchange or otherwise.
The Securities may be purchased to be reoffered to the public through
underwriting syndicates led by one or more managing underwriters, or through one
or more underwriters acting alone. Any offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time. If so indicated in the applicable Prospectus Supplement, Citicorp will
authorize underwriters or agents to solicit offers to purchase Securities from
Citicorp pursuant to Delayed Delivery Contracts providing for payment and
delivery at a future date.
Any underwriter or agent participating in the distribution of the
Securities may be deemed to be an underwriter, as that term is defined in the
Securities Act of 1933, as amended (the "Securities Act"), of the Securities so
offered and sold and any discounts or commissions received by them and any
profit realized by them on the sale or resale of the Securities may be deemed to
be underwriting discounts and commissions under the Securities Act.
Underwriters, agents and their controlling persons may be entitled, under
agreements entered into with Citicorp, to indemnification by Citicorp against
certain civil liabilities, including liabilities under the Securities Act.
This Prospectus and related Prospectus Supplements may be used by direct
or indirect subsidiaries of Citicorp in connection with offers and sales related
to secondary market transactions. Such subsidiaries may act as principal or
agent in such transactions. Such sales will be made at prices related to
prevailing market prices at the time of sale.
The participation of an affiliate or subsidiary of Citicorp in the offer
and sale of the Securities will comply with the requirements of Rule 2720 of the
Conduct Rules of the National Association
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of Securities Dealers, Inc. (the "NASD") regarding underwriting securities of an
affiliate. No NASD member participating in offers and sales will execute a
transaction in the Securities in a discretionary account without the prior
written specific approval of the member's customer.
Underwriters, agents or their controlling persons may engage in
transactions with and perform services for Citicorp and its subsidiaries in the
ordinary course of business.
VALIDITY OF SECURITIES
The validity of the Securities will be passed upon for Citicorp by Stephen
E. Dietz, as an Associate General Counsel of Citibank. Mr. Dietz owns or has the
right to acquire a number of shares of Common Stock of Citicorp equal to less
than 0.01% of the outstanding Common Stock of Citicorp.
EXPERTS
The consolidated financial statements of Citicorp and subsidiaries
included in Citicorp's Annual Report and Form 10-K for 1996 have been
incorporated herein by reference in reliance upon the report set forth therein
of KPMG Peat Marwick LLP, independent certified public accountants, and upon the
authority of said firm as experts in accounting and auditing. The report of KPMG
Peat Marwick LLP, covering the December 31, 1996 financial statements, refers to
the fact that in 1994 Citicorp adopted Statement of Financial Accounting
Standards ("SFAS") No. 112, "Employers' Accounting for Postemployment Benefits"
and SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities."
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PROSPECTUS
Citicorp
Subordinated Debt Securities
Citicorp Capital III
Citicorp Capital IV
Citicorp Capital V
Citicorp Capital VI
Citicorp Capital VII
Citicorp Capital VIII
Citicorp Capital IX
Citicorp Capital X
Citicorp Capital XI
Citicorp Capital XII
Citicorp Capital XIII
Citicorp Capital XIV
Capital Securities
fully and unconditionally guaranteed by
Citicorp
Citicorp ("Citicorp" or the "Company"), a Delaware corporation, may from
time to time offer its subordinated debentures, notes or other evidence of
indebtedness (the "Subordinated Debt Securities") in one or more series and in
amounts, at prices and on terms to be determined at the time of the offering.
The Subordinated Debt Securities when issued will be unsecured obligations of
the Company. The Company's obligations under the Subordinated Debt Securities
will be subordinate and junior in right of payment to certain other
indebtedness, as may be described in an accompanying Prospectus Supplement (the
"Prospectus Supplement").
Each of the trusts identified above (each, a "Trust"), each a statutory
business trust formed under the laws of the State of Delaware, may offer, from
time to time, preferred securities, representing undivided beneficial interests
in the assets of the respective Trust ("Capital Securities"). The payment of
periodic cash distributions ("distributions") with respect to Capital Securities
of each of the Trusts out of moneys held by each of the Trusts, and payment on
liquidation, redemption or otherwise with respect to such Capital Securities,
will be guaranteed by Citicorp to the extent described herein (each a "Capital
Securities Guarantee"). See "Description of the Capital Securities Guarantees"
below. Citicorp's obligations under the Capital Securities Guarantees are
subordinate and junior in right of payment to all other liabilities of Citicorp
and rank pari passu with the most senior preferred stock, if any, issued from
time to time by Citicorp. Subordinated Debt Securities may be issued and sold
from time to time in one or more series to a Trust, or a trustee of such Trust,
in connection with the investment of the proceeds from the offering of Capital
Securities and Common Securities (as defined herein, together the "Trust
Securities") of such Trust. The Subordinated Debt Securities purchased by a
Trust, after satisfaction of liabilities to creditors of the
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Trust as provided by applicable law, may be subsequently distributed pro rata to
holders of Capital Securities and Common Securities in connection with the
dissolution of such Trust upon the occurrence of certain events as may be
described in an accompanying Prospectus Supplement. Citicorp's obligations under
the Capital Securities Guarantees, taken together with its obligations under the
Subordinated Debt Securities, the Indenture and the Declarations (each as
defined herein), will provide a full and unconditional guarantee on a
subordinated basis by Citicorp of payments due on the Capital Securities. The
Subordinated Debt Securities and the Capital Securities and the related Capital
Securities Guarantees and other related obligations of Citicorp are sometimes
collectively referred to hereafter as the "Offered Securities."
Specific terms of the Subordinated Debt Securities of any series or the
Capital Securities of any Trust, the terms of which will substantially mirror
the terms of the Subordinated Debt Securities held by the Trust, in respect of
which this prospectus (the "Prospectus") is being delivered will be set forth in
a Prospectus Supplement with respect to such securities, which will describe,
without limitation and where applicable, the following: (i) in the case of
Subordinated Debt Securities, the specific designation, aggregate principal
amount, denomination, maturity, premium, if any, any exchange, conversion,
redemption provisions, if any, interest rate (which may be fixed or variable),
if any, the time and method of calculating interest payments, if any, dates on
which premium, if any, and interest, if any, will be payable, the right of
Citicorp, if any, to defer payment of interest on the Subordinated Debt
Securities and the maximum length of such deferral period, the initial public
offering price, subordination terms, and any listing on a securities exchange
and other specific terms of the offering; and (ii) in the case of Capital
Securities, the designation, number of securities, liquidation preference per
security, initial public offering price, any listing on a securities exchange,
distribution rate (or method of calculation thereof), dates on which
distributions shall be payable and dates from which distributions shall accrue,
any voting rights, terms for any conversion or exchange into other securities,
any redemption, exchange or sinking fund provisions, any other rights,
preferences, privileges, limitations or restrictions relating to the Capital
Securities and the terms upon which the proceeds of the sale of the Capital
Securities shall be used to purchase a specific series of Subordinated Debt
Securities of Citicorp.
The Offered Securities may be offered in amounts, at prices and on terms
to be determined at the time of offering. The Prospectus Supplement relating to
any series of Offered Securities will contain information concerning the United
States federal income tax considerations applicable to purchasers of the Offered
Securities.
Citicorp and/or each of the Trusts may sell the Offered Securities
directly, through agents designated from time to time, or through underwriters
or dealers. See "Plan of Distribution" below. If any agents of Citicorp and/or
any Trust or any underwriters or dealers are involved in the sale of the Offered
Securities, the names of such agents, underwriters or dealers and any applicable
commissions and discounts will be set forth in any related Prospectus
Supplement.
This Prospectus and related Prospectus Supplements may be used by direct
or indirect subsidiaries of Citicorp in connection with offers and sales related
to secondary market transactions in the Offered Securities. Such subsidiaries
may act as principal or agent in such transactions. Such sales will be made at
prices related to prevailing market prices at the time of sale.
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This Prospectus may not be used to consummate sales of securities unless a
Prospectus Supplement is also delivered. The delivery of this Prospectus
together with a Prospectus Supplement relating to the Offered Securities with
respect to a particular Trust shall not constitute an offer in any jurisdiction
of any of the Offered Securities with respect to any other Trust.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.
The date of this Prospectus is January 28, 1998
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FOR NORTH CAROLINA RESIDENTS: THE COMMISSIONER OF INSURANCE OF THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS THE
COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
AVAILABLE INFORMATION
This Prospectus constitutes a part of a combined Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") filed by Citicorp and the Trusts with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Offered Securities and other securities.
This Prospectus does not contain all of the information set forth in such
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission, although it does include a summary
of the material terms of the Indenture and the Declaration of Trust (each as
defined herein). Reference is made to such Registration Statement and to the
exhibits relating thereto for further information with respect to the Company,
the Trusts and the Offered Securities. Any statements contained herein
concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission or incorporated by
reference herein are not necessarily complete, and, in each instance, reference
is made to the copy of such document so filed for a more complete description of
the matter involved. Each such statement is qualified in its entirety by such
reference.
Citicorp is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Reports, proxy statements and other information concerning Citicorp
can be inspected and copied at prescribed rates at the Commission's Public
Reference Room, Judiciary Plaza, 450 Fifth Street, Northwest, Washington, D.C.
20549, as well as the following Regional Offices of the Commission: 7 World
Trade Center, New York, New York 10048; and Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material may be obtained by mail
from the Commission's Public Reference Section at prescribed rates. If
available, such reports and other information may also be accessed through the
Commission's electronic data gathering, analysis and retrieval system ("EDGAR")
via electronic means, including the Commission's web site on the Internet
(http://www.sec.gov). Such reports, proxy statements and other information may
also be inspected at the offices of the New York Stock Exchange, the American
Stock Exchange, the Chicago Stock Exchange and the Pacific Stock Exchange.
No separate financial statements of any of the Trusts have been included
herein. Citicorp does not consider that such financial statements would be
material to holders of the Capital Securities because (i) all of the voting
securities of each of the Trusts will be owned, directly or indirectly, by
Citicorp, a reporting company under the Exchange Act, (ii) each of the Trusts
has no independent operations but exists for the sole purpose of issuing
securities representing undivided beneficial interests in the assets of such
Trust and investing the proceeds thereof in Subordinated Debt Securities issued
by Citicorp, and (iii) Citicorp's obligations described herein and in any
accompanying Prospectus Supplement to provide certain indemnities in respect of
and be responsible for certain costs, expenses, debts and liabilities of each
Trust under the Indenture and any
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supplemental indenture thereto and pursuant to the Declarations of each Trust,
the guarantee issued with respect to Capital Securities issued by that Trust,
the Subordinated Debt Securities purchased by that Trust and the related
Indenture, taken together, constitute a full and unconditional guarantee of
payments due on the Capital Securities. See "Description of the Subordinated
Debt Securities" and "Description of the Capital Securities Guarantees."
The Trusts are expected to be exempt from the information reporting
requirements of the Exchange Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Citicorp pursuant to
Section 13 of the Exchange Act are incorporated by reference in this Prospectus:
(a) Annual Report and Form 10-K for the fiscal year ended December 31,
1996;
(b) Financial Reviews and Forms 10-Q for the quarters ended March 31,
1997, June 30, 1997 and September 30, 1997; and
(c) Current Reports on Form 8-K dated January 21, 1997, April 15, 1997,
July 15, 1997, October 21, 1997and January 20, 1998.
All documents filed by Citicorp pursuant to Sections 13(a), 13(c), 14 or
15(d) of Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Offered Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in this Prospectus or
in a document incorporated or deemed to be incorporated by reference herein or
in any Prospectus Supplement shall be deemed to be modified or superseded for
purposes of this Prospectus or any Prospectus Supplement to the extent that a
statement contained herein or therein (or in any subsequently filed document
that also is or is deemed to be incorporated by reference herein or therein)
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus or any Prospectus Supplement.
Citicorp will provide without charge to each person to whom a copy of this
Prospectus has been delivered, upon the written or oral request of such person,
a copy of any or all of the documents referred to above which have been or may
be incorporated by reference herein (other than exhibits to such documents
unless such exhibits are specifically incorporated by reference in such
documents). Requests for such copies should be directed to Citicorp, 399 Park
Avenue, New York, New York 10043, Attention: Investor Relations Department,
(212) 559-2718.
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CITICORP
Citicorp, whose principal subsidiary is Citibank, N.A. ("Citibank"), is a
holding company incorporated under the laws of the State of Delaware on December
4, 1967. The principal office of Citicorp is located at 399 Park Avenue, New
York, New York 10043; its telephone number is (212) 559-1000. Through its
subsidiaries and affiliates, including Citibank, Citicorp is a global financial
services organization serving the financial needs of individuals, businesses,
governments and financial institutions in the United States and throughout the
world.
Holding Company
Citicorp is a legal entity separate and distinct from Citibank and its
other subsidiaries and affiliates. There are various legal limitations on the
extent to which Citicorp's bank subsidiaries may extend credit, pay dividends or
otherwise supply funds to Citicorp. The approval of the Office of the
Comptroller of the Currency is required if total dividends declared by a
national bank in any calendar year exceed net profits (as defined) for that year
combined with its retained net profits for the preceding two years. In addition,
dividends for such a bank may not be paid in excess of the bank's undivided
profits. State-chartered bank subsidiaries are subject to dividend limitations
imposed by applicable state law. In determining whether and to what extent to
pay dividends, each bank subsidiary must also consider the effect of dividend
payments on applicable risk-based capital and leverage ratio requirements as
well as policy statements of the federal regulatory agencies that indicate that
banking organizations should generally pay dividends out of current operating
earnings.
Citicorp also derives dividends from its non-bank subsidiaries. These
subsidiaries are not subject to regulatory restrictions on their payment of
dividends to Citicorp, except that the approval of the Office of Thrift
Supervision may be required if total dividends declared by a savings association
in any calendar year exceed amounts specified in that agency's regulations. In
addition, there are numerous governmental requirements and regulations that
affect the activities of Citicorp and its bank and non-bank subsidiaries.
Under longstanding policy of The Board of Governors of the Federal Reserve
System, a bank holding company is expected to act as a source of financial
strength for its subsidiary banks and to commit resources to support such banks.
As a result of that policy, Citicorp may be required to commit resources to its
subsidiary banks in circumstances where it might not otherwise do so.
Because Citicorp is a holding company, its rights and the rights of its
creditors and stockholders, including the holders of the Securities, to
participate in the assets of any subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of the subsidiary's
creditors, except to the extent that Citicorp may itself be a creditor with
recognized claims against the subsidiary.
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CITICORP RATIOS OF INCOME TO FIXED CHARGES
For the fiscal years ended December 31, 1997, 1996, 1995, 1994 and 1993,
Citicorp's consolidated ratios of income to fixed charges, computed as set forth
below, were as follows:
Year Ended December 31,
------------------------------------------
1997 1996 1995 1994 1993
Income to Fixed Charges:
Excluding Interest on Deposits 2.58 2.69 2.31 1.76 1.44
Including Interest on Deposits 1.43 1.48 1.42 1.31 1.18
For purposes of computing the consolidated ratio of income to fixed
charges, income represents net income, before extraordinary items and cumulative
effects of accounting changes, plus income taxes and fixed charges. Fixed
charges, excluding interest on deposits, represent interest expense (except
interest paid on deposits) and the interest factor included in rents. Fixed
charges, including interest on deposits, represent all interest expense and the
interest factor included in rents.
USE OF PROCEEDS
Each Trust will use the proceeds of the sale of the Capital Securities to
acquire Subordinated Debt Securities from Citicorp. Citicorp intends to apply
the net proceeds from the sale of the Subordinated Debt Securities to its
general funds to be used by its management for corporate purposes, principally
to fund investments in, or extensions of credit to, banking and non-banking
subsidiaries and to maintain adequate liquid balances. Except as otherwise
described in a Prospectus Supplement, specific allocations of the proceeds to
such purposes will not have been made at the date of the applicable Prospectus
Supplement, although the management of Citicorp will have determined that funds
should be raised at that time. The precise amount and timing of such investments
in and extensions of credit to the subsidiaries will depend upon their funding
requirements and the availability of other funds to Citicorp and its
subsidiaries. In considering whether Capital Securities should be offered, and
the amount of any offering, Citicorp will take into account statements of the
Board of Governors of the Federal Reserve System, Citicorp's primary banking
regulator, to the effect that such securities may qualify as Tier I capital, as
well as the federal income tax treatment of the Subordinated Debt Securities and
the Capital Securities and the cost of alternative sources of Tier I capital and
other funding.
THE TRUSTS
Each of the Trusts is a statutory business trust formed under Delaware law
pursuant to (i) a separate declaration of trust executed by the Company, as
sponsor for such trust (the "Sponsor") and the Trustees (as defined herein) for
such trust and (ii) the filing of a certificate of trust with the Delaware
Secretary of State. Each declaration will be amended and restated in its
entirety (each, as so amended and restated, a "Declaration") before the issuance
of the Capital Securities. Each Trust exists for the exclusive purposes of (i)
issuing the Capital Securities and common securities representing undivided
beneficial interests in the assets of such Trust (the "Common Securities" and,
together with the Capital Securities, the "Trust Securities"), (ii) investing
the gross proceeds of the
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Trust Securities in the Subordinated Debt Securities, and (iii) engaging in only
those other activities necessary or incidental thereto. The Declaration will
provide that no amendments that adversely affect the holders of a class of Trust
Securities may be effected without the consent of a majority in liquidation
amount of the outstanding Trust Securities of such class. All of the Common
Securities will be directly or indirectly owned by the Company. The Common
Securities will rank pari passu, and payments will be made thereon pro rata,
with the Capital Securities except that upon an event of default under the
Declaration, the rights of the holders of the Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and otherwise
will be subordinated to the rights of the holders of the Capital Securities. The
Company will, directly or indirectly, acquire Common Securities in an aggregate
liquidation amount equal to approximately 3 percent of the total capital of each
Trust. Each Trust has a term of approximately 55 years, but may earlier
terminate as provided in the Declaration. Each Trust's business and affairs will
be conducted by the trustees (the "Trustees") appointed by the Company, as the
direct or indirect holder of all the Common Securities. The holder of the Common
Securities will be entitled to appoint, remove or replace any of, or increase or
reduce the number of, the Trustees of a Trust, subject to certain restrictions.
The duties and obligations of the Trustees shall be governed by the Declaration
of such Trust. Each Trust will have one or more Trustees who are employees or
officers of or affiliated with the Company (the "Regular Trustees"). One Trustee
of each Trust will be a financial institution which will be unaffiliated with
the Company and which shall act as institutional trustee and as indenture
trustee for purposes of the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), pursuant to the terms set forth in a Prospectus Supplement (the
"Institutional Trustee"). In addition, unless the Institutional Trustee
maintains its principal place of business in the State of Delaware, and
otherwise meets the requirements of applicable law, one Trustee of each Trust
will have its principal place of business or reside in the State of Delaware
(the "Delaware Trustee"). The Company will pay all fees and expenses related to
the Trusts and the offering of Trust Securities, the payment of which will be
guaranteed by the Company. The office of the Delaware Trustee for each Trust in
the State of Delaware, and its principal place of business, is Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890.
DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
Subordinated Debt Securities may be issued from time to time in one or
more series under an Indenture (the "Indenture"), between the Company and
Wilmington Trust Company, as Trustee (the "Debt Trustee"). As used herein, the
term "Indenture" includes any supplemental indenture under which a particular
class of Subordinated Debt Securities may be issued. The terms of the
Subordinated Debt Securities will include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act. The
following summary of the material terms does not purport to be complete and is
subject in all respects to the provisions of, and is qualified in its entirety
by reference to, the Indenture, which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, and the Trust Indenture Act.
Whenever particular provisions or defined terms in the Indenture are referred to
herein, such provisions or defined terms are incorporated by reference herein.
Section and Article references used herein are references to provisions of the
Indenture unless otherwise noted.
General
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The Subordinated Debt Securities will be unsecured, subordinated
obligations of the Company. The Indenture does not limit the aggregate principal
amount of Subordinated Debt Securities which may be issued thereunder and
provides that the Subordinated Debt Securities may be issued from time to time
in one or more series. The Subordinated Debt Securities are issuable in one or
more series pursuant to an indenture supplemental to the Indenture or a
resolution of the Company's Board of Directors (each, a "Supplemental
Indenture").
In the event Subordinated Debt Securities are issued to a Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
such Trust, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, such Subordinated Debt Securities subsequently may
be distributed pro rata to the holders of such Trust Securities in connection
with the dissolution of such Trust upon the occurrence of certain events
described in the Prospectus Supplement relating to such Trust Securities. Only
one series of Subordinated Debt Securities will be issued to a Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
such Trust.
Reference is made to the Prospectus Supplement relating to the particular
Subordinated Debt Securities being offered thereby for the following terms: (1)
the designation of such Subordinated Debt Securities; (2) the aggregate
principal amount of such Subordinated Debt Securities; (3) the percentage of
their principal amount at which, and the denominations in which, such
Subordinated Debt Securities will be issued; (4) the date or dates on which such
Subordinated Debt Securities will mature and the right, if any, to extend or
shorten such date or dates; (5) the rate or rates, if any, per annum, at which
such Subordinated Debt Securities will bear interest, or the method of
determination of such rate or rates; (6) the date or dates from which such
interest shall accrue, the interest payment dates on which such interest will be
payable or the manner of determination of such interest payment dates and the
record dates for the determination of holders to whom interest is payable on any
such interest payment dates; (7) the right, if any, to extend the interest
payment periods and the maximum duration of such extension; (8) the period or
periods, if any, within which, the price or prices at which, and the terms and
conditions upon which such Subordinated Debt Securities may be redeemed,
converted or exchanged in whole or in part; (9) the form of such Subordinated
Debt Securities; and (10) any other specific terms of the Subordinated Debt
Securities. Principal, premium, if any, and interest, if any, will be payable,
and the Subordinated Debt Securities offered hereby will be transferable, at the
corporate trust office of the Debt Trustee in New York, New York, provided that
payment of interest, if any, may be made at the option of the Company by check
mailed to the address of the person entitled thereto as it appears in the
Security Register.
If a Prospectus Supplement specifies that a series of Subordinated Debt
Securities is denominated in a currency or currency unit other than United
States dollars, such Prospectus Supplement shall also specify the denomination
in which such Subordinated Debt Securities will be issued and the coin or
currency in which the principal, premium, if any, and interest, if any, on such
Subordinated Debt Securities will be payable, which may be United States dollars
based upon the exchange rate for such other currency or currency unit existing
on or about the time a payment is due.
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The covenants contained in the Indenture would not necessarily afford
protection to holders of the Subordinated Debt Securities in the event of a
decline in credit quality resulting from takeovers, recapitalization or similar
restructurings.
Form, Exchange, Registration, Transfer and Payment
Unless otherwise specified in the applicable Prospectus Supplement, the
Subordinated Debt Securities will be issued in fully registered form without
coupons and in denominations of $1,000 and multiples of $1,000. No service
charge will be made for any transfer or exchange of the Subordinated Debt
Securities, but the Company or the Debt Trustee may require payment of a sum
sufficient to cover any tax or other government charge payable in connection
therewith.
Unless otherwise provided in the applicable Prospectus Supplement,
principal and premium, if any, or interest, if any, will be payable and the
Subordinated Debt Securities may be surrendered for payment or transferred at
the offices of the Debt Trustee as paying and authenticating agent, provided
that payment of interest on registered securities may be made at the option of
the Company by check mailed to the address of the person entitled thereto as it
appears in the Security Register.
Book-Entry Subordinated Debt Securities
The Subordinated Debt Securities of a series may be issued in whole or in
part in the form of one or more global certificates ("Global Securities") that
will be deposited with, or on behalf of, a depositary (the "Global Depositary"),
or its nominee, identified in the Prospectus Supplement relating to such series.
In such a case, one or more Global Securities will be issued in a denomination
or aggregate denomination equal to the portion of the aggregate principal amount
of Outstanding Subordinated Debt Securities of the series to be represented by
such Global Security or Securities. Unless and until it is exchanged in whole or
in part for Subordinated Debt Securities in definitive registered form, a Global
Security may not be registered for transfer or exchange except as a whole by the
Global Depositary for such Global Security to a nominee for such Global
Depositary and except in the circumstances described in the applicable
Prospectus Supplement.
The terms of the depositary arrangement with respect to any portion of a
series of Subordinated Debt Securities to be represented by a Global Security
and a description of the Global Depositary will be provided in the applicable
Prospectus Supplement.
Subordination
The Subordinated Debt Securities will be unsecured obligations of the
Company and will be subordinated and junior in right of payment to certain other
indebtedness of the Company to the extent set forth in the applicable Prospectus
Supplement.
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Certain Covenants of the Company
If Subordinated Debt Securities are issued to a Trust or a trustee of such
trust in connection with the issuance of Trust Securities by such Trust and (i)
there shall have occurred any event that would constitute an Event of Default
(as defined herein) or (ii) the Company shall be in default with respect to its
payment of any obligations under the related Capital Securities Guarantee, then
(a) the Company shall not declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase, acquire for value or make a liquidation
payment with respect to, any of its capital stock (other than (x) purchases or
acquisitions of shares of Citicorp Common Stock in connection with the
satisfaction by Citicorp of its obligations under any employee benefit plans or
any other contractual obligation of Citicorp (other than a contractual
obligation ranking pari passu with or junior in right of payment to the
Subordinated Debt Securities) entered into prior to the issuance of the
Subordinated Debt Securities, (y) as a result of a reclassification of Citicorp
capital stock or the exchange or conversion of one class or series of Citicorp
capital stock for another class or series of Citicorp capital stock or (z) the
purchase of fractional interests in shares of Citicorp capital stock pursuant to
the conversion or exchange provisions of such Citicorp capital stock or the
security being converted or exchanged), and (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Company that rank pari passu with or
junior in right of payment to such Subordinated Debt Securities.
If Subordinated Debt Securities are issued to a Trust or a trustee of such
trust in connection with the issuance of Trust Securities by such Trust and the
Company shall have given notice of its election to defer payments of interest on
such Subordinated Debt Securities by extending the interest payment period as
provided in the Indenture and such period, or any extension thereof, shall be
continuing, then (a) subject to certain limited exceptions, the Company shall
not declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire for value or make a liquidation payment with respect
to, any of its capital stock, and (b) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company which rank pari passu with or junior in
right of payment to such Subordinated Debt Securities.
In the event Subordinated Debt Securities are issued to a Trust or a
trustee of such trust in connection with the issuance of Trust Securities of
such Trust, for so long as such Trust Securities remain outstanding, the Company
will covenant (i) to directly or indirectly maintain 100 percent ownership of
the Common Securities of such Trust; provided, however, that any permitted
successor of the Company under the Indenture may succeed to the Company's
ownership of such Common Securities, (ii) to use its reasonable efforts to cause
such Trust (a) to remain a statutory business trust, except in connection with
the distribution of Subordinated Debt Securities to the holders of Trust
Securities in liquidation of such Trust, the redemption of all of the Trust
Securities of such Trust, or certain mergers, consolidations or amalgamations,
each as permitted by the Declaration of such Trust, and (b) to continue not to
be classified as an association taxable as a corporation or a partnership for
United States federal income tax purposes, (iii) to use its reasonable efforts
to cause each holder of Trust Securities to be treated as owning an undivided
beneficial interest in the Subordinated Debt Securities and (iv) if at any time
the Trust or the Institutional Trustee shall be required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other
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than withholding taxes) imposed by the United States or any other taxing
authority, to pay as additional interest such additional amounts as shall be
required so that the net amounts received and retained by the Trust or the
Institutional Trustee after paying any such taxes, duties, assessments or other
governmental charges will be not less than the amounts the Trust would have
received had no such taxes, duties, assessments or other governmental charges
been imposed.
Limitation on Mergers and Sales of Assets
The Company shall not consolidate with, or merge into, any corporation or
convey or transfer its properties and assets substantially as an entirety to any
Person unless (a) the successor entity shall be a corporation organized under
the laws of any domestic or foreign jurisdiction and shall expressly assume the
obligations of the Company under the Indenture and (b) after giving effect
thereto, no Event of Default shall have occurred and be continuing under the
Indenture.
Events of Default, Waiver and Notice
The Indenture provides than any one or more of the following described
events which has occurred and is continuing constitutes an "Event of Default"
with respect to each series of Subordinated Debt Securities:
(a) default for 30 days in payment of any interest on the Subordinated
Debt Securities of that series, including any Additional Interest in respect
thereof, when due; provided, however, that a valid extension of the interest
payment period by the Company shall not constitute a default in the payment of
interest for this purpose; or
(b) default in payment of principal and premium, if any, on the
Subordinated Debt Securities of that series when due either at maturity, upon
redemption, by declaration or otherwise; provided, however, that a valid
extension of the maturity of such Subordinated Debt Securities shall not
constitute a default for this purpose; or
(c) default by the Company in the performance of any other of the
covenants or agreements in the Indenture which shall not have been remedied for
a period of 90 days after notice; or
(d) certain events of bankruptcy, insolvency or reorganization of the
Company; or
(e) in the event Subordinated Debt Securities are issued to a Trust or a
trustee of such Trust in connection with the issuance of Trust Securities by
such Trust, the voluntary or involuntary dissolution, winding-up or termination
of such Trust, except in connection with the distribution of Subordinated Debt
Securities to the holders of Trust Securities in liquidation of such Trust, the
redemption of all of the Trust Securities of such Trust, or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration of such
Trust.
The Indenture provides that the Debt Trustee may withhold notice to the
holders of a series of Subordinated Debt Securities (except in payment of
principal or of interest or premium on the Subordinated Debt Securities) if the
Trustee considers it in the interest of such holders to do so.
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The Indenture provides that, (a) if an Event of Default due to the default
in the payment of principal, interest or premium, if any, on any series of
Subordinated Debt Securities shall have occurred and be continuing, either the
Debt Trustee or the holders of 25 percent in principal amount of the
Subordinated Debt Securities of all series affected thereby then outstanding may
declare the principal of all such Subordinated Debt Securities to be due and
payable immediately, and (b) if an Event of Default resulting from default in
the performance of any other of the covenants or agreements in the Indenture or
certain events of bankruptcy, insolvency and reorganization of the Company shall
have occurred and be continuing, either the Debt Trustee or the holders of 25
percent in principal amount of all Subordinated Debt Securities then outstanding
(treated as one class) may declare the principal of all Subordinated Debt
Securities to be due and payable immediately, but upon certain conditions such
declarations may be annulled and past defaults may be waived (except defaults in
payment of principal of or interest or premium on the Subordinated Debt
Securities) by the holders of a majority in principal amount of the Subordinated
Debt Securities of such series (or of all series, as the case may be) then
outstanding.
The holders of a majority in principal amount of the Subordinated Debt
Securities of any and all series affected and then outstanding shall have the
right, subject to certain restrictions, to direct the time, method and place of
conducting any proceeding for any remedy available to the Debt Trustee under the
Indenture, provided that the holders of the Subordinated Debt Securities shall
have offered to the Debt Trustee reasonable indemnity against expenses and
liabilities. The Indenture requires the annual filing by the Company with the
Debt Trustee of a certificate as to the absence of certain defaults under the
Indenture.
Modification of the Indenture
The Indenture contains provisions permitting the Company and the Debt
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Subordinated Debt Securities of all series affected by
such modification at the time outstanding, to modify the Indenture or any
supplemental indenture or the rights of the holders of the Subordinated Debt
Securities; provided that no such modification shall (i) extend the fixed
maturity of any Security, or reduce the principal amount thereof (including in
the case of a discounted Security the amount payable thereon in the event of
acceleration or the amount provable in bankruptcy) or any redemption premium
thereon, or reduce the rate or extend the time of payment of interest thereon,
or make the principal of, or interest or premium on, the Subordinated Debt
Securities payable in any coin or currency other than that provided in the
Subordinated Debt Securities, or impair or affect the right of any holder of
Subordinated Debt Securities to institute suit for the payment thereof or the
right of prepayment, if any, at the option of the holder, without the consent of
the holder of each Security so affected, or (ii) reduce the aforesaid percentage
of Subordinated Debt Securities the consent of the holders of which is required
for any such modification without the consent of the holders of each Security
affected.
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Defeasance and Discharge
The Indenture provides that the Company, at the Company's option: (a) will
be discharged from any and all obligations in respect of the Subordinated Debt
Securities of a series (except for certain obligations to register the transfer
or exchange of Subordinated Debt Securities, replace stolen, lost or mutilated
Subordinated Debt Securities, maintain paying agencies and hold moneys for
payment in trust) or (b) need not comply with certain restrictive covenants of
the Indenture (including those described under "Certain Covenants of the
Company"), in each case if the Company deposits, in trust with the Debt Trustee
or the Defeasance Agent, money or U.S. Government Obligations which through the
payment of interest thereon and principal thereof in accordance with their terms
will provide money, in an amount sufficient to pay all the principal (including
any mandatory sinking fund payments) of, and interest and premium, if any, on,
the Subordinated Debt Securities of such series on the dates such payments are
due in accordance with the terms of such Subordinated Debt Securities, and if
certain other conditions are met. To exercise any such option, the Company is
required to deliver to the Debt Trustee and the Defeasance Agent, if any, an
opinion of counsel to the effect that (i) the deposit and related defeasance
would not cause the holders of the Subordinated Debt Securities of such series
to recognize income, gain or loss for U.S. federal income tax purposes and, in
the case of a Discharge pursuant to clause (a), such opinion shall be
accompanied by a private letter ruling to the effect received by Citicorp from
the United States Internal Revenue Service or a revenue ruling pertaining to a
comparable form of transaction to the effect published by the United States
Internal Revenue Service, and (ii) if listed on any national securities
exchange, such Subordinated Debt Securities would not be delisted from such
exchange as a result of the exercise of such option.
Governing Law
The Indenture and the Subordinated Debt Securities will be governed by,
and construed in accordance with, the laws of the State of New York.
The Debt Trustee
The Company or its affiliates maintain certain accounts and other banking
relationships with the Debt Trustee and its affiliates.
DESCRIPTION OF THE CAPITAL SECURITIES
Each Trust may issue, from time to time, only one series of Capital
Securities having terms described in the Prospectus Supplement relating thereto.
The Declaration of each Trust authorizes the Regular Trustees of such Trust to
issue on behalf of such Trust one series of Capital Securities. The Declaration
will be qualified as an indenture under the Trust Indenture Act. The Capital
Securities will have such terms, including distributions, redemption, voting,
liquidation rights and such other preferred, deferred or other special rights or
such restrictions as shall be set forth in the Declaration or made part of the
Declaration by the Trust Indenture Act and which will substantially mirror the
terms of the Subordinated Debt Securities held by the Trust and described in the
Prospectus Supplement relating thereto. Reference is made to the Prospectus
Supplement relating
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to the Capital Securities of the Trust for specific terms, including (i) the
distinctive designation of such Capital Securities; (ii) the number of Capital
Securities issued by such Trust; (iii) the annual distribution rate (or method
of determining such rate) for Capital Securities issued by such Trust and the
date or dates upon which such distributions shall be payable; (iv) whether
distributions on Capital Securities issued by such Trust shall be cumulative,
and, in the case of Capital Securities having such cumulative distribution
rights, the date or dates or method of determining the date or dates from which
distributions on Capital Securities issued by such Trust shall be cumulative;
(v) the amount or amounts which shall be paid out of the assets of such Trust to
the holders of Capital Securities of such Trust upon voluntary or involuntary
dissolution of such Trust; (vi) the obligation, if any, of such Trust to
purchase or redeem Capital Securities issued by such Trust and the price or
prices at which, the period or periods within which, and the terms and
conditions upon which, Capital Securities issued by such Trust shall be
purchased or redeemed, in whole or in part, pursuant to such obligation; (vii)
the voting rights, if any, of Capital Securities issued by such Trust in
addition to those required by law, including the number of votes per Capital
Security and any requirement for the approval by the holders of Capital
Securities, or of Capital Securities issued by one or more Trusts, or of both,
as a condition to specified action or amendments to the Declaration of such
Trust; (viii) the terms and conditions, if any, upon which the Subordinated Debt
Securities may be distributed to holders of Capital Securities; (ix) if
applicable, any securities exchange upon which the Capital Securities shall be
listed; and (x) any other relevant rights, preferences, privileges, limitations
or restrictions of Capital Securities issued by such Trust not inconsistent with
the Declaration of such Trust or with applicable law. Pursuant to the Indenture,
for as long as Subordinated Debt Securities are held by a Trust, any amendment
to the Indenture that would require the consent of a majority of the holders of
Subordinated Debt Securities or all such holders will require the consent of a
majority in liquidation amount of the Trust Securities of such Trust or all
holders of such Trust Securities, respectively. Unless otherwise specified in
the applicable Prospectus Supplement, a redemption of Subordinated Debt
Securities will result in a redemption of a corresponding amount of Trust
Securities. Citicorp's obligations under the Capital Securities Guarantees,
taken together with its obligations under the Subordinated Debt Securities, the
Indenture and the Declarations, will provide a full and unconditional guarantee
on a subordinated basis by Citicorp of payments due on the Capital Securities.
Certain United States federal income tax considerations applicable to any
offering of Capital Securities will be described in the Prospectus Supplement
relating thereto.
In connection with the issuance of Capital Securities, each Trust will
issue one series of Common Securities. The Declaration of each Trust authorizes
the Regular Trustees of such trust to issue on behalf of such Trust one series
of Common Securities having such terms including distributions, redemption,
voting, liquidation rights or such restrictions as shall be set forth therein.
Except for voting rights, the terms of the Common Securities issued by a Trust
will be substantially identical to the terms of the Capital Securities issued by
such trust and the Common Securities will rank pari passu, and payments will be
made thereon pro rata, with the Capital Securities except that, upon an event of
default under the Declaration, the rights of the holders of the Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Capital Securities. Except in certain limited circumstances, the Common
Securities will also carry the right to vote to appoint, remove or replace
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any of the Trustees of a Trust. All of the Common Securities of each Trust will
be directly or indirectly owned by the Company.
Enforcement of Certain Rights by Holders of Capital Securities
If an Event of Default under the Declaration of a Trust occurs and is
continuing, then the holders of Capital Securities of such Trust would rely on
the enforcement by the Institutional Trustee of its rights as a holder of the
applicable series of Subordinated Debt Securities against the Company. In
addition, the holders of a majority in liquidation amount of the Capital
Securities of such Trust will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or to direct the exercise of any trust or power conferred upon the
Institutional Trustee under the applicable Declaration, including the right to
direct the Institutional Trustee to exercise the remedies available to it as a
holder of the Subordinated Debt Securities. If the Institutional Trustee fails
to enforce its rights under the applicable series of Subordinated Debt
Securities, a holder of Capital Securities of such Trust may institute a legal
proceeding directly against the Company to enforce the Institutional Trustee's
rights under the applicable series of Subordinated Debt Securities without first
instituting any legal proceeding against the Institutional Trustee or any other
person or entity. Notwithstanding the foregoing, if an Event of Default under
the applicable Declaration has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest or principal on the
applicable series of Subordinated Debt Securities on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a holder of Capital Securities of such Trust may directly institute
a proceeding for enforcement of payment to such holder of the principal of or
interest on the applicable series of Subordinated Debt Securities having a
principal amount equal to the aggregate liquidation amount of the Capital
Securities of such holder (a "Direct Action") on or after the respective due
date specified in the applicable series of Subordinated Debt Securities. In
connection with such Direct Action, the Company will be subrogated to the rights
of such holder of Capital Securities under the applicable Declaration to the
extent of any payment made by the Company to such holder of Capital Securities
in such Direct Action.
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DESCRIPTION OF THE CAPITAL SECURITIES GUARANTEES
Set forth below is a summary of information concerning the Capital
Securities Guarantees which will be executed and delivered by Citicorp for the
benefit of the holders from time to time of Capital Securities. Each Capital
Securities Guarantee will be qualified as an indenture under the Trust Indenture
Act. Wilmington Trust Company will act as indenture trustee under each Capital
Securities Guarantee for purposes of the Trust Indenture Act (the "Capital
Guarantee Trustee"). The terms of each Capital Securities Guarantee will be
those set forth in such Capital Securities Guarantee and those made part of such
Capital Securities Guarantee by the Trust Indenture Act. This summary of the
material terms of the Capital Securities Guarantees does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the form of Capital Securities Guarantee, which
is filed as an exhibit to the Registration Statement of which this Prospectus
forms a part, and the Trust Indenture Act. Each Capital Securities Guarantee
will be held by the Capital Guarantee Trustee for the benefit of the holders of
the Capital Securities of the applicable Trust.
General
Pursuant to each Capital Securities Guarantee, the Company will
irrevocably agree, to the extent set forth therein, to pay in full, to the
holders of the Capital Securities issued by a Trust, the Guarantee Payments (as
defined herein) (except to the extent paid by such Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which such Trust may
have or assert. The following payments with respect to Capital Securities issued
by a Trust to the extent not paid by such Trust (the "Guarantee Payments"), will
be subject to the Capital Securities Guarantee thereon (without duplication):
(i) any accrued and unpaid distributions which are required to be paid on such
Capital Securities, to the extent such Trust shall have funds available
therefor; (ii) the redemption price, including all accrued and unpaid
distributions to the date of payment (the "Redemption Price"), to the extent
such Trust has funds available therefor with respect to any Capital Securities
called for redemption by such Trust and (iii) upon a voluntary or involuntary
dissolution of such Trust (other than in connection with the distribution of
Subordinated Debt Securities to the holders of Capital Securities or the
redemption of all of the Capital Securities), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid distributions on such Capital
Securities to the date of payment, to the extent such Trust has funds available
therefor and (b) the amount of assets of such Trust remaining available for
distribution to holders of such Capital Securities in liquidation of such Trust.
The redemption price and liquidation amount will be fixed at the time the
Capital Securities are issued. The Company's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Company to the holders of Capital Securities or by causing the applicable Trust
to pay such amounts to such holders.
Each Capital Securities Guarantee will not apply to any payment of
distributions except to the extent such Trust shall have funds available
therefor. If the Company does not make interest payments on the Subordinated
Debt Securities purchased by a Trust, such Trust will not pay distributions on
the Capital Securities issued by such Trust and will not have funds available
therefor. See "Description of the Subordinated Debt Securities -- Certain
Covenants of the Company." The Capital Securities Guarantees, when taken
together with the Company's obligations
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under the Subordinated Debt Securities, the Indenture and the Declarations,
including its obligations in the Indenture to pay costs, expenses, debts and
liabilities of such Trust (other than with respect to the Trust Securities),
will provide a full and unconditional guarantee on a subordinated basis by the
Company of payments due on the Capital Securities.
The Company has also agreed separately to irrevocably guarantee the
obligations of the Trusts with respect to the Common Securities (the "Common
Securities Guarantees") to the same extent as the Capital Securities Guarantees,
except that upon an Event of Default under the Indenture, holders of Capital
Securities shall have priority over holders of Common Securities with respect to
distributions and payments on liquidation, redemption or otherwise.
Certain Covenants of the Company
In each Capital Securities Guarantee, the Company will covenant that, so
long as any Capital Securities issued by the applicable Trust remain
outstanding, if there shall have occurred any event that would constitute an
event of default under such Capital Securities Guarantee or the Declaration of
such Trust, then (a) the Company shall not declare or pay any dividend on, make
any distributions with respect to, or redeem, purchase, acquire for value or
make a liquidation payment with respect to, any of its capital stock (other than
(i) purchases or acquisitions of shares of Citicorp Common Stock in connection
with the satisfaction by Citicorp of its obligations under any employee benefit
plans or any other contractual obligation of Citicorp (other than a contractual
obligation ranking pari passu with or junior in right of payment to the
Subordinated Debt Securities issued to the related Trust) entered into prior to
issuance of the Subordinated Debt Securities, (ii) as a result of a
reclassification of Citicorp capital stock or the exchange or conversion of one
class or series of Citicorp capital stock for another class or series of
Citicorp capital stock or (iii) the purchase of fractional interests in shares
of Citicorp capital stock pursuant to the conversion or exchange provisions of
such Citicorp capital stock or the security being converted or exchanged) and
(b) the Company shall not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities issued by the Company
which rank pari passu with or junior in right of payment to such Subordinated
Debt Securities.
Modification of the Capital Securities Guarantees; Assignment
Except with respect to any changes which do not adversely affect the
rights of holders of Capital Securities (in which case no vote will be
required), each Capital Securities Guarantee may be amended only with the prior
approval of the holders of not less than a majority in liquidation amount of the
outstanding Capital Securities issued by the applicable Trust. The manner of
obtaining any such approval of holders of such Capital Securities will be as set
forth in an accompanying Prospectus Supplement. All guarantees and agreements
contained in a Capital Securities Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to the
benefit of the holders of the Capital Securities of the applicable Trust then
outstanding.
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Termination
Each Capital Securities Guarantee will terminate as to the Capital
Securities issued by the applicable Trust (a) upon full payment of the
Redemption Price of all Capital Securities of such Trust, (b) upon distribution
of the Subordinated Debt Securities held by such Trust to the holders of the
Capital Securities of such Trust or (c) upon full payment of the amounts payable
in accordance with the Declaration of such Trust upon liquidation of such Trust.
Each Capital Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of Capital Securities
issued by the applicable Trust must restore payment of any sums paid under such
Capital Securities or such Capital Securities Guarantee.
Events of Default
An event of default under a Capital Securities Guarantee will occur upon
the failure of the Company to perform any of its payment or other obligations
thereunder.
The holders of a majority in liquidation amount of the Capital Securities
relating to such Capital Securities Guarantee have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Capital Guarantee Trustee in respect of the Capital Securities Guarantee or to
direct the exercise of any trust or power conferred upon the Capital Guarantee
Trustee under such Capital Securities Guarantee. If the Capital Guarantee
Trustee fails to enforce such Capital Securities Guarantee, any holder of
Capital Securities relating to such Capital Securities Guarantee may institute a
legal proceeding directly against the Company to enforce the Capital Guarantee
Trustee's rights under such Capital Securities Guarantee, without first
instituting a legal proceeding against the relevant Trust, the Capital Guarantee
Trustee or any other person or entity. Notwithstanding the foregoing, if the
Company has failed to make a guarantee payment, a holder of Capital Securities
may directly institute a proceeding against the Company for enforcement of the
Capital Securities Guarantee for such payment. The Company waives any right or
remedy to require that any action be brought first against such Trust or any
other person or entity before proceeding directly against the Company.
Status of the Capital Securities Guarantees
The Capital Securities Guarantees will constitute unsecured obligations of
the Company and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Company, (ii) pari passu with the most senior preferred
or preference stock now or hereafter issued by the Company and with any
guarantee now or hereafter entered into by Citicorp in respect of any preferred
or preference stock of any affiliate of the Company, and (iii) senior to the
Company's common stock. The terms of the Capital Securities provide that each
holder of Capital Securities issued by the applicable Trust by acceptance
thereof agrees to the subordination provisions and other terms of the Capital
Securities Guarantee relating thereto.
The Capital Securities Guarantees will constitute a guarantee of payment
and not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the guarantor
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to enforce its rights under the Capital Securities Guarantee without instituting
a legal proceeding against any other person or entity).
Information Concerning the Capital Guarantee Trustee
The Capital Guarantee Trustee, prior to the occurrence of a default with
respect to a Capital Securities Guarantee, undertakes to perform only such
duties as are specifically set forth in such Capital Securities Guarantee and,
after default, shall exercise the same degree of care as a prudent individual
would exercise in the conduct of his or her own affairs. Subject to such
provisions, the Capital Guarantee Trustee is under no obligation to exercise any
of the powers vested in it by a Capital Securities Guarantee at the request of
any holder of Capital Securities, unless offered reasonable indemnity against
the costs, expenses and liabilities which might be incurred thereby.
The Company or its affiliates maintain certain accounts and other banking
relationships with the Capital Guarantee Trustee and its affiliates.
Governing Law
The Capital Securities Guarantees will be governed by and construed in
accordance with the laws of the State of New York.
EFFECT OF OBLIGATIONS UNDER THE
SUBORDINATED DEBT SECURITIES AND THE CAPITAL SECURITIES
GUARANTEE
As set forth in the Declaration, the sole purpose of each of the Trusts is
to issue the Trust Securities evidencing undivided beneficial interests in the
assets of each of the Trusts, and to invest the proceeds from such issuance and
sale in the Subordinated Debt Securities.
As long as payments of interest and other payments are made when due on
the Subordinated Debt Securities, such payments will be sufficient to cover
distributions and payments due on the Trust Securities because of the following
factors: (i) the aggregate principal amount of Subordinated Debt Securities will
be equal to the sum of the aggregate stated liquidation amount of the Trust
Securities; (ii) the interest rate and the interest and other payment dates on
the Subordinated Debt Securities will match the distribution rate and
distribution and other payment dates for the Capital Securities; (iii) Citicorp
shall pay all, and the applicable Trust shall not be obligated to pay, directly
or indirectly, all costs, expenses, debts, and obligations of the applicable
Trust (other than with respect to the Trust Securities); and (iv) the
Declaration further provides that the Citicorp Trustees shall not, and shall not
cause or permit the applicable Trust to, among other things, engage in any
activity that is not consistent with the purposes of the applicable Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Capital Securities (to the extent funds therefor are
available) are guaranteed by Citicorp as and to the extent set forth under
"Description of the Capital Securities Guarantees." If Citicorp does not make
interest payments on the Subordinated Debt Securities purchased by the
applicable Trust,
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it is expected that the applicable Trust will not have sufficient funds to pay
distributions on the Capital Securities. The Capital Securities Guarantee does
not apply to any payment of distributions unless and until the applicable Trust
has sufficient funds for the payment of such distributions. The Capital
Securities Guarantee covers the payment of distributions and other payments on
the Capital Securities only if and to the extent that Citicorp has made a
payment of interest or principal on the Subordinated Debt Securities held by the
applicable Trust as its sole asset. The Capital Securities Guarantees, when
taken together with Citicorp's obligations under the Subordinated Debt
Securities and the Indenture and its obligations under the Declarations,
including its obligations in the Indenture to pay costs, expenses, debts and
liabilities of the applicable Trust (other than with respect to the Trust
Securities), provide a full and unconditional guarantee on a subordinated basis
by Citicorp of amounts payable on the Capital Securities.
Notwithstanding the foregoing, if Citicorp fails to make interest or other
payments on the Subordinated Debt Securities when due (taking account of any
Extension Period described in any Prospectus Supplement), or if any other Event
of Default occurs under the Indenture, the Declaration provides a mechanism
whereby the holders of the Capital Securities, using the procedures described in
"Description of the Capital Securities -- Book-Entry Only Issuance -- The
Depository Trust Company" and "-- Voting Rights" in any accompanying Prospectus
Supplement, may direct the Institutional Trustee to enforce its rights under the
Subordinated Debt Securities. If the Institutional Trustee fails to enforce its
rights under the Subordinated Debt Securities, a holder of Capital Securities
may institute a legal proceeding against Citicorp to enforce the Institutional
Trustee's rights under the Subordinated Debt Securities without first
instituting any legal proceeding against the Institutional Trustee or any other
person or entity. Notwithstanding the foregoing, if an event of default under
the Declaration (a "Declaration Event of Default") has occurred and is
continuing and such event is attributable to the failure of Citicorp to pay
interest or principal on the Subordinated Debt Securities on the date such
interest or principal is otherwise payable (or in the case of redemption on the
redemption date), then a holder of Capital Securities may institute a Direct
Action for payment on or after the respective due date specified in the
Subordinated Debt Securities. In connection with such Direct Action, Citicorp
will be subrogated to the rights of such holder of Capital Securities under the
Declaration to the extent of any payment made by Citicorp to such holder of
Capital Securities in such Direct Action. Citicorp, under the Capital Securities
Guarantee, acknowledges that the Guarantee Trustee shall enforce the Capital
Securities Guarantee on behalf of the holders of the Capital Securities. If
Citicorp fails to make payments under the Capital Securities Guarantee, the
Capital Securities Guarantee provides a mechanism whereby the holders of the
Capital Securities may direct the Guarantee Trustee to enforce its rights
thereunder. Any holder of Capital Securities may institute a legal proceeding
directly against Citicorp to enforce the Guarantee Trustee's rights under the
Capital Securities Guarantee without first instituting a legal proceeding
against the applicable Trust, the Guarantee Trustee, or any other person or
entity.
PLAN OF DISTRIBUTION
Citicorp may sell the Subordinated Debt Securities and any Trust may sell
Capital Securities in any of, or any combination of, the following ways: (i)
directly to purchasers, (ii) through agents and (iii) through underwriters or
dealers. Such underwriters, dealers or agents may be affiliates of
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Citicorp, and offers or sales of such securities may include secondary market
transactions by affiliates of Citicorp.
Offers to purchase Offered Securities may be solicited directly by
Citicorp and/or any Trust, as the case may be, or by agents designated by
Citicorp and/or any Trust, as the case may be, from time to time. Any such
agent, who may be deemed to be an underwriter as that term is defined in the
Securities Act, involved in the offer or sale of the Offered Securities in
respect of which this Prospectus is delivered will be named, and any commissions
payable by Citicorp to such agent will be set forth, in the Prospectus
Supplement. Unless otherwise indicated in the Prospectus Supplement, any such
agency will be acting on a best efforts basis for the period of its appointment
(ordinarily five business days or less). Agents, dealers and underwriters may be
customers of, engage in transactions with, or perform services for the Company
in the ordinary course of business.
If an underwriter or underwriters are utilized in the sale, Citicorp will
execute an underwriting agreement with such underwriters at or prior to the time
of sale to them and the names of the underwriters and the terms of the
transaction will be set forth in the Prospectus Supplement, which will be used
by the underwriters to make releases of the Offered Securities in respect of
which this Prospectus is delivered to the public.
If a dealer is utilized in the sale of the Offered Securities in respect
of which this Prospectus is delivered, Citicorp and/or any Trust, as the case
may be, will sell such Offered Securities to the dealer, as principal. The
dealer may then resell such Offered Securities to the public at varying prices
to be determined by such dealer at the time of resale. The name of the dealer
and the terms of the transaction will be set forth in the Prospectus Supplement.
Agents, underwriters, and dealers may be entitled under the relevant
agreements to indemnification by Citicorp and/or any Trust, as the case may be,
against certain liabilities, including liabilities under the Securities Act.
This Prospectus and related Prospectus Supplement may be used by direct or
indirect subsidiaries of Citicorp in connection with offers and sales related to
secondary market transactions. Such subsidiaries may act as principal or agent
in such transactions. Such sales may be made at prices related to prevailing
market prices at the time of sale.
The participation of an affiliate or subsidiary of Citicorp in the offer
and sale of the Offered Securities will comply with the requirements of Rule
2720 of the Conduct Rules of the National Association of Securities Dealers,
Inc. (the "NASD") regarding underwriting securities of the affiliate. No NASD
member participating in offers and sales will execute a transaction in the
Securities in a discretionary account without the prior written specific
approval of the member's customer.
Underwriters, agents or their controlling persons may engage in
transactions with and perform services for Citicorp in the ordinary course of
business.
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VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Capital
Securities will be passed upon on behalf of the Trusts by Morris, Nichols, Arsht
& Tunnell, special Delaware counsel to the Trusts. The validity of the
Subordinated Debt Securities and the Capital Securities Guarantee and certain
matters relating thereto will be passed upon for Citicorp by Stephen E. Dietz,
an Associate General Counsel of Citibank, N.A. Mr. Dietz owns or has the right
to acquire a number of shares of Common Stock of Citicorp equal to less than
0.01% of the outstanding Common Stock of Citicorp.
EXPERTS
The consolidated financial statements of Citicorp and subsidiaries
included in Citicorp's Annual Report and Form 10-K for 1996 have been
incorporated herein by reference in reliance upon the report set forth therein
of KPMG Peat Marwick LLP, independent certified public accountants, and upon the
authority of said firm as experts in accounting and auditing. The report of KPMG
Peat Marwick LLP, covering the December 31, 1996 financial statements, refers to
the fact that in 1994 Citicorp adopted Statement of Financial Accounting
Standards ("SFAS") No. 112, "Employers' Accounting for Postemployment Benefits"
and SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities."
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FORM OF PROSPECTUS SUPPLEMENT
- -----------------------------
PROSPECTUS SUPPLEMENT
- ---------------------
(To Prospectus dated _____________)
$_________
Citicorp Capital [III]
_____% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
fully and unconditionally guaranteed by
Citicorp
_____________
The ____% Capital Securities (the "Capital Securities") offered hereby
represent preferred undivided beneficial interests in the assets of Citicorp
Capital [III], a statutory business trust formed under the laws of the State of
Delaware (the "Trust"). Citicorp, a Delaware corporation ("Citicorp" or the
"Company"), will own all the common securities (the "Common Securities" and,
together with the Capital Securities, the "Trust Securities") representing
undivided beneficial interests in the assets of the Trust. The Trust exists for
the sole purpose of issuing the Trust Securities and investing the proceeds
thereof in an equivalent amount of _____% Junior Subordinated Deferrable
Interest Debentures due ____________ (the "Subordinated Debt Securities") of
Citicorp. The Subordinated Debt Securities and the Capital Securities in respect
of which this Prospectus Supplement is being delivered are referred to herein as
the "Offered Securities." The Subordinated Debt Securities will be unsecured
obligations of Citicorp and will be subordinate and junior in right of payment
to all Senior Indebtedness of Citicorp, as described herein. Upon an event of
default under the Declaration (as defined herein), the holders of Capital
Securities will have a preference over the holders of the Common Securities with
respect to payments in respect of distributions and payments upon redemption,
liquidation and otherwise. Payments of distributions on the Capital Securities
may be deferred at any time for up to 10 consecutive semiannual periods. In
addition, Citicorp will have the right to redeem the Subordinated Debt
Securities at any time on or after _____________ and, prior to that date, to
redeem the Subordinated Debt Securities or to cause the distribution of the
Subordinated Debt Securities to the holders of Capital Securities upon the
occurrence of certain events. See "Special Considerations" on page ___.
(continued on next page)
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY
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OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
================================================================================
Initial Public Underwriting Proceeds to Trust
Offering Price (1) Commission (2) (3)(4)
- --------------------------------------------------------------------------------
Per Capital Security $_______ (3) $________
- --------------------------------------------------------------------------------
Total $_______ (3) $________
================================================================================
(1) Plus accrued distributions, if any, from ___________.
(2) The Trust and Citicorp have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting."
(3) Because the proceeds of the sale of the Capital Securities will be
invested in the Subordinated Debt Securities, Citicorp has agreed to
pay to the Underwriters as compensation (the "Underwriters'
Compensation") for their arranging the investment therein of such
proceeds $____ per Capital Security (or $_______ in the aggregate).
See "Underwriting."
(4) Expenses of the offering, which are payable by Citicorp, are
estimated to be $________.
_____________________
The Capital Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that delivery of the Capital Securities will be made only in book-entry form
through the facilities of The Depository Trust Company on or about ___________.
_____________________
_____________________
The date of this Prospectus Supplement is ____________.
<PAGE>
(continued from previous page)
Holders of the Capital Securities are entitled to receive cumulative cash
distributions at an annual rate of _____% of the liquidation amount of $1,000
per Capital Security, accruing from the date of original issuance and payable
semiannually in arrears on ______ and ________ of each year, commencing ________
("distributions"). The payment of distributions out of moneys held by the Trust
and payments on liquidation of the Trust or the redemption of Capital
Securities, as set forth below, are guaranteed by Citicorp (the "Guarantee") to
the extent described herein and under "Description of the Capital Securities
Guarantees" in the accompanying Prospectus. The Guarantee covers payments of
distributions and other payments on the Capital Securities only if and to the
extent that the Trust has funds available therefor, which will not be the case
unless Citicorp has made a payment of interest or principal or other payments on
the Subordinated Debt Securities held by the Trust as its sole asset. The
Guarantee, when taken together with Citicorp's obligations under the
Subordinated Debt Securities and the Indenture (as defined herein) and its
obligations under the Declaration (as defined herein), including its undertaking
to pay all costs, expenses, debts and other obligations of the Trust (other than
with respect to the Trust Securities), provide a full and unconditional
guarantee of amounts due on the Capital Securities. The obligations of Citicorp
under the Guarantee are subordinate and junior in right of payment to all other
liabilities of Citicorp and rank pari passu with the most senior preferred stock
issued from time to time, if any, by Citicorp.
The distribution rate and the distribution payment date and other payment
dates for the Capital Securities will correspond to the interest rate and
interest payment date and other payment dates on the Subordinated Debt
Securities, which will be the sole assets of the Trust. As a result, if
principal or interest is not paid on the Subordinated Debt Securities, no
amounts will be paid on the Capital Securities. If Citicorp does not make
principal or interest payments on the Subordinated Debt Securities, the Trust
will not have sufficient funds to make distributions on the Capital Securities,
in which event, the Guarantee will not apply to such distributions until the
Trust has sufficient funds available therefor.
So long as no Event of Default has occurred and is continuing under the
Indenture, Citicorp has the right to defer payments of interest on the
Subordinated Debt Securities by extending the interest payment period on the
Subordinated Debt Securities at any time and from time to time for up to 10
consecutive semiannual interest periods (each, an "Extension Period"), provided
that no Extension Period may extend beyond the Maturity Date (as defined below).
If interest payments are so deferred, distributions on the Capital Securities
will also be deferred. During such Extension Period, distributions will continue
to accrue with interest thereon (to the extent permitted by applicable law) at
an annual rate of ____% per annum compounded semiannually, and holders of
Capital Securities will be required to include deferred interest income in their
gross income for United States federal income tax purposes in advance of receipt
of the cash distributions with respect to such deferred interest payments. There
could be multiple Extension Periods of varying lengths of up to 10 consecutive
semiannual interest periods each throughout the term of the Subordinated Debt
Securities. See "Description of the Subordinated Debt Securities--Option to
Extend Interest Payment Period" and "United States Federal Income
Taxation--Interest and Original Issue Discount."
3
<PAGE>
The Subordinated Debt Securities will mature on ___________. The
Subordinated Debt Securities are redeemable by Citicorp, in whole or in part,
from time to time, on or after ___________, and earlier in certain circumstances
upon the occurrence of a Tax Event or a Regulatory Capital Event (each as
defined herein). Prior to any such redemption, Citicorp will obtain any required
regulatory approvals. If Citicorp redeems Subordinated Debt Securities, the
Trust must redeem Trust Securities having an aggregate liquidation amount equal
to the aggregate principal amount of the Subordinated Debt Securities so
redeemed at the Redemption Price (as defined herein). See "Description of the
Capital Securities--Redemption." The Capital Securities will be redeemed upon
maturity of the Subordinated Debt Securities. In addition, upon the occurrence
of a Tax Event or a Regulatory Capital Event, unless the Subordinated Debt
Securities are redeemed in the limited circumstances described herein, the Trust
may be dissolved, with the result that the Subordinated Debt Securities will be
distributed to the holders of the Capital Securities in lieu of any cash
distribution. See "Description of the Capital Securities--Tax Event Redemption
or Distribution" and "--Regulatory Capital Event Redemption or Distribution."
In the event of the involuntary or voluntary dissolution of the Trust, the
holders of the Capital Securities will be entitled to receive for each Capital
Security, out of assets of the Trust available therefor, a liquidation amount of
$1,000 plus accrued and unpaid distributions thereon (including interest
thereon) to the date of payment, unless, in connection with such dissolution,
the Subordinated Debt Securities are distributed to the holders of the Capital
Securities. See "Description of the Capital Securities-- Liquidation
Distribution Upon Dissolution."
The Capital Securities will be represented by one or more global
certificates registered in the name of the Depository Trust Company ("DTC") or
its nominee. Beneficial interests in the Capital Securities will be shown on,
and transfers thereof will be effected only through, records maintained by
participants in DTC. Except as described herein, Capital Securities will not be
issued in certificated form. See "Description of the Capital
Securities--Book-Entry Only Issuance--The Depository Trust Company."
- ---------------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER
MARKET OR OTHERWISE. SUCH STABILIZING TRANSACTIONS, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
4
<PAGE>
CAPITALIZATION OF CITICORP
The following table sets forth the consolidated capitalization of Citicorp
as of __________ (and as adjusted to give effect to the issuance of the Capital
Securities).
Outstanding As Adjusted
----------- -----------
(In millions)
Long-Term Debt:
Various Obligations With Original
Maturities of One Year or More
Guaranteed Preferred Beneficial
Interests in Citicorp Subordinated Debt(a)
----------- -----------
Total Long - Term Debt
----------- -----------
Stockholders' Equity:
Preferred Stock
Authorized Shares: 50,000,000
Issued Shares:
_________ of $100 per share, ______ of $250
per share and _______ of $500 per share
Common Stock ($1.00 par value)
Authorized Shares: 800,000,000
Issued Shares:
Surplus
Retained Earnings
Net Unrealized Gains-Securities Available for Sale
Foreign Currency Translation
Common Stock in Treasury, at cost
Shares:
----------- -----------
Total Stockholders' Equity
----------- -----------
Total
- ----------
(a)The Guaranteed Preferred Beneficial Interests represent interests in
Citicorp Capital [ ], a trust whose sole asset[s] [is][are] $___ million
aggregate principal amount of Citicorp's ______% Junior Subordinated Deferrable
Interest Debentures due ____ and, with respect to the "As Adjusted" column,
interests in Citicorp Capital [ ], whose sole asset will be $_____ million
aggregate principal amount of Citicorp's Junior Subordinated Deferrable Interest
Debentures.
5
<PAGE>
SPECIAL CONSIDERATIONS
Prospective purchasers of Capital Securities should carefully review the
information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following matters.
Ranking of Subordinate Obligations Under the Subordinated Debt Securities and
Guarantee
The obligations of Citicorp under the Subordinated Debt Securities are
subordinate and junior in right of payment to all present and future Senior
Indebtedness of Citicorp, including all outstanding subordinated debt securities
issued by Citicorp (other than securities designated as Junior Subordinated
Deferrable Interest Debentures) prior to the issuance of the Subordinated Debt
Securities. Citicorp's obligations under the Guarantee are subordinate and
junior in right of payment to all liabilities of Citicorp and rank pari passu
with the most senior preferred stock issued from time to time, if any, by
Citicorp and with any other guarantee by Citicorp in respect of any preferred
stock or equity interest of any affiliate. There are no terms in the Capital
Securities, the Subordinated Debt Securities or the Guarantee that limit
Citicorp's ability to incur additional indebtedness, including indebtedness that
ranks senior to the Subordinated Debt Securities and the Guarantee. See
"Description of the Capital Securities Guarantees--Status of the Capital
Securities Guarantees" and "Description of the Subordinated Debt Securities" in
the accompanying Prospectus, and "Description of the Subordinated Debt
Securities--Subordination" herein.
Rights Under the Guarantee
If Citicorp were to default on its obligation to pay amounts payable on
the Subordinated Debt Securities or its other payment obligations to the Trust,
the Trust would lack available funds for the payment of distributions or amounts
payable on redemption of the Capital Securities or otherwise, and, in such
event, holders of the Capital Securities would not be able to rely upon the
Guarantee for payment of such amounts. Instead, holders of the Capital
Securities would rely on the enforcement (i) by the Institutional Trustee (as
defined herein) of its rights as registered holder of the Subordinated Debt
Securities against Citicorp pursuant to the terms of the Subordinated Debt
Securities or (ii) by such holder of its right against Citicorp to enforce
payments on the Subordinated Debt Securities. See "Description of the Capital
Securities Guarantees" and "Description of the Subordinated Debt Securities" in
the accompanying Prospectus.
Enforcement of Certain Rights by Holders of Capital Securities
If a Declaration Event of Default (as defined herein) occurs and is
continuing, the holders of Capital Securities would rely on the enforcement by
the Institutional Trustee of its rights as a holder of the Subordinated Debt
Securities against Citicorp. In addition, the holders of a majority in
liquidation amount of the Capital Securities will have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Institutional Trustee or to direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee to exercise the remedies available to
it as a holder of the Subordinated Debt Securities. If the Institutional Trustee
fails to enforce its rights under
6
<PAGE>
the Subordinated Debt Securities, a holder of Capital Securities may institute a
legal proceeding directly against Citicorp to enforce the Institutional
Trustee's rights under the Subordinated Debt Securities without first
instituting any legal proceeding against the Institutional Trustee or any other
person or entity. Notwithstanding the foregoing, if a Declaration Event of
Default has occurred and is continuing and such event is attributable to the
failure of Citicorp to pay interest or principal on the Subordinated Debt
Securities on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), then a holder of Capital
Securities may directly institute a proceeding for enforcement of payment to
such holder of the principal of or interest on the Subordinated Debt Securities
having a principal amount equal to the aggregate liquidation amount of the
Capital Securities of such holder (a "Direct Action") on or after the respective
due date specified in the Subordinated Debt Securities. In connection with such
Direct Action, Citicorp will be subrogated to the rights of such holder of
Capital Securities under the Declaration to the extent of any payment made by
Citicorp to such holder of Capital Securities in such Direct Action. The holders
of Capital Securities will not be able to exercise directly any other remedy
available to the holders of the Subordinated Debt Securities. See "Description
of the Capital Securities -- Declaration Events of Default."
Option to Extend Interest Payment Period; Federal Income Tax Consequences
Citicorp has the right under the Indenture (as such term is defined in
"Description of the Subordinated Debt Securities" herein), so long as no
Indenture Event of Default (as defined herein) shall have occurred and be
continuing, to defer payments of interest on the Subordinated Debt Securities by
extending the interest payment period at any time, and from time to time, on the
Subordinated Debt Securities. As a consequence of such an extension, semiannual
distributions on the Capital Securities would be deferred (but would continue to
accrue, despite such deferral, with interest thereon compounded semiannually) by
the Trust during any such extended interest payment period. Such right to extend
the interest payment period for the Subordinated Debt Securities is limited to a
period not exceeding 10 consecutive semiannual interest periods. Prior to the
termination of any such extension period, Citicorp may further extend the
interest payment period; provided that such Extension Period, together with all
such previous and further extensions thereof, may not exceed 10 consecutive
semiannual interest periods or extend beyond the maturity of the Subordinated
Debt Securities. Upon the termination of any Extension Period and the payment of
all amounts then due, Citicorp may commence a new Extension Period, subject to
the above requirements. See "Description of the Capital Securities --
Distributions" and "Description of the Subordinated Debt Securities -- Option to
Extend Interest Payment Period."
Should Citicorp exercise its right to defer payments of interest by
extending the interest payment period, each holder of Capital Securities will be
required to accrue income (as original issue discount ("OID")) in respect of the
deferred interest allocable to its Capital Securities for United States federal
income tax purposes, even though such deferred interest is not distributed to
holders of Capital Securities. As a result, each such holder of Capital
Securities will recognize income for United States federal income tax purposes
in advance of the receipt of cash and will not receive the cash from the Trust
related to such income if such holder disposes of the Capital Securities prior
to the record date for the date on which distributions of such amounts are made.
Citicorp has no current intention of exercising its right to defer payments of
interest by extending the interest payment
7
<PAGE>
period on the Subordinated Debt Securities. However, should Citicorp determine
to exercise such right in the future, the market price of the Capital Securities
is likely to be affected. A holder that disposes of its Capital Securities
during an Extension Period, therefore, might not receive the same return on its
investment as a holder that continues to hold its Capital Securities. In
addition, as a result of the existence of Citicorp's right to defer interest
payments, the market price of the Capital Securities (which represent an
undivided beneficial interest in the Subordinated Debt Securities) may be more
volatile than other securities that do not grant such rights to the issuer. See
"United States Federal Income Taxation -- Interest and Original Issue Discount."
Tax Event or Regulatory Capital Event Redemption or Distribution
Upon the occurrence of a Tax Event or a Regulatory Capital Event, the
Trust may be dissolved, with the result that the Subordinated Debt Securities
would be distributed to the holders of the Trust Securities in connection with
the liquidation of the Trust. In certain circumstances, Citicorp will have the
right to redeem the Subordinated Debt Securities in lieu of a distribution of
the Subordinated Debt Securities by the Trust. If Subordinated Debt Securities
are redeemed, the Trust will redeem an equivalent amount of Trust Securities.
See "Description of the Capital Securities -- Tax Event Redemption or
Distribution" and "--Regulatory Capital Event Redemption or Distribution."
Under current United States federal income tax law, a distribution of
Subordinated Debt Securities upon the dissolution of the Trust would not be a
taxable event to holders of the Capital Securities, but a dissolution of the
Trust in which holders of the Capital Securities receive cash would be a taxable
event to such holders. See "United States Federal Income Taxation -- Receipt of
Subordinated Debt Securities or Cash Upon Liquidation of the Trust."
Because holders of Capital Securities may receive Subordinated Debt
Securities upon the occurrence of a Tax Event or a Regulatory Capital Event,
prospective purchasers of Capital Securities are also making an investment
decision with regard to the Subordinated Debt Securities and should carefully
review all the information regarding the Subordinated Debt Securities contained
herein and in the accompanying Prospectus. See "Description of the Capital
Securities -- Tax Event Redemption or Distribution" and "--Regulatory Capital
Event Redemption or Distribution" and "Description of the Subordinated Debt
Securities."
Possible Tax Consequences of Sales of Capital Securities Between Record Dates
The Capital Securities may trade at a price that does not fully reflect
the value of any accrued but unpaid interest with respect to the underlying
Subordinated Debt Securities. If Citicorp exercises its right to defer payments
of interest, a holder that disposes of Capital Securities between record dates
for payments of distributions thereon will be required to include any accrued
but unpaid interest on the Subordinated Debt Securities through the date of
disposition in income as ordinary income and add such amount to the holder's
adjusted tax basis in the pro rata share of the underlying Subordinated Debt
Securities deemed disposed of. To the extent the selling price is less than the
holder's adjusted tax basis (which will include all accrued but unpaid
interest), a holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to
8
<PAGE>
offset ordinary income for United States federal income tax purposes. See
"United States Federal Income Taxation -- Interest and Original Issue Discount"
and "-- Sales of Capital Securities."
ACCOUNTING TREATMENT
The financial statements of the Trust will be consolidated with Citicorp's
financial statements, with the $___ million of Capital Securities included in
Citicorp's balance sheet as a component of Long-Term Debt. The sole assets of
the Trust will be $___ million aggregate principal amount of _____% Junior
Subordinated Deferrable Interest Debentures of Citicorp due ____.
All future reports of Citicorp filed under the Securities Exchange Act of
1934 will (i) reflect the consolidation of the Trust into Citicorp's
consolidated financial statements, with the $___ million of Capital Securities
included in Citicorp's balance sheet as a component of Long-Term Debt, (ii)
include in the financial statement footnotes of Citicorp disclosure that the
sole assets of the wholly-owned Trust will be $___ million principal amount of
____% Junior Subordinated Deferrable Interest Debentures of Citicorp due ____,
and (iii) include in a footnote to the audited financial statements disclosure
that each Citicorp Capital Trust is wholly owned, that the sole asset of each
Citicorp Capital Trust is the respective series of Junior Subordinated
Deferrable Interest Debentures (specifying as to each Trust the principal
amount, interest rate and maturity date of such Junior Subordinated Deferrable
Interest Debentures), and that the related Preferred Securities Guarantee, taken
together with Citicorp's obligations under such Junior Subordinated Deferrable
Interest Debentures, the Indenture and the Declaration, provides a full and
unconditional guarantee on a subordinated basis by Citicorp of payments due on
the preferred securities issued by each Citicorp Capital Trust.
THE TRUST
The Trust is a statutory business trust formed under Delaware law pursuant
to a declaration of trust executed by Citicorp, as sponsor (the "Sponsor"), and
the trustees of the Trust (the "Trustees") and the filing of a certificate of
trust with the Secretary of State of the State of Delaware. Such declaration
will be amended and restated in its entirety (as so amended and restated, the
"Declaration") before the issuance of the Capital Securities. The Declaration
will be qualified as an indenture under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). Upon issuance of the Capital Securities,
the purchasers thereof will own all of the Capital Securities. See "Description
of the Capital Securities -- Book-Entry Only Issuance -- The Depository Trust
Company." Citicorp will directly or indirectly acquire all of the Common
Securities, which will have an aggregate liquidation amount equal to
approximately 3 percent of the total capital of the Trust. The Trust exists for
the exclusive purposes of issuing the Trust Securities representing undivided
beneficial interests in the assets of the Trust, investing the gross proceeds of
the Trust Securities in the Subordinated Debt Securities and engaging in only
those other activities necessary or incidental thereto.
Pursuant to the Declaration, the number of Trustees will initially be
three. Two of the trustees (the "Regular Trustees") will be persons who are
employees or officers of, or who are affiliated with, Citicorp. The third
trustee, which will be a financial institution that is unaffiliated with
Citicorp, will
9
<PAGE>
serve as institutional trustee under the Declaration and as indenture trustee
for the purposes of compliance with the provisions of the Trust Indenture Act
(the "Institutional Trustee"). Initially, Wilmington Trust Company will be the
Institutional Trustee until removed or replaced by the holder of the Common
Securities. For purposes of compliance with the provisions of the Trust
Indenture Act, Wilmington Trust Company will also act as trustee (the "Guarantee
Trustee") under the Guarantee and as Debt Trustee (as defined herein) under the
Indenture. Wilmington Trust Company will also act as Delaware Trustee under the
Declaration for purposes of compliance with the Delaware Business Trust Act (the
"Trust Act").
The Institutional Trustee will hold title to the Subordinated Debt
Securities for the benefit of the holders of the Trust Securities and the
Institutional Trustee will have the power to exercise all rights, powers and
privileges under the Indenture (as defined herein) as the holder of the
Subordinated Debt Securities. In addition, the Institutional Trustee will
maintain exclusive control of a segregated non-interest bearing bank account
(the "Property Account") to hold all payments made in respect of the
Subordinated Debt Securities for the benefit of the holders of the Trust
Securities. The Institutional Trustee will make payments of distributions and
payments on liquidation, redemption and otherwise to the holders of the Trust
Securities out of funds from the Property Account. The Guarantee Trustee will
hold the Guarantee for the benefit of the holders of the Capital Securities.
Citicorp, as the direct or indirect holder of all the Common Securities, will
have the right to appoint, remove or replace any Trustee and to increase or
decrease the number of Trustees, subject to certain restrictions. Citicorp will
pay all fees and expenses related to the Trust and the offering of the Trust
Securities. See "Description of the Subordinated Debt Securities --
Miscellaneous."
The rights of the holders of the Capital Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Trust Act and the Trust Indenture Act. See "Description of the
Capital Securities."
DESCRIPTION OF THE CAPITAL SECURITIES
The following summary of certain terms and provisions of the Capital
Securities supplements the description of the terms and provisions of the
Capital Securities set forth in the accompanying Prospectus under the heading
"Description of the Capital Securities," to which description reference is
hereby made. The Capital Securities will be issued pursuant to the terms of the
Declaration, which has been qualified as an indenture under the Trust Indenture
Act. The Institutional Trustee will act as indenture trustee for the Capital
Securities under the Declaration for purposes of compliance with the provisions
of the Trust Indenture Act. The terms of the Capital Securities will include
those stated in the Declaration and those made part of the Declaration by the
Trust Indenture Act. The following summary of the material terms and provisions
of the Capital Securities does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Declaration, the Trust Act and
the Trust Indenture Act.
General
The Declaration authorizes the Regular Trustees to issue on behalf of the
Trust the Trust Securities, which represent undivided beneficial interests in
the assets of the Trust. All of the
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<PAGE>
Common Securities will be owned, directly or indirectly, by Citicorp. The Common
Securities rank pari passu, and payments will be made thereon on a pro rata
basis, with the Capital Securities, except that upon the occurrence and during
the continuance of a Declaration Event of Default, the rights of the holders of
the Common Securities to receive payment of periodic distributions and payments
upon liquidation, redemption and otherwise will be subordinated to the rights of
the holders of the Capital Securities. The Declaration does not permit the
issuance by the Trust of any securities other than the Trust Securities or the
incurrence of any indebtedness by the Trust. Pursuant to the Declaration, the
Institutional Trustee will own the Subordinated Debt Securities purchased by the
Trust for the benefit of the holders of the Trust Securities. The payment of
distributions out of money held by the Trust, and payments upon redemption of
the Capital Securities or liquidation of the Trust, are guaranteed by Citicorp
to the extent described under "Description of the Guarantee" and under
"Description of the Capital Securities Guarantees" in the accompanying
Prospectus. The Guarantee will be held by the Guarantee Trustee for the benefit
of the holders of the Capital Securities. The Guarantee does not cover payment
of distributions when the Trust does not have sufficient available funds to pay
such distributions. In such event, the remedy of a holder of Capital Securities
is to vote to direct the Institutional Trustee to enforce the Institutional
Trustee's rights under the Subordinated Debt Securities except in the limited
circumstances in which the holder may take Direct Action. See "-- Voting Rights"
and "-- Declaration Events of Default." Citicorp's obligations under the
Guarantee, taken together with its obligations under the Subordinated Debt
Securities, the Indenture and the Declaration, will provide a full and
unconditional guarantee on a subordinated basis by Citicorp of payments due on
the Capital Securities.
Distributions
Distributions on the Capital Securities will be fixed at a rate per annum
of _____% of the stated liquidation amount of $1,000 per Capital Security.
Distributions in arrears for more than one semiannual period will bear interest
thereon at the rate per annum of _____%, compounded semiannually. The term
"distribution" as used herein includes any such interest payable unless
otherwise stated. The amount of distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months.
Distributions on the Capital Securities will be cumulative, will accrue
from ________ and will be payable semiannually in arrears on ______ and _______
of each year, commencing ________, when, as and if available for payment.
Distributions will be made by the Institutional Trustee or its paying agent,
except as otherwise described below.
Citicorp has the right under the Indenture to defer payments of interest
on the Subordinated Debt Securities by extending the interest payment period
from time to time on the Subordinated Debt Securities. If Citicorp were to
exercise such right, semiannual distributions on the Capital Securities during
any such extended interest payment period would be deferred (though such
distributions would continue to accrue with interest, compounded semiannually,
because compound interest would continue to accrue on the Subordinated Debt
Securities). See "Description of the Subordinated Debt Securities -- Interest"
and "-- Option to Extend Interest Payment Period." If distributions are
deferred, the deferred distributions and accrued interest thereon shall be paid
to holders of record of
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<PAGE>
the Capital Securities as they appear on the books and records of the Trust on
the record date next following the termination of such deferral period.
Distributions on the Capital Securities must be paid on the dates payable
to the extent that the Trust has funds available for the payment of such
distributions in the Property Account. The Trust's funds available for
distribution to the holders of the Capital Securities will be limited to
payments received from Citicorp on the Subordinated Debt Securities. See
"Description of the Subordinated Debt Securities." The payment of distributions
out of moneys held by the Trust is guaranteed by Citicorp to the extent set
forth under "Description of the Guarantee" and under "Description of the Capital
Securities Guarantees" in the accompanying Prospectus.
Distributions on the Capital Securities will be payable to the holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which, as long as the Capital Securities remain in book-entry only
form, will be one Business Day (as defined herein) prior to the relevant payment
dates. Such distributions will be paid by or on behalf of the Institutional
Trustee, which will hold amounts received in respect of the Subordinated Debt
Securities in the Property Account for the benefit of the holders of the Trust
Securities. Subject to any applicable laws and regulations and the provisions of
the Declaration, each such payment will be made as described under"-- Book-Entry
Only Issuance -- The Depository Trust Company" below. In the event that the
Capital Securities do not continue to remain in book-entry only form, the
Regular Trustees will have the right to select relevant record dates, which may
be more than one Business Day but not more than ten Business Days prior to the
relevant payment dates. In the event that any date on which distributions are to
be made on the Capital Securities is not a Business Day, then payment of the
distributions payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay). A "Business Day" shall mean any day other than Saturday, Sunday or
any other day on which banking institutions in New York City are permitted or
required by any applicable law to close.
Redemption
Upon the repayment of the Subordinated Debt Securities, whether at
maturity or upon redemption, the proceeds from such repayment or redemption will
simultaneously be applied to redeem, at the Redemption Price, Trust Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Subordinated Debt Securities so repaid or redeemed; provided that holders
of Trust Securities shall be given not less than 30 nor more than 60 days'
notice of any redemption.
The Company has the right to redeem the Subordinated Debt Securities, in
whole or in part, at any time on or after __________, and earlier if a Tax Event
or a Regulatory Capital Event shall have occurred and be continuing. The
"Redemption Price" for the Capital Securities, in the case of any such
redemption, will equal the applicable Redemption Percentage (determined as
described below) of the stated liquidation amount of $1,000 per Capital
Security, plus accrued distributions to but excluding the date fixed for
redemption.
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The Redemption Percentage, in the case of any redemption occurring on or
after _______ and before _________, will equal the applicable percentage set out
in the following table if the redemption date occurs during the 12-month period
beginning in the year indicated:
Year Redemption Percentage
---- ---------------------
The Redemption Percentage will be 100% for any redemption on or after
____________.
In the case of a redemption following a Tax Event or Regulatory Capital
Event prior to ________, the Redemption Percentage will equal the Make-Whole
Amount, determined as a percentage of a corresponding $1,000 principal amount of
Subordinated Debt Securities. The "Make-Whole Amount" shall be equal to the
greater of (i) 100% of the principal amount of such Subordinated Debt Securities
or (ii) as determined by a Quotation Agent (as defined below), an amount equal
to the sum of the present values of the remaining scheduled payments of
principal, premium and interest thereon through _________ (assuming that the
Subordinated Debt Securities would have been redeemed on that date), discounted
to the redemption date on a semiannual basis (assuming a 360-day year of twelve
30-day months) at the Adjusted Treasury Rate.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to (x) the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date plus (y) (i) on or prior to _______ ,
___%, and (ii) after __________, ____%.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term through _________ of the Subordinated Debt Securities that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term through _________ of the Subordinated Debt
Securities.
"Quotation Agent" means Citibank, N.A. and its successors; provided,
however, that if such entity shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the Company
shall substitute therefor another Primary Treasury Dealer. "Reference Treasury
Dealer" means (i) the Quotation Agent and (ii) any other Primary Treasury Dealer
selected by the Debt Trustee after consultation with the Company.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such redemption date, as set forth in the most recent
weekly statistical release (or any successor release) published by the Federal
Reserve
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and designated "H.15(519)" or (ii) if such release (or any successor release) is
not published or does not contain such prices during the week preceding such
Business Day, (A) the average of the Reference Treasury Dealer Quotations for
such redemption date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Debt Trustee obtains fewer than three
such Reference Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Debt Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) quoted in writing to the
Indenture Trustee by such Reference Treasury Dealer as of 5:00 p.m., New York
time, on the third Business Day preceding such redemption date.
Tax Event Redemption or Distribution
"Tax Event" means that the Regular Trustees shall have received an opinion
(a "Dissolution Tax Opinion") of a nationally recognized independent tax counsel
experienced in such matters ("Tax Counsel") to the effect that, as a result of
(a) any amendment to, clarification of or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein or
(b) any amendment to, clarification of or change in an interpretation or
application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority (including the enactment of any
legislation and the publication of any judicial decision or regulatory
determination on or after such date), there is more than an insubstantial risk
that (i) the Trust would be subject to United States federal income tax with
respect to income accrued or received on the Subordinated Debt Securities, (ii)
interest payable to the Trust on the Subordinated Debt Securities would not be
deductible by Citicorp for United States federal income tax purposes or (iii)
the Trust would be subject to more than a de minimis amount of other taxes,
duties or other governmental charges, provided that any such change,
clarification or amendment becomes effective on or after the date of this
Prospectus Supplement.
If a Tax Event shall occur and be continuing, Citicorp may cause the Trust
to be dissolved, with the result that after satisfaction of liabilities to
creditors, if any, Subordinated Debt Securities with an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the distribution rate of, and accrued and unpaid interest
equal to accrued and unpaid distributions on, the Trust Securities, would be
distributed to the holders of the Trust Securities in liquidation of such
holders' interests in the Trust on a pro rata basis within 90 days following the
occurrence of such Tax Event; provided that such dissolution and distribution
shall be conditioned on (i) the Regular Trustees' receipt of an opinion of Tax
Counsel (a "No Recognition Opinion"), which opinion may rely on published
revenue rulings of the Internal Revenue Service, to the effect that the holders
of the Trust Securities will not recognize any gain or loss for United States
federal income tax purposes as a result of such dissolution and distribution of
Subordinated Debt Securities and (ii) Citicorp being unable to avoid such Tax
Event within such 90-day period by taking some ministerial action or pursuing
some other reasonable measure that will have no adverse effect on the Trust,
Citicorp or the holders of the Trust Securities. Furthermore, if after receipt
of a Dissolution Tax Opinion by the Regular Trustees (i) Citicorp has received
an opinion
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(a "Redemption Tax Opinion") of Tax Counsel that, as a result of a Tax Event,
there is more than an insubstantial risk that Citicorp would be precluded from
deducting the interest on the Subordinated Debt Securities for United States
federal income tax purposes, even after the Subordinated Debt Securities were
distributed to the holders of Trust Securities in liquidation of such holders'
interests in the Trust as described above, or (ii) the Regular Trustees shall
have been informed by such Tax Counsel that it cannot deliver a No Recognition
Opinion to the Trust, Citicorp shall have the right, within 90 days following
the occurrence of such Tax Event, to redeem the Subordinated Debt Securities, in
whole or in part, upon not less than 30 nor more than 60 days' notice, for cash,
with the result that, following such redemption, the Trust Securities having an
aggregate liquidation amount equal to the principal amount of the Subordinated
Debt Securities so redeemed will be redeemed by the Trust at the Redemption
Price; provided, however, that if at the time there is available to Citicorp or
the Trust the opportunity to eliminate, within such 90-day period, the Tax Event
by taking some ministerial action, such as filing a form or making an election
or pursuing some other similar reasonable measure that has no adverse effect on
the Trust, Citicorp or the holders of the Trust Securities, then Citicorp or the
Trust will pursue such measure in lieu of redemption of the Subordinated Debt
Securities.
In the event a Tax Event in respect of the Capital Securities has occurred
and is continuing and Citicorp does not (i) redeem all of the Subordinated Debt
Securities and thereby cause a mandatory redemption of such Capital Securities
as described above or (ii) cause the Trust to be dissolved and cause the
Subordinated Debt Securities to be distributed in liquidation thereof as
described above, some or all of the Capital Securities will remain outstanding
and Additional Interest (as defined herein) may be payable on the Subordinated
Debt Securities.
Regulatory Capital Event Redemption or Distribution
"Regulatory Capital Event" means a determination by Citicorp, based on an
opinion of counsel experienced in such matters (who may be an employee of
Citicorp or any of its affiliates), that, as a result of (a) any amendment to,
clarification of or change (including any announced prospective change) in
applicable laws or regulations or official interpretations thereof or policies
with respect thereto or (b) any official administrative pronouncement or
judicial decision interpreting or applying such laws or regulations, which
amendment, clarification, change, pronouncement or decision is announced or is
effective after the date of this Prospectus Supplement, there is more than an
insubstantial risk that the Capital Securities will no longer constitute Tier 1
capital of Citicorp (or its equivalent) for purposes of the capital adequacy
guidelines or policies of the Board of Governors of the Federal Reserve System
or its successor as Citicorp's primary federal banking regulator.
If, at any time prior to __________, a Regulatory Capital Event shall
occur and be continuing, Citicorp may (i) cause the Trust to be dissolved, with
the result that after satisfaction of liabilities to creditors, if any,
Subordinated Debt Securities with an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
distribution rate of, and accrued and unpaid interest equal to accrued and
unpaid distributions on, the Trust Securities, would be distributed to the
holders of the Trust Securities in liquidation of such holders' interests in the
Trust on a pro rata basis within 90 days following the occurrence of such
Regulatory Capital Event or (ii) within 90 days following the occurrence of such
Regulatory Capital Event, redeem the
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Subordinated Debt Securities, in whole or in part, upon not less than 30 nor
more than 60 days' notice, for cash, with the result that, following such
redemption, the Capital Securities will be redeemed by the Trust at the
applicable Redemption Price; provided, however, that if at the time there is
available to Citicorp or the Trust the opportunity to eliminate, within such
90-day period, the Regulatory Capital Event by taking some ministerial action,
such as filing a form or making an election or pursuing some other similar
reasonable measure that has no adverse effect on the Trust, Citicorp or the
holders of the Trust Securities, then Citicorp or the Trust will pursue such
measure in lieu of distribution or redemption of the Subordinated Debt
Securities.
Distribution of Subordinated Debt Securities
After the date for any distribution of Subordinated Debt Securities upon
dissolution of the Trust, (i) the Capital Securities will no longer be deemed to
be outstanding, (ii) the Depositary (as defined herein) or its nominee, as the
record holder of the Capital Securities, will receive a registered global
certificate or certificates representing the Subordinated Debt Securities to be
delivered upon such distribution and (iii) any certificates representing Capital
Securities not held by the Depositary or its nominee will be deemed to represent
Subordinated Debt Securities having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
distribution rate of, and accrued and unpaid interest equal to accrued and
unpaid distributions on such Capital Securities until such certificates are
presented to Citicorp or its agent for transfer or reissuance.
Redemption Procedures
The Trust may not redeem fewer than all of the outstanding Capital
Securities unless all accrued and unpaid distributions have been paid on all
Capital Securities for all semiannual distribution periods terminating on or
prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Capital Securities
(which notice will be irrevocable), then, by noon, New York City time, on the
redemption date, provided that Citicorp has paid to the Institutional Trustee a
sufficient amount of cash in connection with the related redemption or maturity
of the Subordinated Debt Securities, the Trust will irrevocably deposit with the
Depositary funds sufficient to pay the applicable Redemption Price and will give
the Depositary irrevocable instructions and authority to pay the Redemption
Price to the holders of the Capital Securities. See "-- Book-Entry Only Issuance
- -- The Depository Trust Company." If notice of redemption shall have been given
and funds deposited as required, then, immediately prior to the close of
business on the date of such deposit, distributions will cease to accrue and all
rights of holders of such Capital Securities so called for redemption will
cease, except the right of the holders of such Capital Securities to receive the
Redemption Price (but without interest) on or after such redemption date, except
as described below. In the event that any date fixed for redemption of Capital
Securities is not a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day that is a Business Day
(without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day. In the event that payment of the
Redemption Price in respect of Capital Securities is improperly withheld or
refused
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and not paid, either by the Trust or by Citicorp pursuant to the Guarantee,
distributions on such Capital Securities will continue to accrue at the then
applicable rate from the original redemption date to the date of payment, in
which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
In the event that fewer than all of the outstanding Capital Securities are
to be redeemed, the Capital Securities will be redeemed as described below under
"-- Book-Entry Only Issuance -- The Depository Trust Company."
Subject to the foregoing, applicable law (including, without limitation,
United States federal securities laws), and any other applicable restrictions,
Citicorp or its subsidiaries may at any time, and from time to time, purchase
outstanding Capital Securities by tender, in the open market or by private
agreement.
Liquidation Distribution Upon Dissolution
In the event of any voluntary or involuntary dissolution of the Trust
(each a "Liquidation"), the then holders of the Trust Securities will be
entitled to receive out of the assets of the Trust, after satisfaction of
liabilities to creditors, distributions in an amount equal to the aggregate of
the stated liquidation amount of $1,000 per Trust Security plus accrued and
unpaid distributions thereon to the date of payment (the "Liquidation
Distribution"), unless, in connection with such Liquidation, Subordinated Debt
Securities in an aggregate stated principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the distribution rate
of, and accrued and unpaid interest equal to accrued and unpaid distributions
on, the Trust Securities have been distributed on a pro rata basis to the
holders of the Trust Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Trust Securities shall be paid on a pro rata basis. The holders of
the Common Securities will be entitled to receive distributions upon any such
dissolution pro rata with the holders of the Capital Securities, except that if
a Declaration Event of Default has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities with regard to
such distributions.
Pursuant to the Declaration, the Trust shall dissolve (i) on February 15,
2052, the expiration of the term of the Trust, (ii) upon the bankruptcy of
Citicorp, (iii) upon the filing of a certificate of dissolution or its
equivalent with respect to Citicorp, the consent of the holders of at least a
majority in liquidation amount of the Trust Securities affected thereby voting
together as a single class to file a certificate of cancellation with respect to
the Trust or the revocation of the charter of Citicorp and the expiration of 90
days after the date of revocation without a reinstatement thereof, (iv) upon the
occurrence of a Tax Event or a Regulatory Capital Event at the direction of
Citicorp in accordance with the provisions of this Prospectus Supplement, (v)
upon the entry of a decree of a judicial dissolution of Citicorp (or an
affiliate that is a subsequent holder of the Common Securities) or the Trust or
(vi) upon the redemption of all the Trust Securities. Pursuant to the
Declaration, as soon as
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practicable after the dissolution of the Trust and upon completion of the
winding up of the Trust, the Trust shall terminate upon the filing of a
certificate of cancellation.
Declaration Events of Default
An Event of Default under the Indenture (an "Indenture Event of Default")
constitutes an event of default under the Declaration with respect to the Trust
Securities (a "Declaration Event of Default"); provided that pursuant to the
Declaration, the holder of the Common Securities will be deemed to have waived
any Declaration Event of Default with respect to the Common Securities until all
Declaration Events of Default with respect to the Capital Securities have been
cured, waived or otherwise eliminated. Until such Declaration Events of Default
with respect to the Capital Securities have been so cured, waived, or otherwise
eliminated, the Institutional Trustee will be deemed to be acting solely on
behalf of the holders of the Capital Securities and only the holders of the
Capital Securities will have the right to direct the Institutional Trustee with
respect to certain matters under the Declaration, and therefore the Indenture.
If the Institutional Trustee fails to enforce its rights under the Subordinated
Debt Securities after a holder of Capital Securities has made a written request,
such holder of record of Capital Securities may institute a legal proceeding
against Citicorp to enforce the Institutional Trustee's rights under the
Subordinated Debt Securities without first instituting any legal proceeding
against the Institutional Trustee or any other person or entity. Notwithstanding
the foregoing, if a Declaration Event of Default has occurred and is continuing
and such event is attributable to the failure of Citicorp to pay interest or
principal on the Subordinated Debt Securities on the date such interest or
principal is otherwise payable (or in the case of redemption, the redemption
date), then a holder of Capital Securities may directly institute a proceeding
for enforcement of payment to such holder directly of the principal of or
interest on the Subordinated Debt Securities having a principal amount equal to
the aggregate liquidation amount of the Capital Securities of such holder on or
after the respective due date specified in the Subordinated Debt Securities. In
connection with such Direct Action, Citicorp will be subrogated to the rights of
such holder of Capital Securities under the Declaration to the extent of any
payment made by Citicorp to such holder of Capital Securities in such Direct
Action. The holders of Capital Securities will not be able to exercise directly
any other remedy available to the holders of the Subordinated Debt Securities.
Citicorp and the Trust are each required to file annually with the
Institutional Trustee an officer's certificate as to its compliance with all
conditions and covenants under the Declaration.
Voting Rights
Except as described herein, under the Trust Act, the Trust Indenture Act
and under "Description of the Capital Securities Guarantees -- Modification of
the Capital Securities Guarantees; Assignment" in the accompanying Prospectus,
and as otherwise required by law and the Declaration, the holders of the Capital
Securities will have no voting rights.
Subject to the requirement of the Institutional Trustee obtaining a tax
opinion in certain circumstances set forth in the last sentence of this
paragraph, the holders of a majority in aggregate liquidation amount of the
Capital Securities have the right to direct the time, method and place of
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conducting any proceeding for any remedy available to the Institutional Trustee,
or direct the exercise of any trust or power conferred upon the Institutional
Trustee under the Declaration including the right to direct the Institutional
Trustee, as holder of the Subordinated Debt Securities, to (i) exercise the
remedies available to it under the Indenture as a holder of the Subordinated
Debt Securities, (ii) waive any past default that is waivable under the
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the Subordinated Debt Securities shall be due and payable or
(iv) consent to any amendment, modification or termination of the Indenture or
the Subordinated Debt Securities where such consent shall be required; provided,
however, that, where a consent or action under the Indenture would require the
consent or act of holders of more than a majority in principal amount of the
Subordinated Debt Securities (a "Super-Majority") affected thereby, only the
holders of at least a percentage equivalent to such Super-Majority in aggregate
liquidation amount of the Capital Securities may direct the Institutional
Trustee to give such consent or take such action. The Institutional Trustee
shall notify all holders of the Capital Securities of any notice of default
received from the Debt Trustee with respect to the Subordinated Debt Securities.
Such notice shall state that such Indenture Event of Default also constitutes a
Declaration Event of Default. Except with respect to directing the time, method
and place of conducting a proceeding for a remedy, the Institutional Trustee
shall not take any of the actions described in clauses (i), (ii), (iii) or (iv)
above unless the Institutional Trustee has obtained an opinion of tax counsel to
the effect that, as a result of such action, the Trust will not fail to be
classified as a grantor trust for United States federal income tax purposes.
In the event the consent of the Institutional Trustee, as the holder of
the Subordinated Debt Securities, is required under the Indenture with respect
to any amendment, modification or termination of the Indenture, the
Institutional Trustee shall request the direction of the holders of the Trust
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a majority in liquidation amount of the Trust Securities voting together as a
single class; provided, however, that (i) where the taking of any such action
under the Indenture would require the consent of a Super-Majority, the
Institutional Trustee may only give such consent at the direction of the holders
of at least the proportion in liquidation amount of the Trust Securities which
the relevant Super-Majority represents of the aggregate principal amount of the
Subordinated Debt Securities outstanding and (ii) where the taking of such
action would require the consent of every holder of Subordinated Debt
Securities, the consent of all holders of Trust Securities shall be required.
The Institutional Trustee shall not take any such action in accordance with the
directions of the holders of the Trust Securities unless the Institutional
Trustee has obtained an opinion of 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.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Capital Securities may be
given at a separate meeting of holders of Capital Securities convened for such
purpose, at a meeting of all of the holders of Trust Securities or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which holders of Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be mailed to
each holder of record of
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Capital Securities. Each such notice will include a statement setting forth the
following information: (i) the date of such meeting or the date by which such
action is to be taken; (ii) a description of any resolution proposed for
adoption at such meeting on which such holders are entitled to vote or of such
matter upon which written consent is sought; and (iii) instructions for the
delivery of proxies or consents. No vote or consent of the holders of Capital
Securities will be required for the Trust to redeem and cancel Capital
Securities or distribute Subordinated Debt Securities in accordance with the
Declaration.
Notwithstanding that holders of Capital Securities are entitled to vote or
consent under any of the circumstances described above, any of the Capital
Securities that are owned at such time by Citicorp or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, Citicorp, shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if such Capital Securities were
not outstanding, unless all of the Capital Securities are owned by Citicorp or
any such entity.
The procedures by which holders of Capital Securities may exercise
their voting rights are described below. See "-- Book-Entry Only Issuance -- The
Depository Trust Company" below.
Holders of the Capital Securities will have no rights to appoint or remove
the Trustees, who may be appointed, removed or replaced solely by Citicorp as
the indirect or direct holder of all of the Common Securities.
Modification of the Declaration
The Declaration may be modified and amended if approved by the Regular
Trustees (and in certain circumstances the Institutional Trustee), subject to
certain conditions, provided that, if any proposed amendment provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Trust
Securities, whether by way of amendment to the Declaration or otherwise or (ii)
the dissolution, winding-up or termination of the Trust other than pursuant to
the terms of the Declaration, then the holders of the outstanding Trust
Securities voting together as a single 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 at least a majority in liquidation amount of the
Trust Securities affected thereby; provided that, if any amendment or proposal
referred to in clause (i) above would adversely affect only the Capital
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 majority in liquidation
amount of such class.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified for purposes of United States federal income taxation as other
than a grantor trust, (ii) reduce or otherwise adversely affect the powers of
the Institutional Trustee in contravention of the Trust Indenture Act or (iii)
cause the Trust to be deemed an "investment company" which is required to be
registered under the Investment Company Act of 1940, as amended (the "1940
Act").
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Mergers, Consolidations or Amalgamations
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body, except as
described below. The Trust may, with the consent of the Regular Trustees and
without the consent of the holders of the Trust Securities or the Institutional
Trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State of the United States; provided,
that (i) if the Trust is not the survivor such successor entity either (x)
expressly assumes all of the obligations of the Trust under the Trust Securities
or (y) substitutes for the Trust Securities other securities having
substantially the same terms as the Trust Securities (the "Successor
Securities"), so long as the Successor Securities rank the same as the Common
Securities and Capital Securities, respectively, rank with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii)
Citicorp expressly acknowledges a trustee of such successor entity possessing
the same powers and duties as the Institutional Trustee as the holder of the
Subordinated Debt Securities, (iii) the Capital Securities or any Successor
Securities are listed quoted, or any Successor Securities will be so upon
notification of issuance, on any national securities exchange or other
organization on which the Capital Securities are then listed or quoted, (iv)
such merger, consolidation, amalgamation or replacement does not cause the
Capital Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation or replacement does not adversely affect the rights,
preferences and privileges of the holders of the Trust Securities (including any
Successor Securities) in any material respect (other than with respect to any
dilution of the holders' interest in the new entity), (vi) such successor entity
has a purpose identical to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation or replacement, Citicorp has received an opinion of
counsel to the Trust to the effect that (A) such merger, consolidation,
amalgamation or replacement does not adversely affect the rights, preferences
and privileges of the holders of the Trust Securities (including any Successor
Securities) in any material respect (other than with respect to any dilution of
the holders' interest in the new entity), (B) following such merger,
consolidation, amalgamation or replacement, neither the Trust nor such successor
entity will be required to register as an investment company under the 1940 Act
and (C) the Trust or successor entity will continue to be classified as a
grantor trust for United States federal income tax purposes and (viii) Citicorp
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee and the Common
Securities Guarantee. Notwithstanding the foregoing, the Trust shall not, except
with the consent of holders of 100 percent in liquidation amount of the Trust
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it, if such consolidation, amalgamation, merger or
replacement would cause the Trust or the successor entity to be classified as
other than a grantor trust for United States federal income tax purposes.
Book-Entry Only Issuance -- The Depository Trust Company
The Depository Trust Company ("DTC") will act as securities depositary
(the "Depositary") for the Capital Securities. The Capital Securities will be
issued only as fully-registered securities registered in the name of Cede & Co.
(DTC's nominee). One or more fully-registered global Capital
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Securities certificates ("Global Certificates"), representing the total
aggregate number of Capital Securities, will be issued and will be deposited
with DTC.
The laws of some jurisdictions may require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in securities
represented by a global certificate deposited with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Participants in DTC include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. DTC is owned by a number of its Participants and by the New
York Stock Exchange, the American Stock Exchange and the National Association of
Securities Dealers. Access to the DTC system is also available to others, such
as securities brokers and dealers, banks and trust companies that clear
transactions through or maintain a direct or indirect custodial relationship
with a Direct Participant either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Securities and Exchange Commission.
Purchases of Capital Securities within the DTC system must be made by or
through Participants, which will receive a credit for the Capital Securities on
DTC's records. The ownership interest of each actual purchaser of each Capital
Security ("Beneficial Owner") is in turn to be recorded on the Participants' and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchases, but Beneficial Owners are expected to
receive written confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the Direct or Indirect Participants
through which the Beneficial Owners purchased Capital Securities. Transfers of
ownership interests in the Capital Securities are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in the Capital Securities, except in the event that use of the
book-entry system for the Capital Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Capital
Securities. DTC's records reflect only the identity of the Direct Participants
to whose accounts such Capital Securities are credited, which may or may not be
the Beneficial Owners. The Participants and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
So long as DTC, or its nominee, is the registered owner or holder of a
Global Certificate, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Capital Securities represented thereby for all
purposes under the Declaration and the Capital Securities. No
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beneficial owner of an interest in a Global Certificate will be able to transfer
that interest except in accordance with DTC's applicable procedures, in addition
to those provided for under the Declaration.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of Capital Securities (including the presentation of Capital
Securities for exchange as described below) only at the direction of one or more
Participants to whose account the DTC interests in the Global Certificates are
credited and only in respect of such portion of the aggregate liquidation amount
of Capital Securities as to which such Participant or Participants has or have
given such direction.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants, and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Redemption notices in respect of the Capital Securities held in book-entry
form will be sent to Cede & Co. If less than all of the Capital Securities are
being redeemed, DTC will determine the amount of the interest of each
Participant to be redeemed in accordance with its procedures.
Although voting with respect to the Capital Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Capital Securities. Under its usual procedures,
DTC would mail an Omnibus Proxy to the Trust as soon as possible after the
record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights
to those Participants to whose accounts the Capital Securities are credited on
the record date (identified in a listing attached to the Omnibus Proxy).
Distributions on the Capital Securities held in book-entry form will be
made to DTC in immediately available funds. DTC's practice is to credit
Participants' accounts on the relevant payment date in accordance with their
respective holdings shown on DTC's records unless DTC has reason to believe that
it will not receive payments on such payment date. Payments by Participants and
Indirect Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
Participants and Indirect Participants and not of DTC, the Trust or the Company,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of distributions to DTC is the responsibility of the
Trust, disbursement of such payments to Participants is the responsibility of
DTC, and disbursement of such payments to the Beneficial Owners is the
responsibility of Participants and Indirect Participants.
Except as provided herein, a Beneficial Owner of an interest in a Global
Certificate will not be entitled to receive physical delivery of Capital
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Capital Securities.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Certificates among Participants of DTC, DTC
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any
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time. Neither the Company, the Issuer nor the Trustee will have any
responsibility for the performance by DTC or its Participants or Indirect
Participants under the rules and procedures governing DTC. DTC may discontinue
providing its services as securities depositary with respect to the Capital
Securities at any time by giving notice to the Trust. Under such circumstances,
in the event that a successor securities depositary is not obtained, Capital
Security certificates are required to be printed and delivered. Additionally,
the Trust (with the consent of the Company) may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor depositary). In that
event, certificates for the Capital Securities will be printed and delivered.
Payment and Paying Agency
Payments in respect of the Capital Securities represented by the Global
Certificates will be made to DTC, which will credit the relevant accounts at DTC
on the applicable distribution dates, provided that, in the case of Certificated
Securities, such payments will be made by check mailed to the address of the
holder entitled thereto at its registered address. The paying agent will
initially be Citibank, N.A. The paying agent will be permitted to resign upon 30
days' written notice to the Institutional Trustee. In the event that Citibank,
N.A. shall no longer be the paying agent, the Institutional Trustee will appoint
a successor to act as Paying Agent (which shall be a bank or trust company).
Registrar and Transfer Agent
Citibank, N.A. will act as registrar and transfer agent for the Capital
Securities. Registration of transfers of Capital Securities will be effected
without charge by or on behalf of the Trust, but upon payment (with the giving
of such indemnity as the Trust or the Company may reasonably require) in respect
of any tax or other government charges which may be imposed in relation to it.
The Trust will not be required to register or cause to be registered the
transfer of Capital Securities after such Capital Securities have been called
for redemption.
Information Concerning the Institutional Trustee
The Institutional Trustee, prior to the occurrence of a default with
respect to the Trust Securities and after the curing of any defaults that may
have occurred, undertakes to perform only such duties as are specifically set
forth in the Declaration and, after a default of which it has knowledge, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provisions, the Institutional
Trustee is under no obligation to exercise any of the powers vested in it by the
Declaration at the request of any holder of Capital Securities, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The holders of Capital Securities will not be
required to offer such indemnity in the event such holders, by exercising their
voting rights, direct the Institutional Trustee to take any action it is
empowered to take under the Declaration following a Declaration Event of
Default. The Institutional Trustee also serves as trustee under the Guarantee
and the Indenture.
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Governing Law
The Declaration and the Capital Securities will be governed by, and
construed in accordance with, the laws of the State of Delaware.
Miscellaneous
The Regular Trustees are authorized and directed to operate the Trust in
such a way so that the Trust will not be required to register as an "investment
company" under the 1940 Act or characterized as other than a grantor trust for
United States federal income tax purposes. Citicorp intends to conduct its
affairs so that the Subordinated Debt Securities will be treated as indebtedness
of Citicorp for United States federal income tax purposes. In this connection,
Citicorp and the Regular Trustees may take any action, not inconsistent with
applicable law, the certificate of trust of the Trust, the Declaration or the
certificate of incorporation of Citicorp, that each of Citicorp and the Regular
Trustees determine in their discretion to be necessary or desirable to achieve
such end, as long as such action does not adversely affect the interests of the
holders of the Capital Securities or vary the terms thereof.
Holders of the Capital Securities have no preemptive rights.
DESCRIPTION OF THE GUARANTEE
Pursuant to the Guarantee, Citicorp will irrevocably agree, to the extent
set forth therein, to pay in full to the holders of the Capital Securities
issued by the Trust, the Guarantee Payments (as defined in the accompanying
Prospectus) (except to the extent paid by the Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which the Trust may
have or assert. The Guarantee will not apply to any payment except to the extent
the Trust shall have funds available therefor. The Company's obligation to make
a Guarantee Payment may be satisfied by direct payment of the required amounts
by the Company to the holders of Capital Securities or by causing the Trust to
pay such amounts to such holders. The Guarantee will be qualified as an
indenture under the Trust Indenture Act. Wilmington Trust Company will act as
indenture trustee under the Guarantee (the "Guarantee Trustee"). The terms of
the Guarantee will be those set forth in such Guarantee and those made part of
such Guarantee by the Trust Indenture Act. The Guarantee will be held by the
Guarantee Trustee for the benefit of the holders of the Capital Securities. A
summary description of the Guarantee appears in the accompanying Prospectus
under the caption "Description of the Capital Securities Guarantees."
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DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
Set forth below is a description of the specific terms of the Subordinated
Debt Securities in which the Trust will invest the proceeds from the issuance
and sale of the Trust Securities. This description supplements the description
of the general terms and provisions of the Subordinated Debt Securities set
forth in the accompanying Prospectus under the caption "Description of the
Subordinated Debt Securities." The following description does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the description in the accompanying Prospectus and the Indenture, dated as of
December 17, 1996, as supplemented by a Supplemental Indenture dated as of
January 29, 1997, and as further supplemented by a Second Supplemental Indenture
dated as of _________ (the "Indenture"), between Citicorp and Wilmington Trust
Company, as Trustee (the "Debt Trustee").
Under certain circumstances involving the dissolution of the Trust
following the occurrence of a Tax Event or a Regulatory Capital Event,
Subordinated Debt Securities may be distributed to the holders of the Trust
Securities in liquidation of the Trust. See "Description of the Capital
Securities -- Tax Event Redemption or Distribution" and "--Regulatory Capital
Event Redemption or Distribution."
General
The Subordinated Debt Securities will be issued as unsecured debt under
the Indenture. The Subordinated Debt Securities will be limited in aggregate
principal amount to $___ million, such amount being the sum of the aggregate
stated liquidation amounts of the Capital Securities and the Common Securities.
The Subordinated Debt Securities are not subject to a sinking fund
provision. The entire principal amount of the Subordinated Debt Securities will
mature and become due and payable, together with any accrued and unpaid interest
thereon including Compound Interest (as defined herein) and Additional Interest
(as defined herein), if any, on ________.
If Subordinated Debt Securities are distributed to holders of Capital
Securities in liquidation of such holders' interests in the Trust, such
Subordinated Debt Securities will initially be issued as a Global Security (as
defined herein). As described herein, under certain limited circumstances,
Subordinated Debt Securities may be issued in certificated form in exchange for
a Global Security. See "-- Book-Entry and Settlement" below. In the event that
Subordinated Debt Securities are issued in certificated form, such Subordinated
Debt Securities will be in denominations of $1,000 and integral multiples
thereof and may be transferred or exchanged at the offices described below.
Payments on Subordinated Debt Securities issued as a Global Security will be
made to DTC, a successor depositary or, in the event that no depositary is used,
to a Paying Agent for the Subordinated Debt Securities. In the event
Subordinated Debt Securities are issued in certificated form, principal and
interest will be payable, the transfer of the Subordinated Debt Securities will
be registrable and Subordinated Debt Securities will be exchangeable for
Subordinated Debt Securities of other denominations of a like aggregate
principal amount at the corporate trust office of the Debt Trustee in New York,
New York; provided, that payment of interest may be made at the option of
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Citicorp by check mailed to the address of the holder entitled thereto or by
wire transfer to an account appropriately designated by the holder entitled
thereto. Notwithstanding the foregoing, so long as the holder of any
Subordinated Debt Securities is the Institutional Trustee, the payment of
principal and interest on the Subordinated Debt Securities held by the
Institutional Trustee will be made at such place and to such account as may be
designated by the Institutional Trustee.
Subordination
The Indenture provides that the Subordinated Debt Securities are
subordinated and junior in right of payment to all Senior Indebtedness of
Citicorp, including all outstanding subordinated debt securities issued by
Citicorp prior to the issuance of the Subordinated Debt Securities. No payment
of principal (including redemption payments), premium, if any, or interest on
the Subordinated Debt Securities may be made if there shall have occurred and be
continuing a default in any payment with respect to Senior Indebtedness or an
event of default with respect to any Senior Indebtedness resulting in the
acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default, unless and until such default shall
have been cured or waived or such proceeding shall be terminated. Upon any
distribution of assets of Citicorp to creditors upon any dissolution,
winding-up, liquidation or reorganization, whether voluntary or involuntary, or
in bankruptcy, insolvency, receivership or other proceedings, all principal,
premium, if any, and interest due or to become due on all Senior Indebtedness of
Citicorp must be paid in full before the holders of Subordinated Debt Securities
are entitled to receive or retain any payment. Notwithstanding the foregoing,
the holders of Senior Indebtedness shall not be entitled to receive payment of
any amounts which would otherwise (but for the subordination provisions of the
Indenture) be payable in respect of the Subordinated Debt Securities but for the
fact that any such Senior Indebtedness is by its terms subordinated in right of
payment to Trade Credit (as defined herein) and, as a result of which
subordination, amounts otherwise payable in respect of such Senior Indebtedness
are to be paid to holders of Trade Credit.
The term "Senior Indebtedness" means any obligation of Citicorp to its
creditors, whether outstanding or subsequently incurred, except for (w) any
other subordinated debt securities issued under the Indenture, (x) all other
debt securities, and guarantees in respect of those debt securities, issued to
any other trust, or a trustee of such trust, partnership or other entity
affiliated with Citicorp that is a financing vehicle of Citicorp (a "financing
entity") in connection with the issuance by such financing entity of equity
securities or other securities guaranteed by Citicorp pursuant to an instrument
that ranks pari passu with, or junior to, the Guarantee, (y) obligations
incurred or assumed by Citicorp in the ordinary course of business in connection
with the obtaining of materials or services, and all obligations of Citicorp in
respect of any guarantees of such obligations of subsidiaries of Citicorp
(provided that obligations described in this clause (y) ("Trade Credit") shall
not include traveler's checks or other unsubordinated financial instruments) and
(z) any other obligations as to which, in the instrument creating or evidencing
the same or pursuant to which the same is outstanding, it is provided that such
obligation is not Senior Indebtedness. Such Senior Indebtedness shall continue
to be Senior Indebtedness and be entitled to the benefits of the subordination
provisions irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness. The Indenture does not limit the aggregate amount of
Senior Indebtedness that may be issued by Citicorp.
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Interest
The Subordinated Debt Securities will bear interest at the rate of ____%
per annum from the original date of issuance, payable semiannually in arrears on
_________ and _______ of each year (each an "Interest Payment Date"), commencing
__________, to the persons in whose name such Subordinated Debt Securities are
registered, subject to certain exceptions, at the close of business on the
Business Day next preceding such Interest Payment Date. In the event any
Subordinated Debt Securities distributed to holders of Capital Securities shall
not continue to remain in book-entry only form, Citicorp shall have the right to
select record dates, which shall be not less than one nor more than 15 Business
Days prior to the Interest Payment Date.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. The amount of interest payable
for any period shorter than a full semiannual period for which interest is
computed, will be computed on the basis of the actual number of days elapsed per
30-day month. In the event that any date on which interest is payable on the
Subordinated Debt Securities is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, then
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
Option to Extend Interest Payment Period
So long as no Event of Default shall have occurred and be continuing under
the Indenture, Citicorp shall have the right at any time, and from time to time,
during the term of the Subordinated Debt Securities to defer payments of
interest by extending the interest payment period for a period not exceeding 10
consecutive semiannual interest periods from the last interest payment date to
which interest was paid in full, at the end of which Extension Period, Citicorp
shall pay all interest then accrued and unpaid (including any Additional
Interest, as herein defined) together with interest thereon compounded
semiannually at the rate specified for the Subordinated Debt Securities to the
extent permitted by applicable law ("Compound Interest"); provided that during
any such Extension Period, (a) Citicorp shall not declare or pay dividends on,
make any distribution with respect to, or redeem, purchase, acquire for value or
make a liquidation payment with respect to any of its capital stock (other than
(i) purchases or acquisitions of shares of Citicorp common stock in connection
with the satisfaction by Citicorp of its obligations under any employee benefit
plans or any other contractual obligations of Citicorp (other than a contractual
obligation ranking pari passu with or junior in right of payment to the
Subordinated Debt Securities) entered into prior to the date of issuance of the
Subordinated Debt Securities, (ii) as a result of a reclassification of Citicorp
capital stock or the exchange or conversion of one class or series of Citicorp's
capital stock for another class or series of Citicorp capital stock or (iii) the
purchase of fractional interests in shares of Citicorp's capital stock pursuant
to the conversion or exchange provisions of such Citicorp capital stock or the
security being converted or exchanged) and (b) Citicorp shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by Citicorp that rank pari passu with or
junior in right of payment to the Subordinated Debt Securities. Prior to the
termination of any such Extension Period, Citicorp may further defer payments of
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interest by extending the interest payment period; provided, however, that, such
Extension Period, including all such previous and further extensions, may not
exceed 10 consecutive semiannual interest periods or extend beyond the maturity
of the Subordinated Debt Securities. Upon the termination of any Extension
Period and the payment of all amounts then due, Citicorp may commence a new
Extension Period, subject to the terms set forth in this section. No interest
shall be due and payable during an Extension Period, except at the end thereof.
Citicorp has no present intention of exercising its right to defer payments of
interest by extending the interest payment period on the Subordinated Debt
Securities. If the Institutional Trustee is the sole holder of the Subordinated
Debt Securities, Citicorp shall give the Regular Trustees and the Institutional
Trustee notice of its selection of such Extension Period one Business Day prior
to the earlier of (i) the date distributions on the Capital Securities are
payable or (ii) the date the Regular Trustees are required to give notice to any
applicable self-regulatory organization or to holders of the Capital Securities
of the record date or the date such distribution is payable. The Regular
Trustees shall give notice of Citicorp's selection of such Extension Period to
the holders of the Capital Securities. If the Institutional Trustee is not the
sole holder of the Subordinated Debt Securities, Citicorp shall give the holders
of the Subordinated Debt Securities notice of its selection of such Extension
Period 10 Business Days prior to the earlier of (i) the Interest Payment Date or
(ii) the date upon which Citicorp is required to give notice to any applicable
self-regulatory organization or to holders of the Subordinated Debt Securities
of the record or payment date of such related interest payment.
Additional Interest
If at any time the Trust or the Institutional Trustee shall be required to
pay any taxes, duties, assessments or governmental charges of whatever nature
(other than withholding taxes) imposed by the United States or any other taxing
authority, then, in any such case, Citicorp will pay as additional interest
("Additional Interest") such additional amounts as shall be required so that the
net amounts received and retained by the Trust and the Institutional Trustee
after paying any such taxes, duties, assessments or other governmental charges
will be not less than the amounts the Trust or the Institutional Trustee would
have received had no such taxes, duties, assessments or other governmental
charges been imposed.
Optional Redemption
Citicorp will have the right to redeem the Subordinated Debt Securities,
in whole or in part, from time to time, on or after ___________, and earlier in
certain circumstances upon the occurrence of a Tax Event or a Regulatory Capital
Event as described under "Description of the Capital Securities -- Tax Event
Redemption or Distribution" and "--Regulatory Capital Event Redemption or
Distribution," upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to the applicable Redemption Percentage (as defined under
"Description of the Capital Securities -- Redemption") of the principal amount
to be redeemed plus accrued and unpaid interest, including Additional Interest,
if any, to the redemption date; provided, however, that the Subordinated Debt
Securities may not be redeemed in part unless all unpaid interest, including
Additional Interest, accrued through the most recent semiannual interest period
ending on or prior to the date fixed for redemption shall have been paid. Before
effecting any optional redemption, Citicorp will obtain any approvals of
regulatory authorities then required by applicable law.
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Indenture Events of Default
See "Description of the Subordinated Debt Securities --Events of Default,
Waiver and Notice" in the accompanying Prospectus for a description of Events of
Default under the Indenture. An Event of Default under the Indenture also
constitutes a Declaration Event of Default. The holders of Capital Securities in
certain circumstances have the right to direct the Institutional Trustee to
exercise its rights as the holder of the Subordinated Debt Securities. See
"Description of the Capital Securities--Declaration Events of Default" and
"--Voting Rights." Notwithstanding the foregoing, if an Event of Default under
the Indenture has occurred and is continuing and such event is attributable to
the failure of Citicorp to pay interest or principal on the Subordinated Debt
Securities on the date such interest or principal is otherwise payable, Citicorp
acknowledges that a holder of Capital Securities may then institute a Direct
Action for payment on or after the respective due date specified in the
Subordinated Debt Securities. Notwithstanding any payments made to such holder
of Capital Securities by Citicorp in connection with a Direct Action, Citicorp
shall remain obligated to pay the principal of or interest on the Subordinated
Debt Securities held by the Trust or the Institutional Trustee of the Trust, and
Citicorp shall be subrogated to the rights of the holder of such Capital
Securities with respect to payments on the Capital Securities to the extent of
any payments made by the Company to such holder in any Direct Action. The
holders of Capital Securities will not be able to exercise directly any other
remedy available to the holders of the Subordinated Debt Securities.
Book-Entry and Settlement
If distributed to holders of Capital Securities in connection with the
involuntary or voluntary dissolution of the Trust as a result of the occurrence
of a Tax Event or a Regulatory Capital Event, the Subordinated Debt Securities
will be issued in the form of one or more global certificates (each a "Global
Security") registered in the name of the Depositary or its nominee. Except under
the limited circumstances described below, Subordinated Debt Securities
represented by the Global Security will not be exchangeable for, and will not
otherwise be issuable as, Subordinated Debt Securities in definitive form. The
Global Securities described above may not be transferred 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 to a successor depositary
or its nominee.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Subordinated Debt
Securities in definitive form and will not be considered the holders (as defined
in the Indenture) thereof for any purpose under the Indenture, and no Global
Security representing Subordinated Debt Securities shall be exchangeable, except
for another Global Security of like denomination and tenor to be registered in
the name of the Depositary or its nominee or to a successor depositary or its
nominee. Accordingly, each Beneficial Owner must rely on the procedures of the
Depositary or if such person is not a Participant, on the procedures of the
Participant through which such person owns its interest to exercise any rights
of a holder under the Indenture.
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The Depositary
If Subordinated Debt Securities are distributed to holders of Capital
Securities in liquidation of such holders' interests in the Trust, DTC will act
as securities depositary for the Subordinated Debt Securities. For a description
of DTC and the specific terms of the depositary arrangements, see "Description
of the Capital Securities -- Book-Entry Only Issuance -- The Depository Trust
Company." As of the date of this Prospectus Supplement, the description therein
of DTC's book-entry system and DTC's practices as they relate to purchases,
transfers, notices and payments with respect to the Capital Securities apply in
all material respects to any debt obligations represented by one or more Global
Securities held by Citicorp. Citicorp may appoint a successor to DTC or any
successor depositary in the event DTC or such successor depositary is unable or
unwilling to continue as a depositary for the Global Securities.
None of Citicorp, the Trust, the Institutional Trustee, any paying agent
and any other agent of Citicorp, or the Debt Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Security
for such Subordinated Debt Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Discontinuance of the Depositary's Services
A Global Security shall be exchangeable for Subordinated Debt Securities
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies Citicorp that it is unwilling or unable to
continue as a depositary for such Global Security and no successor depositary
shall have been appointed, (ii) the Depositary, at any time, ceases to be a
clearing agency registered under the Exchange Act at which time the Depositary
is required to be so registered to act as such depositary and no successor
depositary shall have been appointed, (iii) Citicorp, in its sole discretion,
determines that such Global Security shall be so exchangeable or (iv) there
shall have occurred an Event of Default with respect to such Subordinated Debt
Securities. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Subordinated Debt Securities registered in
such names as the Depositary shall direct. It is expected that such instructions
will be based upon directions received by the Depositary from its Participants
with respect to ownership of beneficial interests in such Global Security.
Governing Law
The Indenture and the Subordinated Debt Securities will be governed by,
and construed in accordance with, the laws of the State of New York.
Miscellaneous
The Indenture will provide that Citicorp will pay all fees and expenses
related to (i) the offering of the Subordinated Debt Securities, (ii) the
organization, maintenance and dissolution of the Trust, (iii) the retention of
the Trustees and (iv) the enforcement by the Institutional Trustee of the rights
of the holders of the Capital Securities.
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Citicorp will have the right at all times to assign any of its respective
rights or obligations under the Indenture to a direct or indirect wholly-owned
subsidiary of Citicorp; provided that, in the event of any such assignment,
Citicorp will remain liable for all of their respective obligations. Subject to
the foregoing, the Indenture will be binding upon and inure to the benefit of
the parties thereto and their respective successors and assigns. The Indenture
provides that it may not otherwise be assigned by the parties thereto.
UNITED STATES FEDERAL INCOME TAXATION
General
The following is a summary of the material United States federal income
tax consequences applicable to holders of the Capital Securities. The summary
deals only with Capital Securities held as capital assets by initial holders and
does not deal with special classes of holders, such as dealers in securities or
currencies, life insurance companies, tax-exempt organizations, persons holding
the Capital Securities as a hedge or hedged against currency risks or as part of
a straddle or conversion transaction or persons whose functional currency is not
the U.S. dollar. The summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury regulations thereunder, published rulings and
court decisions, as currently in effect, all of which are subject to change,
possibly with retroactive effect.
Persons considering the purchase of Capital Securities should consult
their own tax advisors concerning the application of the United States federal
income tax laws to their particular situations, as well as the application of
state or local laws or the laws of any other taxing jurisdiction.
United States Holders
As used herein, "United States Holder" means a beneficial holder of
Capital Securities who or which is (i) a citizen or resident of the United
States, (ii) a corporation created or organized under the laws of the United
States or any political subdivision thereof (including the District of
Columbia), or (iii) a person otherwise subject to United States federal income
taxation on a net income basis in respect of Capital Securities.
Classification of the Subordinated Debt Securities
Assuming full compliance with the terms of the Indenture and the
Declaration, the Subordinated Debt Securities will be classified for United
States federal income tax purposes as indebtedness of Citicorp.
Classification of the Trust
Assuming full compliance with the terms of the Indenture and the
Declaration, the Trust will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corporation.
Accordingly, for United States federal income tax purposes, each holder of
Capital Securities generally will be considered the owner of an undivided
interest in
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the Subordinated Debt Securities, and each holder will be required to include in
its gross income interest and original issue discount ("OID"), if any, accrued
with respect to its allocable share of the Subordinated Debt Securities.
Interest and Original Issue Discount
United States Holders (including cash basis United States Holders) of debt
instruments issued with OID must generally include such OID in income as it
accrues on a constant yield basis, generally before the receipt of cash
attributable to such income and generally in increasingly greater amounts over
the life of the debt instrument. A debt instrument will generally be treated as
issued with OID if the excess of the instrument's "stated redemption price at
maturity" over its issue price is more than a specified de minimis amount. The
stated redemption price at maturity of an instrument is the total of all
payments provided by the instrument that are not payments of "qualified stated
interest." A qualified stated interest payment is generally any one of a series
of stated interest payments on an instrument that are unconditionally payable at
least annually at a single fixed rate (with certain exceptions for lower rates
paid during some periods) applied to the outstanding principal amount of the
debt instrument. In determining whether a debt instrument has been issued with
OID, remote contingencies as to the timely payment of stated interest are
ignored. In the case of the Subordinated Debt Securities, Citicorp has concluded
that the likelihood of its exercising its option to defer payment of interest is
remote because the exercise of such option would prevent Citicorp from declaring
dividends on any class of its stock. Accordingly, Citicorp intends to treat the
Subordinated Debt Securities as having been issued without OID and, therefore,
United States Holders of the Capital Securities will accrue interest income
under their particular methods of accounting (e.g., cash or accrual) rather than
accruing OID on a constant yield basis.
If, however, Citicorp were to exercise its right to defer payments of
interest, under existing Treasury regulations, the Subordinated Debt Securities
will become OID instruments, and all United States Holders of the Capital
Securities will thereafter be required to accrue interest on a constant yield
basis during any Extension Period even though Citicorp will not pay the interest
in cash until the end of the Extension Period, and even though a United States
Holder may be on the cash method of accounting. Furthermore, if the Subordinated
Debt Securities become OID instruments because Citicorp has exercised its right
to defer payment of interest, they will be taxed as OID instruments for as long
as they remain outstanding, even after the expiration of the Extension Period
and the payment of all accrued and compounded interest.
The above conclusions are based on recently-promulgated Treasury
regulations, which have not been interpreted by any court decisions or addressed
in any rulings or other pronouncements of the Internal Revenue Service ("IRS"),
and its is possible that the IRS could take a position contrary to the
conclusions herein.
Corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Capital Securities.
Market Discount and Bond Premium
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Under certain circumstances, United States Holders of Capital Securities
other than initial holders may be considered to have acquired their undivided
interests in the Subordinated Debt Securities with market discount or
acquisition premium as such phrases are defined for United States federal income
tax purposes. Such holders are advised to consult their tax advisors as to the
income tax consequences of the acquisition, ownership and disposition of the
Capital Securities.
Receipt of Subordinated Debt Securities or Cash Upon Liquidation of the Trust
As described under "Description of the Capital Securities --Tax Event
Redemption or Distribution" and "--Regulatory Capital Event Redemption or
Distribution," Citicorp has the right to distribute Subordinated Debt Securities
to holders in exchange for the Capital Securities and in liquidation of the
Trust. Under current law, such a distribution, for United States federal income
tax purposes, would be treated as a non-taxable event to each holder, and each
holder would receive an aggregate tax basis in the Subordinated Debt Securities
equal to such holder's aggregate tax basis in its Capital Securities. A holder's
holding period in the Subordinated Debt Securities so received in liquidation of
the Trust would include the period during which the Capital Securities were held
by such holder. If, however, the Trust is treated as an association taxable as a
corporation at the time of its liquidation, the distribution of Subordinated
Debt Securities in liquidation of the Trust would likely constitute a taxable
event to the holders of the Capital Securities.
Upon the occurrence of a Tax Event or a Regulatory Capital Event, the
Subordinated Debt Securities may be redeemed for cash and the proceeds of such
redemption distributed to holders in redemption of their Capital Securities.
Under current law, such a redemption would, for United States federal income tax
purposes, constitute a taxable disposition of the redeemed Capital Securities,
and a United States Holder would recognize gain or loss as if it sold such
redeemed Capital Securities for cash. See "United States Federal Income Taxation
- -- Sales of Capital Securities."
Sales of Capital Securities
A United States Holder that sells Capital Securities will recognize gain
or loss equal to the difference between its adjusted tax basis in the Capital
Securities and the amount realized on the sale of such Capital Securities.
Assuming Citicorp does not defer interest on the Subordinated Debt Securities by
extending the interest payment period, a holder's adjusted tax basis in the
Capital Securities generally will be its initial purchase price. Except to the
extent attributable to accrued but unpaid interest (which is taxable as ordinary
income ) and subject to the market discount rules described above, such gain or
loss generally will be capital gain or loss. Long-term capital gain of an
individual United States Holder is generally subject to a maximum tax rate of
28% for property held for more than one year. The maximum rate is reduced to 20%
in the case of property held for more than 18 months.
The Capital Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Subordinated Debt Securities. If Citicorp exercises its right to defer payments
of interest, a United States Holder who disposes of his Capital Securities
between record dates for payments of distributions thereon will be required to
include
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accrued but unpaid interest on the Subordinated Debt Securities through the date
of disposition in income as ordinary income, and to add such amount to his
adjusted tax basis in his pro rata share of the underlying Subordinated Debt
Securities deemed disposed of. To the extent the selling price is less than the
United States Holder's adjusted tax basis (which will include, in the form of
OID, all accrued but unpaid interest) such holder will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes. Accrual
basis United States Holders will be subject to similar treatment without regard
to Citicorp's election to defer.
United States Alien Holders
Under present United States federal income tax law and subject to the
discussion of backup withholding below:
(a) payment of principal and interest (including any OID) by the Trust or
any of its paying agents to any United States Alien Holder (as defined below)
will not be subject to United States federal withholding tax, provided that
in the case of interest or OID, (1) the beneficial owner of the Capital
Securities does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of Citicorp entitled to vote,
(2) the beneficial owner of the Capital Securities is not a controlled
foreign corporation that is related to Citicorp through stock ownership, (3)
either (i) the beneficial owner of the Capital Securities certifies to
Citicorp or its agent, under penalties of perjury, that he is not a United
States person (as defined below) and provides his name and address, or (ii) a
securities clearing organization, bank or other financial institution that
holds customers' securities in the ordinary course of its trade or business
(a "financial institution") and holds the Capital Securities on behalf of the
beneficial owner certifies to Citicorp or its paying agent under penalties of
perjury that such statement has been received from the beneficial owner by it
or by a financial institution between it and the beneficial owner and
furnishes the payor a copy thereof, and (4) the beneficial owner is not a
bank as to which the Capital Securities (or any portion thereof) are
considered to be an extension of credit made by a bank pursuant to a loan
agreement entered into in the ordinary course of the bank's trade or
business;
(b) a United States Alien Holder will not be subject to United States
federal withholding tax on gain realized on the sale or other disposition of
Capital Securities.
As used herein, a "United States Alien Holder" is any holder of Capital
Securities who is a United States Alien (as defined below). As used herein, a
"United States Alien" means any person who, for United States federal income tax
purposes, is a foreign corporation, a non-resident alien individual, a
non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership to the extent that one or more of the members is, for United States
federal income tax purposes, a foreign corporation, a non-resident alien
individual or a non-resident alien fiduciary of a foreign estate or trust, in
each case not subject to United States federal income tax on a net income basis
in respect of Capital Securities. "United States person" means a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States
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or an estate or trust the income of which is subject to United States federal
income taxation regardless of its source.
Backup Withholding and Information Reporting
Payments of principal (including OID, if any) and any premium and interest
made within the United States by the Trust or any of its paying agents are
generally subject to information reporting and possibly to "backup withholding"
at a rate of 31%. Information reporting and backup withholding do not apply to
payments made on Capital Securities if the certification described in clause
(a)(3) under "United States Alien Holders" is received, provided, in each case,
that the payor does not have actual knowledge that the holder is a United States
person.
Payment of the proceeds from the sale of Capital Securities to or through
a foreign office of a broker will not be subject to information reporting or
backup withholding, except that if the broker is a United States person, a
controlled foreign corporation for United States tax purposes or a foreign
person 50% or more of whose gross income is effectively connected with the
conduct of a trade or business within the United States for a specified
three-year period, information reporting will apply to such payments unless such
broker has documentary evidence in its files of the owner's foreign status and
has no actual knowledge to the contrary, or the owner otherwise establishes an
exemption. Payment of the proceeds from a sale of Capital Securities to or
through the United States office of a broker is subject to information reporting
and backup withholding unless the holder or beneficial owner certifies as to its
non-United States status or otherwise establishes an exemption from information
reporting and backup withholding.
Backup withholding will generally not apply to United States Holders other
than certain noncorporate Holders who fail to supply an accurate taxpayer
identification number or who fail to report all interest and dividend income
required to be shown on their federal income tax returns.
ERISA CONSIDERATIONS
Each of the Company (the obligor with respect to the Subordinated Debt
Securities held by the Trust) and its affiliates may be considered a "party in
interest" (within the meaning of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) or a "disqualified person" (within the meaning of
Section 4975 of the Code) with respect to certain employee benefit plans
("Plans") that are subject to ERISA. Any purchaser proposing to acquire Capital
Securities with assets of any Plan should consult with its counsel. The purchase
and/or holding of Capital Securities by a Plan that is subject to the fiduciary
responsibility provisions of ERISA or the prohibited transaction provisions of
Section 4975 of the Code (including individual retirement arrangements and other
plans described in Section 4975(e)(1) of the Code) and with respect to which the
Company or any affiliate is a service provider (or otherwise is a party in
interest or a disqualified person) may constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code, unless such Capital
Securities are acquired pursuant to and in accordance with an applicable
exemption, such as Prohibited Transaction Class Exemption ("PTCE") 84-14 (an
exemption for certain transactions determined by an independent qualified
professional asset manager), PTCE 91-38 (an exemption for certain transactions
involving bank collective investment funds), PTCE
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90-1 (an exemption for certain transactions involving insurance company pooled
separate accounts), PTCE 95-60 (an exemption for transactions involving certain
insurance company general accounts) or PTCE 96-23 (an exemption for certain
transactions determined by an in-house asset manager). In addition, a Plan
fiduciary considering the purchase of Capital Securities should be aware that
the assets of the Trust may be considered "plan assets" for ERISA purposes. In
such event, service providers with respect to the assets of the Trust may become
parties in interest or disqualified persons with respect to investing Plans, and
any discretionary authority exercised with respect to the Subordinated Debt
Securities by such persons could be deemed to constitute a prohibited
transaction under ERISA or the Code. In order to avoid such prohibited
transactions, each investing Plan, by purchasing the Capital Securities, will be
deemed to have directed the Trust to invest in the Subordinated Debt Securities
and to have appointed the Institutional Trustee.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement"), the Trust has agreed to sell to each of the
Underwriters named below, and each of the Underwriters has severally agreed to
purchase the number of Capital Securities set forth opposite its name below. In
the Underwriting Agreement, the several Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all the Capital Securities
offered hereby if any of the Capital Securities are purchased. In the event of
default by an Underwriter, the Underwriting Agreement provides that, in certain
circumstances, the purchase commitments of the non-defaulting Underwriters may
be increased or the Underwriting Agreement may be terminated.
Number of
Capital
Underwriters Securities
------------ ----------
Total
The Underwriters propose to offer the Capital Securities, in part,
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement, and, in part, to certain securities
dealers at such price less a concession of $____ per Capital Security. The
Underwriters may allow, and such dealers may reallow, a concession not in excess
of $____ per Capital Security to certain brokers and dealers. After the Capital
Securities are released for sale to the public, the offering price and other
selling terms may from time to time be varied by Citicorp Securities, Inc.
In view of the fact that the proceeds of the sale of the Capital
Securities will ultimately be used to purchase the Subordinated Debt Securities
of Citicorp, the Underwriting Agreement provides that Citicorp will pay as
compensation ("Underwriters' Compensation") to the Underwriters arranging the
investment therein of such proceeds, an amount in immediately available funds of
$____ per Capital Security (or $_________ in the aggregate) for the accounts of
the several Underwriters.
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Because the National Association of Securities Dealers, Inc. ("NASD") is
expected to view the Capital Securities offered hereby as interests in a direct
participation program, the offering is being made in compliance with Rule 2810
of the NASD's Conduct Rules. Offers and sales of Capital Securities will be made
only to (i) "qualified institutional buyers", as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act") or (ii) institutional "accredited
investors", as defined in Rule 501(a)(1)-(3) of Regulation D under the Act. The
Underwriters may not confirm sales to any accounts over which they exercise
discretionary authority without the prior written approval of the transaction by
the customer.
Prior to this offering there has been no public market for the Capital
Securities. The Underwriters have advised the Trust that they intend to make a
market in the Capital Securities. The Underwriters will have no obligation to
make a market in the Capital Securities, however, and may cease market-making
activities, if commenced, at any time.
The Trust and Citicorp have agreed to indemnify the Underwriters against,
or contribute to payments that the Underwriters may be required to make in
respect of, certain liabilities, including liabilities under the Securities Act
of 1933, as amended.
This Prospectus Supplement and related Prospectus may be used by direct or
indirect subsidiaries of Citicorp in connection with offers and sales related to
secondary market transactions. Such subsidiaries may act as principal or agent
in such transactions. Such sales may be made at prices related to prevailing
market prices at the time of sale.
The participation of an affiliate or subsidiary of Citicorp in the offer
and sale of the Capital Securities will comply with the requirements of Rule
2720 of the Conduct Rules of the NASD regarding underwriting securities of the
affiliate.
Certain of the Underwriters engage in transactions with, and, from time to
time, have performned services for, Citicorp and its subsidiaries in the
ordinary course of business.
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Capital
Securities will be passed upon on behalf of the Trust by Morris, Nichols, Arsht
& Tunnell, Wilmington, Delaware, special Delaware counsel to the Trust. The
validity of the Subordinated Debt Securities and the Guarantee and certain
matters relating thereto will be passed upon for Citicorp by Stephen E. Dietz,
Associate General Counsel of Citibank, N.A. Mr. Dietz owns or has the right to
acquire a number of shares of Common Stock of Citicorp equal to less than 0.01%
of the outstanding Common Stock of Citicorp. The validity of the Capital
Securities, the Guarantee and the Subordinated Debt Securities will be passed
upon for the Underwriters by Sullivan & Cromwell, New York, New York. In
rendering their opinion, Sullivan & Cromwell will rely on the opinion of Morris,
Nichols, Arsht & Tunnell as to certain matters of Delaware law.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting compensation, are
approximately $10,000 in addition to those incurred or to be incurred in
connection with the offering of securities registered under the Prior
Registration Statements:
Item 15. Indemnification of Directors and Officers.
Subsection (a) of Section 145 of the General Corporation Law of the State
of Delaware empowers a corporation to indemnify any person who was or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the corporation
or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted
under similar standards, except that no indemnification may be made in respect
of any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation, among others, has been successful on the merits or otherwise in the
defense of any action, suit or proceeding referred to in subsections (a) and (b)
or in the defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith; that expenses incurred by a director or officer in
defending any action, suit or proceeding may be paid by the corporation in
advance of the final disposition thereof upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it is ultimately
determined that such director or officer is not entitled to indemnification
under Section 145; and that indemnification and advancement of expenses provided
for by Section 145 shall not be deemed
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exclusive of any other rights to which the person seeking indemnification or
advancement of expenses may be entitled; and empowers the corporation to
purchase and maintain insurance on behalf of a director or officer of the
corporation, among others, against any liability asserted against him or
incurred by him in any such capacity or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liabilities under Section 145.
The Restated Certificate of Incorporation, as amended, of Citicorp
provides, in effect, that, to the extent and under the circumstances permitted
by subsections (a) and (b) of Section 145, Citicorp (i) shall indemnify any
person who was or is a party or is threatened to be made a party to any action,
suit or proceeding described in subsections (a) and (b) by reason of the fact
that he is or was a director or officer of Citicorp against expenses, judgments,
fines and amounts paid in settlement, and (ii) may indemnify any person who was
or is a party or is threatened to be made a party to any such action, suit or
proceeding if such person was an employee or agent of Citicorp and is or was
serving at the request of Citicorp as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise. Such
Restated Certificate of Incorporation also provides, in effect, that expenses
incurred by a director or officer in defending a civil or criminal action, suit
or proceeding shall be paid by Citicorp in advance of the final disposition
thereof upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that such
director or officer is not entitled to be indemnified by Citicorp. In addition,
as permitted by Section 145 of the General Corporation Law of the State of
Delaware, Citicorp maintains liability insurance covering directors and
principal officers, including the Regular Trustees of the Trusts.
Article IV of the Declaration of Trust of each Trust limits the liability
to the Trust and certain other persons, and provides for the indemnification by
the Trust or Citicorp, of Trustees, their officers, directors and employees and
certain other persons.
Item 16. Exhibits.
1(a) -- Form of Underwriting Agreement -- Senior Notes (with
representatives, with delayed delivery). (1)
1(b) -- Form of Underwriting Agreement -- Senior Notes (without
representatives, with delayed delivery). (1)
1(c) -- Form of Underwriting Agreement -- Senior Notes (with
representatives, without delayed delivery). (2)
1(d) -- Form of Underwriting Agreement -- Senior Notes (without
representatives, without delayed delivery). (2)
1(e) -- Form of Underwriting Agreement -- Senior Notes (with
Notes and/or Warrants). (3)
1(f) -- Form of Selling Agent Agreement -- Senior Notes
(Domestic). (4)
1(g) -- Form of Selling Agent Agreement -- Senior Notes (Euro).
(5)
1(h) -- Form of Delayed Delivery Contract -- Senior Notes. (1)
1(i) -- Form of Underwriting Agreement -- Subordinated Notes
(with representatives, with delayed delivery). (6)
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1(j) -- Form of Underwriting Agreement -- Subordinated Notes
(without representatives, with delayed delivery). (6)
1(k) -- Form of Underwriting Agreement -- Subordinated Notes
(with representatives, without delayed delivery). (6)
1(l) -- Form of Underwriting Agreement -- Subordinated Notes
(without representatives, without delayed delivery). (6)
1(m) -- Form of Underwriting Agreement -- Subordinated Notes
(with Subordinated Securities and/or Warrants). (7)
1(n) -- Form of Selling Agent Agreement -- Subordinated Notes
(Domestic). (8)
1(o) -- Form of Selling Agent Agreement -- Subordinated Notes
(Euro). (8)
1(p) -- Form of Delayed Delivery Contract -- Subordinated Notes.
(6)
1(q) -- Form of Underwriting Agreement -- Subordinated Capital
Notes (with representatives). (9)
1(r) -- Form of Underwriting Agreement -- Subordinated Capital
Notes (without representatives). (9)
1(s) -- Form of Underwriting Agreement -- Preferred Stock (with
Representatives). (10)
1(t) -- Form of Underwriting Agreement -- Preferred Stock
(without Representatives). (10)
1(u) -- Form of Underwriting Agreement -- Common Stock (with
Representatives). (16)
1(v) -- Form of Underwriting Agreement -- Common Stock (without
Representatives). (16)
1(w) -- Form of Underwriting Agreement -- Trust Capital
Securities (19)
3(i) -- Restated Certificate of Incorporation, as amended
through June 16, 1993, of Citicorp. (16)
(a) Certificate of Designations, Series 18 Preferred Stock.
(17)
(b) Certificate of Designations, Series 19 Preferred Stock.
(17)
(c) Certificate of Designations, Series 20 Preferred Stock.
(17)
(d) Certificate of Designations, Series 21 Preferred Stock.
(17)
(e) Certificate of Designations, Series 22 Preferred Stock.
(17)
(f) Certificate of Designations, Series 23 Preferred Stock.
(17)
3(ii) -- Bylaws of Citicorp. (11)
4(a) -- Senior Indenture between Citicorp and United States
Trust Company of New York, as Trustee. (4)
4(b) -- First Supplemental Indenture to Senior Indenture between
Citicorp and United States Trust Company of New York, as
Trustee. (5)
4(c) -- Forms of Senior Notes (included in Exhibit 4(a) at pages
A-1 to F-27).
4(d) -- Subordinated Indenture between Citicorp and The Chase
Manhattan Bank (formerly known as Chemical Bank), as
Trustee. (12)
4(e)(i) -- First Supplemental Indenture to Subordinated Indenture
between Citicorp and The Chase Manhattan Bank, as Trustee.
(13)
4(e)(ii) -- Second Supplemental Indenture to Subordinated Indenture
between Citicorp and The Chase Manhattan Bank, as Trustee.
(18 )
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4(f) -- Forms of Subordinated Notes (included in Exhibit 4(d) at
pages A-1 to G.3-2).
4(g) -- Subordinated Capital Notes Indenture between Citicorp
and The Chase Manhattan Bank (formerly known as Chemical
Bank), as Trustee. (9)
4(h) -- First Supplemental Indenture to Subordinated Capital
Notes Indenture between Citicorp and The Chase Manhattan
Bank (formerly known as Chemical Bank), as Trustee. (14)
4(i) -- Form of Note Warrant Agreement--Senior Notes (with
definitive Note Warrants). (3)
4(j) -- Form of definitive Note Warrant--Senior Notes (included
in Exhibit 4(h) at pages 16 to 22). (3)
4(k) -- Form of Note Warrant Agreement--Senior Notes (with
global Note Warrants). (3)
4(l) -- Form of global Note Warrant--Senior Notes (included in
Exhibit 4(k) at pages 22 to 29). (3)
4(m) -- Form of Note Warrant Agreement--Subordinated Notes (with
definite Note Warrants). (7)
4(n) -- Form of definitive Note Warrant--Subordinated Notes
(included in Exhibit 4(m) at pages 16-22). (7)
4(o) -- Form of Note Warrant Agreement--Subordinated Notes (with
global Warrants). (7)
4(p) -- Form of global Note Warrant--Subordinated Notes
(included at Exhibit 4(m) at pages 22-29). (7)
4(q) -- Form of Currency Warrant Agreement (with global Currency
Warrants). (15)
4(r) -- Form of global Currency Warrant (included in Exhibit
4(h) at pages A-1 to A-5). (15)
4(s) -- Form of Certificate for shares of Preferred Stock. (10)
4(t) -- Form of Depositary Receipt. (10)
4(u) -- Form of Deposit Agreement. (10)
4(v) -- Form of Common Stock and Preferred Stock Warrant
Agreement (with definitive Common Stock and Preferred Stock
Warrant). (16)
4(w) -- Form of Common Stock and Preferred Stock Warrant
(included in Exhibit 4(v) at pages 14 to 19). (16)
4(x) -- Certificate of Trust of Citicorp Capital III.
(Certificates of Trust for each other Trust, identical
except for the name, will be filed upon request.) (20)
4(y) -- Declaration of Trust of Citicorp Capital III.
(Declarations of Trust for each other Trust, identical
except for the name, will be filed upon request.) (20)
4(z)(i) -- Form of Amended and Restated Declaration of Trust to be
used in connection with the issuance of Capital Securities
by Citicorp Capital III. (20)
4(z)(ii) -- Form of Amended and Restated Declaration of Trust to be
used in connection with the issuance of Capital Securities
by Citicorp Capital IV. (20)
4(z)(iii) -- Form of Amended and Restated Declaration of Trust to be
used in connection with the issuance of Capital Securities
by Citicorp Capital V. (20)
4(z)(iv) -- Form of Amended and Restated Declaration of Trust to be
used in connection with the issuance of Capital Securities
by Citicorp Capital VI. (20)
4(z)(v) -- Form of Amended and Restated Declaration of Trust to be
used in connection with the issuance of Capital Securities
by Citicorp Capital VII. (20)
4(z)(vi) -- Form of Amended and Restated Declaration of Trust to be
used in connection with the issuance of Capital Securities
by Citicorp Capital VIII.(20)
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4(z)(vii) -- Form of Amended and Restated Declaration of Trust to be
used in connection with the issuance of Capital Securities
by Citicorp Capital IX. (20)
4(z)(viii) -- Form of Amended and Restated Declaration of Trust to be
used in connection with the issuance of Capital Securities
by Citicorp Capital X.
4(z)(ix) -- Form of Amended and Restated Declaration of Trust to be
used in connection with the issuance of Capital Securities
by Citicorp Capital XI.
4(z)(x) -- Form of Amended and Restated Declaration of Trust to be
used in connection with the issuance of Capital Securities
by Citicorp Capital XII.
4(z)(xi) -- Form of Amended and Restated Declaration of Trust to be
used in connection with the issuance of Capital Securities
by Citicorp Capital XIII.
4(z)(xii) -- Form of Amended and Restated Declaration of Trust to be
used in connection with the issuance of Capital Securities
by Citicorp Capital XIV.
4(aa) -- Junior Subordinated Indenture between Citicorp and
Wilmington Trust Company, as Trustee. (20)
4(bb) -- Form of Supplemental Indenture to be used in connection
with the issuance of Junior Subordinated Debt Securities
and Capital Securities. (19)
4(cc)(i) -- Form of Capital Security of Citicorp Capital III. (included
as part of Exhibit 4(z)(ii)).
4(cc)(ii) -- Form of Capital Security of Citicorp Capital IV. (included
as part of Exhibit 4(z)(iii)).
4(cc)(iii) -- Form of Capital Security of Citicorp Capital V. (included
as part of Exhibit 4(z)(iv)).
4(cc)(iv) -- Form of Capital Security of Citicorp Capital VI. (included
as part of Exhibit 4(z)(v)).
4(cc)(v) -- Form of Capital Security of Citicorp Capital VII. (included
as part of Exhibit 4(z)(vi)).
4(cc)(vi) -- Form of Capital Security of Citicorp Capital VIII.
(included as part of Exhibit 4(z)(vii)).
4(cc)(vii) -- Form of Capital Security of Citicorp Capital IX. (included
as part of Exhibit 4(z)(viii)).
4(cc)(viii) -- Form of Capital Security of Citicorp Capital X. (included
as part of Exhibit 4(z)(viii)).
4(cc)(ix) -- Form of Capital Security of Citicorp Capital XI. (included
as part of Exhibit 4(z)(ix)).
4(cc)(x) -- Form of Capital Security of Citicorp Capital XII. (included
as part of Exhibit 4(z)(x)).
4(cc)(xi) -- Form of Capital Security of Citicorp Capital XIII.
(included as part of Exhibit 4(z)(xi)).
4(cc)(xii) -- Form of Capital Security of Citicorp Capital XIV. (included
as part of Exhibit 4(z)(xii)).
4(dd) -- Form of Junior Subordinated Debt Security (included as
part of Exhibit 4(aa)).
4(ee)(i) -- Form of Guarantee with respect to Capital Securities of
Citicorp Capital III. (20)
4(ee)(ii) -- Form of Guarantee with respect to Capital Securities of
Citicorp Capital IV. (20)
4(ee)(iii) -- Form of Guarantee with respect to Capital Securities of
Citicorp Capital V. (20)
4(ee)(iv) -- Form of Guarantee with respect to Capital Securities of
Citicorp Capital VI.(20)
4(ee)(v) -- Form of Guarantee with respect to Capital Securities of
Citicorp Capital VII. (20)
4(ee)(vi) -- Form of Guarantee with respect to Capital Securities of
Citicorp Capital VIII. (20)
4(ee)(vii) -- Form of Guarantee with respect to Capital Securities of
Citicorp Capital IX. (20)
II-5
<PAGE>
4(ee)(viii) -- Form of Guarantee with respect to Capital Securities of
Citicorp Capital X.
4(ee)(ix) -- Form of Guarantee with respect to Capital Securities of
Citicorp Capital XI.
4(ee)(x) -- Form of Guarantee with respect to Capital Securities of
Citicorp Capital XII.
4(ee)(xi) -- Form of Guarantee with respect to Capital Securities of
Citicorp Capital XIII.
4(ee)(xii) -- Form of Guarantee with respect to Capital Securities of
Citicorp Capital XIV.
5(a) -- Opinion and consent of Stephen E. Dietz, Associate
General Counsel of Citibank, N.A.
5(b) -- Opinion and consent of Morris, Nichols, Arsht & Tunnell.
12(a) -- Citicorp and Subsidiaries--Calculation of Ratio of
Income to Fixed Charges. (18)
23(a) -- Consent of KPMG Peat Marwick LLP.
23(b) -- Consent of Stephen E. Dietz, Associate General Counsel
of Citibank, N.A. (included as part of Exhibit 5(a)).
23(c) -- Consent of Morris, Nichols, Arsht & Tunnell (included as
part of Exhibit 5(b)).
24 -- Powers of Attorney. (22)
25(a) -- Statement of Eligibility of Wilmington Trust Company, as
Trustee with respect to Junior Subordinated Debt Securities
of Citicorp.(21)
25(b) -- Statement of Eligibility of Wilmington Trust Company, as
Property Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital III. (21)
25(c) -- Statement of Eligibility of Wilmington Trust Company, as
Property Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital IV. (21)
25(d) -- Statement of Eligibility of Wilmington Trust Company, as
Property Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital V. (21)
25(e) -- Statement of Eligibility of Wilmington Trust Company, as
Property Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital VI. (21)
25(f) -- Statement of Eligibility of Wilmington Trust Company, as
Property Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital VII.(21)
25(g) -- Statement of Eligibility of Wilmington Trust Company, as
Property Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital VIII. (21)
25(h) -- Statement of Eligibility of Wilmington Trust Company, as
Property Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital IX. (21)
25(i) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Capital Securities Guarantee of
Citicorp for the benefit of the holders of Capital
Securities of Citicorp Capital III. (21)
25(j) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Capital Securities Guarantee of
Citicorp for the benefit of the holders of Capital
Securities of Citicorp Capital IV. (21)
25(k) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Capital Securities Guarantee of
Citicorp for the benefit of the holders of Capital
Securities of Citicorp Capital V. (21)
25(l) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Capital Securities Guarantee of
Citicorp for the benefit of the holders of Capital
Securities of Citicorp Capital VI. (21)
25(m) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Capital Securities Guarantee of
Citicorp for the benefit of the holders of Capital
Securities of Citicorp Capital VII. (21)
II-6
<PAGE>
25(n) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Capital Securities Guarantee of
Citicorp for the benefit of the holders of Capital
Securities of Citicorp Capital VIII. (21)
25(o) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Capital Securities Guarantee of
Citicorp for the benefit of the holders of Capital
Securities of Citicorp Capital IX. (21)
25(p) -- Statement of Eligibility of Wilmington Trust Company, as
Property Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital X. (22)
25(q) -- Statement of Eligibility of Wilmington Trust Company, as
Property Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital XI.(22)
25(r) -- Statement of Eligibility of Wilmington Trust Company, as
Property Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital XII. (22)
25(s) -- Statement of Eligibility of Wilmington Trust Company, as
Property Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital XIII.(22)
25(t) -- Statement of Eligibility of Wilmington Trust Company, as
Property Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital XIV.(22)
25(u) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Capital Securities Guarantee of
Citicorp for the benefit of the holders of Capital
Securities of Citicorp Capital X.(22)
25(v) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Capital Securities Guarantee of
Citicorp for the benefit of the holders of Capital
Securities of Citicorp Capital XI.(22)
25(w) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Capital Securities Guarantee of
Citicorp for the benefit of the holders of Capital
Securities of Citicorp Capital XII.(22)
25(x) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Capital Securities Guarantee of
Citicorp for the benefit of the holders of Capital
Securities of Citicorp Capital XIII.(22)
25(y) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Capital Securities Guarantee of
Citicorp for the benefit of the holders of Capital
Securities of Citicorp Capital XIV.(22)
25(z) -- Statement of Eligibility of United States Trust Company
of New York with respect to Senior Notes of Citicorp.(21)
25(aa) -- Statement of Eligibility of The Chase Manhattan Bank
with respect to Subordinated Notes of Citicorp.(21)
- --------
(1) Incorporated herein by reference to Citicorp's Registration Statement on
Form S-3, File No. 2-95728.
(2) Incorporated herein by reference to Citicorp's Registration Statement on
Form S-3, File No. 33-2978.
(3) Incorporated herein by reference to Citicorp's Registration Statement on
Form S-3, File No. 33-20454.
(4) Incorporated herein by reference to Citicorp's Registration Statement on
Form S-3, File No. 33-30791.
II-7
<PAGE>
(5) Incorporated herein by reference to Citicorp's Registration Statement on
Form S-3, File No. 33-36177.
(6) Incorporated herein by reference to Citicorp's Registration Statement on
Form S-3, File No. 2-97198.
(7) Incorporated herein by reference to Citicorp's Registration Statement on
Form S-3, File No. 33-20692.
(8) Incorporated herein by reference to Citicorp's Registration Statement on
Form S-3, File No. 33-33238.
(9) Incorporated herein by reference to Citicorp's Registration Statement on
Form S-3, File No. 33-4400.
(10) Incorporated herein by reference to Citicorp's Registration Statement on
Form S-3, File No. 33-35178.
(11) Incorporated herein by reference to Citicorp's Registration Statement on
Form S-8, File No. 33-53261 (Commission File Number 1-5738).
(12) Incorporated herein by reference to Citicorp's Financial Review and Form
10-Q filed on August 14, 1991 (Commission File Number 1-5738).
(13) Incorporated herein by reference to Citicorp's Current Report on Form 8-K
filed on November 22, 1992 (Commission File Number 1-5738).
(14) Incorporated herein by reference to Citicorp's Current Report on Form 8-K
filed on April 17, 1987 (Commission File Number 1-5738).
(15) Incorporated herein by reference to Citicorp's Registration Statement on
Form S-3, File No. 33-42378.
(16) Incorporated herein by reference to Citicorp's Registration Statement on
Form S-3, File No. 33-64574.
(17) Incorporated herein by reference to Citicorp's Registration Statement on
Form 8-A, filed with respect to the corresponding series of preferred
stock.
(18) Incorporated herein by reference to Citicorp's Current Report on Form 8-K,
dated January 20, 1998 (Commission File Number 1-5738).
(19) Incorporated herein by reference to Citicorp's and the Trusts'
Registration Statement on Form S-3, File No. 333-14971.
(20) Incorporated herein by reference to Citicorp's and the Trusts'
Registration Statement on Form S-3, File No. 333-20803.
(21) Incorporated herein by reference to Citicorp and the Trusts' Registration
Statement on Form S-3, File No. 333-32065.
(22) Previously filed.
Item 17. Undertakings.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement: (i) to include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth
II-8
<PAGE>
in the registration statement (notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement); and (iii) to include any material
information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
Provided, however, that (1)(i) and (1)(ii) do not apply if the information
required to be included in a post-effective amendment by those items is
contained in periodic reports filed by the registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference to this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(5) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497 (h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(6) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(7) To supplement the prospectus relating to any offering of warrants or
rights, after the expiration date of the related subscription period, to
set forth the results of the subscription offer, the transactions by the
underwriters during the subscription period, the amount of unsubscribed
securities to be purchased by the underwriters and the terms of any
subsequent reoffering thereof. If any public offering by the underwriters
is to be made on the terms differing from those set forth
II-9
<PAGE>
on the cover page of the prospectus, a post-effective amendment will be
filed to set forth the terms of such offering.
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in The City of New York, State of New York, on January 28, 1998.
CITICORP
By /s/ Peter Gallant
--------------------
Peter Gallant
Vice President
CITICORP CAPITAL III
CITICORP CAPITAL IV
CITICORP CAPITAL V
CITICORP CAPITAL VI
CITICORP CAPITAL VII
CITICORP CAPITAL VIII
CITICORP CAPITAL IX
CITICORP CAPITAL X
CITICORP CAPITAL XI
CITICORP CAPITAL XII
CITICORP CAPITAL XIII
CITICORP CAPITAL XIV
By /s/ Peter Gallant
--------------------
Peter Gallant
Trustee
By /s/ John F. Rice
--------------------
John F. Rice
Trustee
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on January 28, 1998 by the
following persons in the capacities with Citicorp indicated below.
Signature Capacity
--------- --------
* Chairman and Director
- ----------------------------- (Principal Executive Officer)
John S. Reed
/s/ Victor J. Menezes Executive Vice President
- ----------------------------- Chief Financial Officer
Victor J. Menezes
II-11
<PAGE>
Signature Capacity
--------- --------
/s/ Thomas E. Jones Executive Vice President
- ----------------------------- (Principal Financial Officer) (a)
Thomas E. Jones
- ----------------------------- Director
Alain J.P. Belda
*
- ----------------------------- Director
D. Wayne Calloway
*
- ----------------------------- Director
Paul J. Collins
*
- ----------------------------- Director
Kenneth T. Derr
- ----------------------------- Director
John M. Deutch
*
- ----------------------------- Director
Reuben Mark
*
- ----------------------------- Director
Richard D. Parsons
*
- ----------------------------- Director
William R. Rhodes
*
- ----------------------------- Director
Rozanne L. Ridgway
- ----------
(a) Responsible for financial control, tax, accounting and reporting.
II-12
<PAGE>
Signature Capacity
--------- --------
*
- ----------------------------- Director
H. Onno Ruding
*
- ----------------------------- Director
Robert B. Shapiro
*
- ----------------------------- Director
Frank A. Shrontz
*
- ----------------------------- Director
Franklin A. Thomas
*
- ----------------------------- Director
Edgar S. Woolard, Jr.
*By /s/ Peter Gallant
--------------------------
Peter Gallant
Attorney-in-Fact
II-13
AMENDED AND RESTATED DECLARATION
OF TRUST
CITICORP CAPITAL X
Dated as of ___________, 199__
1
<PAGE>
Page
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.............................................. 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application......................... 9
SECTION 2.2 Lists of Holders of Securities........................... 9
SECTION 2.3 Reports by the Institutional Trustee..................... 10
SECTION 2.4 Periodic Reports to Institutional Trustee................ 10
SECTION 2.5 Evidence of Compliance with Conditions
Precedent................................................ 10
SECTION 2.6 Events of Default; Waiver................................ 10
SECTION 2.7 Event of Default; Notice................................. 12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name..................................................... 13
SECTION 3.2 Office................................................... 13
SECTION 3.3 Purpose.................................................. 13
SECTION 3.4 Authority................................................ 13
SECTION 3.5 Title to Property of the Trust........................... 14
SECTION 3.6 Powers and Duties of the Regular Trustees................ 14
SECTION 3.7 Prohibition of Actions by the Trust and
the Trustees............................................. 17
SECTION 3.8 Powers and Duties of the Institutional
Trustee.................................................. 18
SECTION 3.9 Certain Duties and Responsibilities of
the Institutional Trustee................................ 20
SECTION 3.10 Certain Rights of Institutional Trustee.................. 22
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 Limitation to Trust Property............................. 28
i
<PAGE>
Page
SECTION 3.17 Compensation and Fees.................................... 29
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.................. 29
SECTION 4.2 Responsibilities of the Sponsor.......................... 29
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees....................................... 30
SECTION 5.2 Delaware Trustee......................................... 30
SECTION 5.3 Institutional Trustee; Eligibility....................... 31
SECTION 5.4 Certain Qualifications of Regular
Trustees and Delaware Trustee Generally.................. 32
SECTION 5.5 Regular Trustees......................................... 32
SECTION 5.6 Delaware Trustee......................................... 32
SECTION 5.7 Appointment, Removal and Resignation of
Trustees................................................. 33
SECTION 5.8 Vacancies among Trustees................................. 34
SECTION 5.9 Effect of Vacancies...................................... 34
SECTION 5.10 Meetings................................................. 35
SECTION 5.11 Delegation of Power...................................... 35
SECTION 5.12 Merger, Conversion, Consolidation or
Succession to Business................................... 36
SECTION 5.13 Co-Trustees and Separate Trustee......................... 36
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions............................................ 38
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.................. 38
SECTION 7.2 Paying Agent............................................. 39
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
ii
<PAGE>
Page
SECTION 8.1 Dissolution and Termination of Trust..................... 40
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities................................... 41
SECTION 9.2 Transfer of Certificates................................. 41
SECTION 9.3 Deemed Security Holders.................................. 43
SECTION 9.4 Book Entry Interests..................................... 43
SECTION 9.5 Notices to Clearing Agency............................... 45
SECTION 9.6 Appointment of Successor Clearing Agency................. 45
SECTION 9.7 Definitive Preferred Security
Certificates............................................. 45
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates............................................. 46
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability................................................ 46
SECTION 10.2 Exculpation.............................................. 47
SECTION 10.3 Fiduciary Duty........................................... 47
SECTION 10.4 Indemnification.......................................... 49
SECTION 10.5 Outside Businesses....................................... 52
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.............................................. 53
SECTION 11.2 Certain Accounting Matters............................... 53
SECTION 11.3 Banking.................................................. 53
SECTION 11.4 Withholding.............................................. 54
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments............................................... 54
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent................................ 57
iii
<PAGE>
Page
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of
Institutional Trustee.................................... 58
SECTION 13.2 Representations and Warranties of
Delaware Trustee......................................... 59
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.................................................. 60
SECTION 14.2 Governing Law............................................ 61
SECTION 14.3 Intention of the Parties................................. 62
SECTION 14.4 Headings................................................. 62
SECTION 14.5 Successors and Assigns................................... 62
SECTION 14.6 Partial Enforceability................................... 62
SECTION 14.7 Counterparts............................................. 62
ANNEX I TERMS OF SECURITIES...................................... I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE...................... A2-1
EXHIBIT B SPECIMEN OF DEBENTURE.................................... B-1
EXHIBIT C UNDERWRITING AGREEMENT................................... C-1
iv
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a)..................................................... 5.3(a)
310(c)..................................................... Inapplicable
311(c)..................................................... Inapplicable
312(a)..................................................... 2.2(a)
312(b)..................................................... 2.2(b)
313........................................................ 2.3
314(a)..................................................... 2.4
314(b)..................................................... Inapplicable
314(c)..................................................... 2.5
314(d)..................................................... Inapplicable
314(f)..................................................... Inapplicable
315(a)..................................................... 3.9(b)
315(c)..................................................... 3.9(a)
315(d)..................................................... 3.9(a)
316(a)..................................................... Annex I
316(c)..................................................... 3.6(e)
- ---------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CITICORP CAPITAL X
___________, 199__
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of ___________, 199__, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Citicorp Capital X (the
"Trust"), a trust under the Delaware Business Trust Act pursuant to a
Declaration of Trust dated as of [________________] (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on [________________], for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
1
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Additional Interest" has the meaning set forth in the Indenture.
"Adjusted Treasury Rate" has the same meaning set forth in Section 4(d) of
Annex I.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
2
<PAGE>
"Authorized Officer" of a Person means any Person that is authorized to
legally bind such Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than Saturday, Sunday or any other day
on which banking institutions in New York City, are permitted or required by any
applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code ss. 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
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.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the "Closing Date" under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.1(a).
3
<PAGE>
"Common Securities Guarantee" means the guarantee agreement to be dated as
of ___________, 199__ of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Comparable Treasury Issue" has the meaning set forth in Section 4(d) of
Annex I.
"Comparable Treasury Price" has the meaning set forth in Section 4(d) of
Annex I.
"Corporate Trust Office" means the office of the Institutional Trustee at
which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at Rodney Square North, 9th Floor, 1100
North Market Street, Wilmington, Delaware 19890-0001.
"Coupon Rate" has the meaning set forth in Section 2(a) of Annex I.
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Citicorp, a Delaware corporation, or any
successor entity resulting from any consolidation, amalgamation, merger or other
business combination, in its capacity as issuer of the Debentures under the
Indenture.
"Debenture Trustee" means Wilmington Trust Company, a national banking
association duly organized and existing under
4
<PAGE>
the laws of the United States, as trustee under the Indenture until a successor
is appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the Debenture
Issuer under the Indenture to be held by the Institutional Trustee, a specimen
certificate for such series of Debentures being Exhibit B.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Dissolution Tax Opinion" has the meaning set forth in Annex I hereto.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of Default
(as defined in the Indenture) that has occurred and is continuing in respect of
the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
5
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"Indenture" means the Indenture dated as of December 17, 1996, among the
Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"Institutional Trustee" has the meaning set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"No Recognition Opinion" has the meaning set forth in Annex I hereto.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman, a Vice Chairman, a Vice President, the Chief Auditor,
the Treasurer, the Secretary or an Assistant Secretary of such Person. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Declaration shall include:
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(a) a statement that each officer signing the Certificate has read
the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 7.2.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning specified in Section 7.1(a).
"Preferred Securities Guarantee" means the guarantee agreement to be dated
as of ___________, 199__, of the Sponsor in respect of the Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
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"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement between the Trust, the
Debenture Issuer and the underwriters designated by the Regular Trustees with
respect to the offer and sale of the Preferred Securities.
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both of them.
"Quotation Agent" has the meaning set forth in Section 4(d) of Annex I.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Regulatory Capital Event" has the meaning set forth in Annex I hereto.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Institutional Trustee,
any officer within the Corporate Trust Office of the Institutional Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
successor rule or regulation.
"Securities" means the Common Securities and the Preferred Securities.
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"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Sponsor" means Citicorp, a Delaware corporation, or any successor entity
resulting from any merger, consolidation, amalgamation or other business
combination, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section 5.7.
"Successor Institutional Trustee" has the meaning set forth in Section
5.7.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding 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 accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person
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shall continue in office in accordance with the terms hereof, and all other
Persons who may from time to time be duly appointed, qualified and serving as
Trustees in accordance with the provisions hereof, and references herein to a
Trustee or the Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Property" means (i) the Debentures, (ii) any cash on deposit in, or
owing to, the Institutional Trustee Account and (iii) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held by the Institutional Trustee for the Trust pursuant to this Declaration.
"Underwriting Agreement" means the Underwriting Agreement for the offering
and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by ss.ss. 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as
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equity securities representing undivided beneficial interests in the assets of
the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Institutional
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Institutional Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Institutional Trustee. The Institutional Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in Lists
of Holders given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity) provided that the Institutional Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations under
ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after May 15 of each year, the Institutional Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by ss. 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by ss. 313 of the Trust Indenture Act. The Institutional Trustee shall
also comply with the requirements of ss. 313(d) of the Trust Indenture Act.
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SECTION 2.4 Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such documents, reports and information as
required by ss. 314 (if any) and the compliance certificate required by ss. 314
of the Trust Indenture Act in the form, in the manner and at the times required
by ss. 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the proportion
in liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.
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The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section 2.6(b), the Event
of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have
waived such Event of Default under the Declaration as provided below in
this Section 2.6(b), the Event of Default under the Declaration may only
be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of
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Default with respect to the Common Securities and its consequences until all
Events of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated, and until such Events of Default have been so
cured, waived or otherwise eliminated, the Institutional Trustee will be deemed
to be acting solely on behalf of the Holders of the Preferred Securities and
only the Holders of the Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
such waiver, any such default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee, at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(d) The Institutional Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities actually known to a Responsible Officer of the Institutional Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Event of Default as defined in the Indenture, not including any periods of grace
provided for
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therein and irrespective of the giving of any notice provided therein); provided
that, except for a default in the payment of principal of (or premium, if any)
or interest on any of the Debentures or in the payment of any sinking fund
installment established for the Debentures, the Institutional Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Institutional Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Securities.
(e) The Institutional Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.01(a) and 5.01(b) of the Indenture;
or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Citicorp Capital X" as such name may be modified from
time to time by the Regular Trustees following written notice to the Holders of
Securities. The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o
Citicorp, 399 Park Avenue, New York, New York 10043 Attn: Treasurer. On ten
Business Days written notice to the Holders of Securities, the Regular Trustees
may designate another principal office.
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SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary, or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and the
Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
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(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one
series of 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 Securities shall be
limited to a simultaneous issuance of both Preferred Securities and Common
Securities on each Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the Preferred Securities
in any State in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc. or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing upon notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by
the Sponsor, relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement and
Pricing Agreement providing for the sale of the Preferred
Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Securities; provided, however, that the Regular Trustees shall cause legal
title to the Debentures
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to be held of record in the name of the Institutional Trustee for the
benefit of the Holders of the Preferred Securities and the Holders of
Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Tax Event or Regulatory Capital Event;
provided that the Regular Trustees shall consult with the Sponsor and the
Institutional Trustee before taking or refraining from taking any
ministerial action in relation to a Tax Event or Regulatory Capital Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of ss. 316(c) of the Trust Indenture
Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
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(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities or to appoint a Paying Agent for the
Securities as provided in Section 7.2;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
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(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders in any material respect; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall not take any action that
is inconsistent with the purposes and functions of the Trust set forth in
Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Institutional Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.6
shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) on behalf of the Trust shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust not
to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
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(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under the Indenture, (C) exercise
any right to rescind or annul any declaration that the principal of all
the Debentures shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required unless the Trust shall have received an opinion
of a nationally recognized independent counsel experienced in such matters
to the effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes the
Trust will not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of record
in the name of the Institutional Trustee in trust for the benefit of the Holders
of the Securities. The right, title and interest of the Institutional Trustee to
the Debentures shall vest automatically in each Person who may hereafter be
appointed as Institutional Trustee in accordance with Section 5.7. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
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(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee, except as provided in
Section 7.2 hereof, on behalf of the Holders of the Securities and, upon
the receipt of payments of funds made in respect of the Debentures held by
the Institutional Trustee, deposit such funds into the Institutional
Trustee Account and make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the Institutional
Trustee Account in accordance with Section 6.1. Funds in the Institutional
Trustee Account shall be held uninvested until disbursed in accordance
with this Declaration. The Institutional Trustee Account shall be an
account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the rating assigned
to the Preferred Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the
occurrence of a Tax Event or a Regulatory Capital Event.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
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(e) The Institutional Trustee shall take any Legal Action which arises out
of or in connection with (i) an Event of Default of which a Responsible Officer
of the Institutional Trustee has actual knowledge or (ii) the Institutional
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act, and if such Institutional Trustee shall have failed to take such Legal
Action, the Holders of the Preferred Securities may take such Legal Action, to
the same extent as if such Holders of Preferred Securities held a principal
amount of Debentures equal to the liquidation amount of such Preferred
Securities, without first proceeding against the Institutional Trustee or the
Trust; provided however, that if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a Holder of Preferred Securities may directly institute a proceeding
for enforcement of payment to such Holder of the principal of or interest then
due on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder (a "Direct
Action") on or after the respective due date specified in the Debentures. In
connection with such Direct Action, the rights of the Holders of the Common
Securities will be subrogated to the rights of such Holder of Preferred
Securities to the extent of any payment made by the Issuer to such Holder of
Preferred Securities in such Direct Action. Except as provided in the preceding
sentences, the Holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures.
(f) The Institutional Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.7.
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(g) The Institutional Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) The Institutional Trustee shall be authorized to undertake any actions
set forth in ss. 317(a) of the Trust Indenture Act.
(i) Subject to this Section 3.8, the Institutional Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and in the Securities and no implied covenants shall be read
into this Declaration against the Institutional Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section 2.6)
of which a Responsible Officer of the Institutional Trustee has actual
knowledge, the Institutional Trustee shall exercise such of the rights and
powers vested in it by this Declaration, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for
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its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and in the Securities and the Institutional Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration and in
the Securities, and no implied covenants or obligations shall be
read into this Declaration against the Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; provided, however, that in the
case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Institutional Trustee, the Institutional Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Outstanding Preferred Securities relating to the
time, method and place of conducting any proceeding for any remedy
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available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Institutional Trustee under this Declaration and
the Trust Indenture Act and, to the extent applicable, Rule 3a-7 under the
Investment Company Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing
with the Sponsor. Money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the
Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise required
by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be
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liable for any default or misconduct of the Regular Trustees or the
Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with
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such advice or opinion, such counsel may be counsel to the Sponsor or any
of its Affiliates, and may include any of its employees. The Institutional
Trustee shall have the right at any time to seek instructions concerning
the administration of this Declaration from any court of competent
jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of
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the Securities, and the signature of the Institutional Trustee or its
agents alone shall be sufficient and effective to perform any such action
and no third party shall be required to inquire as to the authority of the
Institutional Trustee to so act or as to its compliance with any of the
terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Institutional Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration;
(xii) the Institutional Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration; and
(xiii) if (A) in performing its duties under this Declaration the
Institutional Trustee is required to decide between alternative courses of
action or (B) in construing any of the provisions in this Declaration, the
Institutional Trustee finds the same ambiguous or same inconsistent with
any other provisions contained herein or (C) the Institutional Trustee is
unsure of the application of any provision of this Declaration, then,
except as to any matter
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as to which the Preferred Securities Holders are entitled to vote under
the terms of this Declaration, the Institutional Trustee shall deliver a
notice to the Sponsor requesting written instructions of the Sponsor as to
the course of action to be taken. The Institutional Trustee shall take
such action, or refrain from taking such action, as the Institutional
Trustee shall be instructed in writing to take, or to refrain from taking,
by the Sponsor and shall be fully and conclusively protected in taking or
refraining from taking such action as so instructed; provided, however,
that the Institutional Trustee shall be under no duty to take any action
unless and until so instructed by the Sponsor; and provided, further, that
if the Institutional Trustee does not receive such instructions of the
Sponsor within ten Business Days after it has delivered such notice, or
such reasonably shorter period of time set forth in such notice (which to
the extent practicable shall not be fewer than two Business days), it may,
but shall be under no duty to, take or refrain from taking any such action
not inconsistent with this Declaration as it shall deem advisable and in
the best interest of the Securities Holders, in which event the
Institutional Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct.
(b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Institutional Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than Section
5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Regular Trustees or the Institutional Trustee described in this
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Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of
ss.3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is authorized
to execute on behalf of the Trust any documents that the Regular Trustees have
the power and authority to execute pursuant to Section 3.6; provided that, the
registration statement referred to in Section 3.6(b)(i), including any
amendments thereto, shall be signed by a majority of or, if there are less than
three, all of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall dissolve on February 15, 2052.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees and without the consent of
the Holders of the Securities, the Delaware Trustee or the Institutional
Trustee,
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consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State; provided that:
(i) if the Trust is not the surviving entity, such successor entity
(the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same as
the Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed or quoted, or any Successor Securities will be so upon notice of
issuance, on any national securities exchange or other organization on
which the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of counsel to the Trust
to the effect that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Preferred Securities Guarantee and the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger or replacement would cause the Trust or
the Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
SECTION 3.16 Limitation to Trust Property.
All payments made by the Institutional Trustee or a Paying Agent in
respect of the Securities shall be made only from the income and proceeds from
the Trust Property and only to the
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extent that there shall be sufficient income or proceeds from the Trust Property
to enable the Institutional Trustee or Paying Agent to make payments in
accordance with the terms hereof. Each Holder, by its acceptance of a Security,
agrees that it will look solely to the income and proceeds from the Trust
Property to the extent available for distribution to it as herein provided and
that the Trustees shall not be personally liable to it for any amount
distributable in respect of any Security or for any other liability in respect
of any Security; provided that this Section 3.16 does not limit the liability of
the Trustees expressly set forth elsewhere in this Declaration or, in the case
of the Institutional Trustee, in the Trust Indenture Act.
SECTION 3.17 Compensation and Fees.
(a) The Sponsor agrees:
(i) to pay the Institutional Trustee from time to time compensation
for all services rendered by the Institutional Trustee hereunder in
accordance with a separate fee agreement between the Sponsor and the
Institutional Trustee (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); and
(ii) except as otherwise expressly provided herein, to reimburse the
Institutional Trustee upon request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the
Institutional Trustee in accordance with any provision of this Declaration
(including the reasonable compensation and the expenses and disbursements
of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence, bad faith or willful
misconduct.
(b) The provisions of this Section shall survive the termination of this
Declaration.
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ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust at the same time as the Preferred Securities are
sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and
to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
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(e) to negotiate the terms of the Underwriting Agreement and Pricing
Agreement providing for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be three (3), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities; provided, however, that, the
number of Trustees shall in no event be less than two (2); provided
further that (1) one Trustee shall be the Delaware Trustee; (2) there
shall be at least one Trustee who is an employee or officer of, or is
affiliated with the Sponsor (a "Regular Trustee"); and (3) one Trustee
shall be the Institutional Trustee for so long as this Declaration is
required to qualify as an indenture under the Trust Indenture Act, and
such Trustee may also serve as Delaware Trustee if it meets the applicable
requirements.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
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provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a financial institution organized and doing business under
the laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 5.3(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Institutional Trustee shall cease to be eligible to
so act under Section 5.3(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 5.7(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of ss. 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in all
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respects comply with the provisions of ss. 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be:
Wilmington Trust Company
SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 Regular Trustees.
The initial Regular Trustees shall be:
Peter Gallant
John F. Rice
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by a majority
of or, if there are less than three, all of the Regular Trustees; and
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(c) a Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purposes of signing any documents which the Regular Trustees have power
and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Wilmington Trust Company
SECTION 5.7 Appointment, Removal and Resignation of
Trustees.
(a) Subject to Section 5.7(b), Trustees may be appointed or removed
without cause at any time except during an Event of Default:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities.
(b)(i) The Trustee that acts as Institutional Trustee shall not be removed
in accordance with Section 5.7(a) until a successor Trustee possessing the
qualifications to act as Institutional Trustee under Section 5.3 (a "Successor
Institutional Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Institutional Trustee and
delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with this Section 5.7(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections
5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such Successor
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Delaware Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the Sponsor
and the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Delaware Trustee or Successor Institutional Trustee
as the case may be if the Institutional Trustee or the Delaware Trustee delivers
an instrument of resignation in accordance with this Section 5.7.
(e) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.7 within 60 days after delivery of an instrument of resignation or removal,
the Institutional Trustee or Delaware Trustee resigning or being
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removed, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.7, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.10 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
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Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
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SECTION 5.12 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
SECTION 5.13 Co-Trustees and Separate Trustee.
(a) Unless an Event of Default shall have occurred and be continuing, at
any time or times for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property may
at the time be located, the Sponsor and the Institutional Trustee shall have
power to appoint, and upon the written request of the Institutional Trustee, the
Sponsor shall for such purpose join with the Institutional Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Institutional Trustee
either to act as co-trustee, jointly with the Institutional Trustee, of all or
any part of such Trust Property, or to act as separate trustee of any such
property, in either case with such powers as may be provided in the instrument
of appointment, and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section 5.13. If the Sponsor does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case of an Event of Default has occurred and is continuing, the Institutional
Trustee alone shall have power to make such appointment.
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(b) Should any written instrument from the Sponsor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Sponsor.
(c) Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(i) The Securities shall be executed and delivered and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees designated for such purpose
hereunder, shall be exercised, solely by such Trustees.
(ii) The rights, powers, duties and obligations hereby conferred or
imposed upon the Institutional Trustee in respect of any property covered
by such appointment shall be conferred or imposed upon and exercised or
performed by the Institutional Trustee or by the Institutional Trustee and
such co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any particular act
is to be performed, the Institutional Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such co-trustee
or separate trustee.
(iii) The Institutional Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Sponsor, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section 5.13, and, in case an Event of Default has
occurred and is continuing, the Institutional Trustee shall have power to
accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Sponsor. Upon the written request
of the Institutional Trustee, the Sponsor shall join with the
Institutional Trustee in the execution, delivery and performance of all
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instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner provided in this
Section 5.13.
(iv) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Institutional Trustee.
(v) The Institutional Trustee shall not be liable by reason of any
act or omission of a co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the Institutional Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in accordance with
the applicable terms of the relevant Holder's Securities. Distributions shall be
made on the Preferred Securities and the Common Securities in accordance with
the preferences set forth in their respective terms. If and to the extent that
the Debenture Issuer makes a payment of interest (including Compounded Interest
(as defined in the Indenture) and Additional Interest), premium and/or principal
on the Debentures held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class of
preferred securities representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in Annex I (the "Preferred
Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Common Securities.") The Trust shall issue no securities
or other interests in the assets of the Trust other than the Preferred
Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a Regular
Trustee. Such signature shall be the manual or facsimile signature of any
present or any future Regular Trustee. In case any Regular Trustee of the Trust
who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) A Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Institutional Trustee. The signature
shall be conclusive
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evidence that the Security has been authenticated under this Declaration.
The Institutional Trustee may appoint an authenticating agent acceptable
to the Trust to authenticate Securities. An authenticating agent may
authenticate Securities whenever the Institutional Trustee may do so. Each
reference in this Declaration to authentication by the Institutional Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Institutional Trustee to deal with the Sponsor or an Affiliate.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration and
the receipt of the consideration therefor, the Securities so issued shall be
deemed to be validly issued, fully paid and non-assessable.
(f) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
SECTION 7.2 Paying Agent.
The Trust shall appoint an agent (the "Paying Agent"), which shall
initially be Citibank, N.A., which shall make Distributions to the Securities
Holders from the Institutional Trustee Account and shall report the amounts of
such Distributions to the Regular Trustees and the Institutional Trustee. Any
Paying Agent shall have the revocable power to withdraw funds from the
Institutional Trustee Account for the purpose of making the Distributions. The
Institutional Trustee shall be entitled to rely upon a certificate of the Paying
Agent stating the amount of such funds so to be withdrawn and that the same are
to be applied by the Paying Agent in accordance with this Section 7.2. The
Regular Trustees may revoke such power and remove the Paying Agent in their sole
discretion. The Paying
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Agent may choose any co-paying agent that is acceptable to the Regular Trustees.
The Paying Agent shall be permitted to resign upon 30 days' notice to the
Regular Trustees. In the event of the removal or resignation of the Paying
Agent, the Regular Trustees shall appoint a successor that is reasonably
acceptable to the Institutional Trustee to act as Paying Agent (which shall be a
bank, trust company or an Affiliate of the Sponsor). The Regular Trustee shall
cause such successor Paying Agent or any additional Paying Agent appointed to
execute and deliver to the Trustees an instrument in which such Paying Agent or
additional Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Securities Holders in trust for the benefit of the
Securities Holders entitled thereto until such sums shall be paid to such
Securities Holders. The Paying Agent shall return all unclaimed funds to the
Institutional Trustee and upon resignation or removal of a Paying Agent such
Paying Agent also shall return all funds in its possession to the Institutional
Trustee. The provisions of Sections 3.8(d), 3.9, 3.10 and 3.17 shall apply to
the Paying Agent appointed hereunder, and the Paying Agent shall be bound by the
requirements with respect to paying agents of securities issued pursuant to the
Trust Indenture Act. Any reference in this Declaration to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust.
(a) The Trust shall dissolve:
(i) on February 15, 2052, the expiration term of the Trust;
(ii) upon the bankruptcy of the Sponsor;
(iii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; the consent of at least a majority
in liquidation amount of the Securities affected thereby voting together
as a single
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class to file a certificate of cancellation with respect to the Trust or
the revocation of the Sponsor's charter and the expiration of 90 days
after the date of revocation without a reinstatement thereof;
(iv) upon the election by the Regular Trustees to dissolve the
Trust, following the occurrence of a Tax Event or a Regulatory Capital
Event in accordance with the terms of the Securities and the distribution
of all of the Debentures endorsed thereon to the Holders of Securities in
exchange for all of the Securities;
(v) upon the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor or the Trust;
(vi) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Securities;
or
(vii) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a), and upon the completion of the winding up of the Trust, one
of the Trustees (each of whom is hereby authorized to take such action) shall
file a certificate of cancellation with the Secretary of State of the State of
Delaware terminating the Trust.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. Any
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transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) The Sponsor may not transfer the Common Securities.
SECTION 9.2 Transfer of Certificates.
(a) The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Trust or the Sponsor
may reasonably require) in respect of any tax or other government charges that
may be imposed in relation to it. Upon surrender for registration of transfer of
any Certificate, the Regular Trustees shall cause one or more new Certificates
to be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
(b) Upon receipt by the Institutional Trustee of a Definitive Preferred
Security Certificate, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Institutional Trustee, requesting transfer
of such Definitive Preferred Security Certificate for a beneficial interest in a
Global Certificate, the Institutional Trustee shall cancel such Definitive
Preferred Security Certificate and cause, or direct the Clearing Agency to
cause, the aggregate number of Preferred Securities represented by the
appropriate Global Certificate to be increased accordingly. If no Global
Certificates are then outstanding, the Trust shall issue and the Institutional
Trustee shall authenticate, upon written order of
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any Regular Trustee, an appropriate number of Preferred Securities in global
form.
(c) Upon receipt by the Institutional Trustee from the Clearing Agency or
its nominee on behalf of any Person having a beneficial interest in a Global
Certificate of written instructions or such other form of instructions as is
customary for the Clearing Agency or the person designated by the Clearing
Agency, requesting transfer of a beneficial interest in a Global Certificate for
a Definitive Preferred Security Certificate, then the Institutional Trustee or
the securities custodian, at the direction of the Institutional Trustee, will
cause, in accordance with the standing instructions and procedures existing
between the Clearing Agency and the securities custodian, the aggregate
principal amount of the Global Certificate to be reduced on its books and
records and, following such reduction, the Trust will execute and the
Institutional Trustee will authenticate and deliver to the transferee a
Definitive Preferred Security Certificate.
Definitive Preferred Security Certificates issued in exchange for a
beneficial interest in a Global Certificate shall be registered in such names
and in such authorized denominations as the Clearing Agency, pursuant to
instructions from its Clearing Agency Participants or indirect participants or
otherwise, shall instruct the Institutional Trustee. The Institutional Trustee
shall deliver such Preferred Securities to the persons in whose names such
Preferred Securities are so registered in accordance with the instructions of
the Clearing Agency.
(d) Notwithstanding any other provisions of this Declaration, a Global
Certificate may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or another nominee of the Clearing Agency or by
the Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the
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Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities, the
Preferred Securities Certificates, on original issuance, will be issued in the
form of one or more, fully registered, global Preferred Security Certificates
(each a "Global Certificate"), to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Global Certificates shall initially
be registered on the books and records of the Trust in the name of Cede & Co.,
the nominee of DTC, and no Preferred Security Beneficial Owner will receive a
definitive Preferred Security Certificate representing such Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 9.7. Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
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(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants.
Clearing Agency Participants shall have no rights under this Declaration
with respect to any Global Certificate held on their behalf by the Clearing
Agency or by the Institutional Trustee as the custodian of the Clearing Agency
or under such Global Certificate, and the Clearing Agency may be treated by the
Trust, the Institutional Trustee and any agent of the Trust or the Institutional
Trustee as the absolute owner of such Global Certificate for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Trust, the Institutional Trustee or any agent of the Trust or the Institutional
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Clearing Agency or impair, as between the
Clearing Agency and its Clearing Agency Participants, the operation of customary
practices of such Clearing Agency governing the exercise of the rights of a
holder of a beneficial interest in any Global Certificate.
At such time as all beneficial interests in a Global Certificate have
either been exchanged for Definitive Preferred Security Certificates to the
extent permitted by this Declaration or redeemed, repurchased or canceled in
accordance with the terms of this Declaration, such Global Certificate shall be
returned to the Clearing Agency for cancellation or retained and canceled by the
Institutional Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Certificate is exchanged for Definitive Preferred Security
Certificates, or if Definitive Preferred Security Certificates are exchanged for
a beneficial interest in a Global Certificate, Preferred Securities represented
by such Global Certificate shall be reduced or increased and an adjustment shall
be made on the books and records of the Institutional Trustee (if it is then the
securities custodian for such Global Certificate) with respect to
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such Global Certificate, by the Institutional Trustee or the securities
custodian, to reflect such reduction or increase.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security Holders
is required under this Declaration, unless and until Definitive Preferred
Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
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(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Preferred Security Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the instructions
of the Clearing Agency. Neither the Trustees nor the Trust shall be liable
for any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on, said
instructions of the Clearing Agency. The Definitive Preferred Security
Certificates shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the Regular Trustees,
as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends
or endorsements as the Regular Trustees may deem appropriate, or as may be
required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which Preferred Securities may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless,
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that
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may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of an ownership
interest in the relevant Securities, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
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ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Debenture Issuer shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders of the
Securities shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or
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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 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees and expenses), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo
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contendere or its equivalent, shall not, of itself, create a presumption
that the Company Indemnified Person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in
its favor by reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees and expenses) actually
and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the Trust
unless and only to the extent that the Court of Chancery of Delaware or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court)
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shall be made by the Debenture Issuer only as authorized in the specific
case upon a determination that indemnification of the Company Indemnified
Person is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority vote
of a quorum consisting of such Regular Trustees who were not parties to
such action, suit or proceeding, (2) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion, or (3) by the
Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by the Debenture Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) by the
Debenture Issuer that, based upon the facts known to the Regular Trustees,
counsel or the Debenture Issuer at the time such determination is made,
such Company Indemnified Person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to the best interests
of the Trust, or, with respect to any criminal proceeding, that such
Company Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in instances
where the Regular Trustees, independent legal counsel or Debenture Issuer
reasonably determine that such person deliberately breached his duty to
the Trust or its Common or Preferred Security Holders.
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(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the
Debenture Issuer or Preferred Security Holders of the Trust or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office. All rights to indemnification under
this Section 10.4(a) shall be deemed to be provided by a contract between
the Debenture Issuer and each Company Indemnified Person who serves in
such capacity at any time while this Section 10.4(a) is in effect. Any
repeal or modification of this Section 10.4(a) shall not affect any rights
or obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not
the Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or is
or was serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in the
same position under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or
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ratified, continue as to a person who has ceased to be a Company
Indemnified Person and shall inure to the benefit of the heirs, executors
and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense including taxes (other
than taxes based on the income of such Fiduciary Indemnified Person) incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration or the trust or trusts hereunder,
including the costs and expenses (including reasonable legal fees and expenses)
of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to
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recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Institutional Trustee may engage or
be interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year,
or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail, each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes.
(b) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(c) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority, an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law,
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and any other annual income tax returns required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
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ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may only be amended by a written
instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is
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permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without the
consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders of
a Majority in liquidation amount of the Common Securities and;
(f) the rights of the Holders of the Common Securities under Article V to
increase or decrease the number of, and appoint and remove Trustees shall not be
amended without the consent of the Holders of a Majority in liquidation amount
of the Common Securities; and
(g) Sections 12.1(a)(ii) and 12.1(b) shall not be amended without the
consent of the Institutional Trustee and Section 12.1(a)(iii) shall not be
amended without the consent of the Delaware Trustee; and
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(h) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor, provided such amendment does not have a material adverse effect
on the rights, preferences or privileges of the Holders;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) to modify, eliminate or add to any provision of the Declaration
to such extent as may be necessary to eliminate or reduce the adverse
effects resulting from the occurrence of a Tax Event or Regulatory Capital
Event, provided such amendment does not have a material adverse effect on
the rights, preferences or privileges of the Holders.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the 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
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shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Security Certificates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be counted for purposes
of determining whether the required percentage set forth in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least seven days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at
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a meeting. No proxy shall be valid after the expiration of 11 months from
the date thereof unless otherwise provided in the proxy. Every proxy shall
be revocable at the pleasure of the Holder of Securities executing it.
Except as otherwise provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the General Corporation
Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional
Trustee.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at
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the time of the Successor Institutional Trustee's acceptance of its appointment
as Institutional Trustee that:
(a) the Institutional Trustee is a Delaware banking corporation with
trust powers and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Institutional Trustee. The Declaration
has been duly executed and delivered by the Institutional Trustee, and it
constitutes a legal, valid and binding obligation of the Institutional
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in
equity or at law);
(c) the execution, delivery and performance of this Declaration by
the Institutional Trustee does not conflict with or constitute a breach of
the charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with
or notice to, any Delaware State or federal banking authority is required
for the execution, delivery or performance by the Institutional Trustee,
of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware
Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
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(a) The Delaware Trustee is duly organized, validly existing and in
good standing under the laws of the State of Delaware, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with
or notice to, any federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee, of this Declaration.
(d) The Delaware Trustee is a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
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Citicorp Capital X
c/o Citicorp
399 Park Avenue
New York, New York 10043
Attention: Treasurer
Telecopy: (212) 527-2765
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of
to the Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Department
Telecopy: (302) 651-1576
(c) if given to the Institutional Trustee, at the Institutional
Trustee's mailing address set forth below (or such other address as the
Institutional Trustee may give notice of to the Holders of the
Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Trustee
Administration
Telecopy: (302) 651-1576
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(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
Citicorp
399 Park Avenue
New York, New York 10043
Attention: Treasurer
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be governed
by and interpreted in accordance with the laws of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to the
principles of conflict of laws of the State of Delaware or any other
jurisdiction that would call for the application of the law of any jurisdiction
other than the State of Delaware; provided, however, that there shall not be
applicable to the Trust, the Trustees or this Declaration any provision of the
laws (statutory or common) of the State of Delaware pertaining to trusts that
relate to or regulate, in a manner inconsistent with the terms hereof (a) the
filing with any court or governmental body or agency of trustee accounts or
schedules of trustee fees and charges, (b) affirmative requirements to post
bonds for trustees, officers, agents or employees of a trust, (c) the necessity
for obtaining court or other governmental approval concerning the acquisition,
holding or disposition of real or personal property, (d) fees or other sums
payable to trustees, officers, agents or employees of a trust, (e) the
allocation of receipts and expenditures to income or principal, (f) restrictions
or
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limitations on the permissible nature, amount or concentration of trust
investments or requirements relating to the titling, storage or other manner of
holding or investing trust assets or (g) the establishment of fiduciary or other
standards of responsibility or limitations on the acts or powers of trustees
that are inconsistent with the limitations or liabilities or authorities and
powers of the Trustees as set forth or referenced in this Declaration. Section
3540 of Title 12 of the Delaware Code shall not apply to the Trust.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
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SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
__________________________________
Peter Gallant, as Regular Trustee
__________________________________
John F. Rice, as Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:_________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By:_________________________
Name:
Title:
CITICORP,
as Sponsor
By:_________________________
Name: John F. Rice
Title: Vice President
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ANNEX I
TERMS OF
[____]% CAPITAL SECURITIES
[____]% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of ___________, 199__ (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities ("Preferred Securities"
or "Capital Securities") and the Common Securities are set out below (each
capitalized term used but not defined herein has the meaning set forth in the
Declaration or, if not defined in such Declaration, as defined in the Prospectus
referred to below):
1. Designation and Number.
(a) Preferred Securities. ,000 Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of ,000,000
dollars ($ ,000,000) and a liquidation amount with respect to the assets of the
Trust of $1,000 per preferred security, are hereby designated for the purposes
of identification only as " % Capital Securities" (the "Preferred Securities").
The Preferred Security Certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange on
which the Preferred Securities are listed.
(b) Common Securities. Common Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of ,000 dollars ($
,000) and a liquidation amount with respect to the assets of the Trust of $1,000
per common security, are hereby designated for the purposes of identification
only as " % Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and
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additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate per
annum of % (the "Coupon Rate") of the stated liquidation amount of $1,000 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears for more than one
semiannual Distribution period will bear additional distributions thereon
compounded semiannually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full semiannual
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full semiannual Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 180-day semiannual Distribution period.
(b) Distributions on the Securities will be cumulative, will accrue from
___________, 199__, and will be payable semiannually in arrears, on February 15
and August 15 of each year, commencing on ,199 , except as otherwise described
below. The Debenture Issuer has the right under the Indenture to defer payments
of interest by extending the interest payment period from time to time on the
Debentures for a period not exceeding 10 consecutive semiannual Distribution
periods, including the first such semiannual Distribution period during such
period (each an "Extension Period"), during which Extension Period no interest
shall be due and payable on the Debentures, provided that no Extension Period
shall extend beyond the maturity date of the Debentures. As a consequence of
such deferral, Distributions will also be deferred. Despite such deferral,
semiannual Distributions will continue to accrue with additional distributions
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded semiannually during
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any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further extensions within such Extension Period, may
not exceed 10 consecutive semiannual Distribution periods, including the first
semiannual Distribution period during such Extension Period, or extend beyond
the maturity date of the Debentures. Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust on the relevant record
dates. While the Preferred Securities remain in book-entry only form, the
relevant record dates shall be one Business Day prior to the relevant payment
dates which payment dates correspond to the interest payment dates on the
Debentures. Subject to any applicable laws and regulations and the provisions of
the Declaration, each such payment in respect of the Preferred Securities will
be made as described under the heading "Description of the Preferred Securities
- -- Book-Entry Only Issuance -- The Depository Trust Company" in the Prospectus
Supplement dated __________, 199_, to the Prospectus dated December 17, 1996
(together, the "Prospectus"), of the Trust included in the Registration
Statement on Form S-3 of the Sponsor, the Trust and certain other business
trusts. The relevant record dates for the Common Securities shall be the same
record date as for the Preferred Securities. If the Preferred Securities shall
not continue to remain in book-entry only form, the relevant record dates for
the Preferred Securities shall conform to the rules of any securities exchange
on which the securities are listed and, if none, shall be selected by the
Regular Trustees, which dates shall be at least one Business Day but not more
than ten Business Days before the relevant payment dates, which payment dates
correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, will cease
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to be payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable to
the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the Securities is not a Business Day,
then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay).
(d) If at any time while the Institutional Trustee is the Holder of any
Debentures, the Debenture Issuer is required to pay any Additional Interest to
the Trust or the Institutional Trustee under the Debentures, the Payment Amount
with respect to Distributions on the Securities pursuant to Section 6.1 of the
Declaration shall include any such Additional Interest.
(e) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up or
liquidation of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, an amount equal to the aggregate of the stated liquidation amount of
$1,000 per Security plus accrued and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"), unless, in
connection with such dissolution, winding-up or termination, Debentures in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities
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in exchange for such Securities, after paying or making reasonable provision to
pay all claims and obligations of the Trust in accordance with Section 3808(e)
of the Business Trust Act.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part, whether at
maturity or upon redemption (either at the option of the Debenture Issuer at any
time on or after February 15, 200 or pursuant to a Tax Event or Regulatory
Capital Event at any time prior to February 15, 200 ), the proceeds from such
repayment or redemption shall be simultaneously applied to redeem, at the
Securities Redemption Price, Securities having an aggregate liquidation amount
equal to the aggregate principal amount of the Debentures so repaid or redeemed;
provided that holders will be given not less than 30 nor more than 60 days
notice of such redemption of Securities.
(b) The "Securities Redemption Price" for each $1,000 in stated
liquidation amount of Securities shall be:
(i) in the case of redemption of the Securities upon the maturity of
the Debentures, the liquidation amount of $1,000 per Security, plus
accrued and unpaid Distributions thereon to but excluding the date of
redemption; and
(ii) in the case of redemption of the Securities upon any redemption
of the Debentures by the Debenture Issuer (either at the option of the
Debenture Issuer at any time on or after February 15, 200 or pursuant to a
Tax Event or Regulatory Capital Event at any time prior to February 15,
200 ), equal to the applicable Redemption Price (as defined in the
Indenture) payable with respect to each $1,000 principal amount of
Debentures so redeemed in accordance with the terms of the Debentures.
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If, at any time, a Regulatory Capital Event shall occur and be continuing,
the Sponsor may (i) cause the Trust to be dissolved, with the result that after
satisfaction of liabilities to creditors, if any, Debentures with an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, the Securities, would be
distributed to the Holders of the Securities in liquidation of such holders'
interests in the Trust on a pro rata basis within 90 days following the
occurrence of such Regulatory Capital Event or (ii) within 90 days following the
occurrence of such Regulatory Capital Event, redeem the Debentures, in whole or
in part, upon not less than 30 nor more than 60 days' notice, for cash, with the
result that, following such redemption, the Securities will be redeemed by the
Trust at the Securities Redemption Price; provided, however, that if at the time
there is available to the Sponsor of the Trust the opportunity to eliminate
within such 90- day period, the Regulatory Capital Event by taking some
ministerial action, such as filing a form or making an election or pursuing some
other similar reasonable measure that has no adverse effect on the Trust, the
Sponsor or the holders of the Securities, then the Sponsor or the Trust will
pursue such measure in lieu of distribution or redemption of the Debentures.
(c) "Regulatory Capital Event" means a determination by the Sponsor, based
on an opinion of counsel experienced in such matters (who may be an employee of
the Sponsor or any of its affiliates), that, as a result of any amendment to,
clarification of or change (including any announced prospective change) in
applicable laws or regulations or official interpretations thereof or policies
with respect thereto, which amendment, clarification or change is effective
after the date of this Prospectus Supplement, there is more than an
insubstantial risk that the Preferred Securities will no longer constitute Tier
1 capital of the Sponsor (or its equivalent) for purposes of the capital
adequacy guidelines of the Board of Governors of the Federal Reserve System or
its successor as the Sponsor's primary federal banking regulator.
"Tax Event" means the Regular Trustees shall have received an opinion (a
"Dissolution Tax Opinion") of a nationally recognized independent tax counsel
experienced in such matters
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("Tax Counsel") to the effect that, as a result of (a) any amendment to,
clarification of or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after such date), there is more than an
insubstantial risk that (i) the Trust would be subject to United States federal
income tax with respect to income accrued or received on the Debentures, (ii)
interest payable to the Trust on the Debentures would not be deductible by the
Sponsor for United States federal income tax purposes or (iii) the Trust would
be subject to more than a de minimis amount of other taxes, duties or other
governmental charges, provided that any such change, clarification or amendment
becomes effective on or after the date of this Prospectus Supplement.
If, at any time, a Tax Event shall occur and be continuing, the Sponsor
may cause the Trust to be dissolved, with the result that after satisfaction of
liabilities to creditors, if any, Debentures with an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the distribution rate of, and accrued and unpaid interest equal to
accrued and unpaid distributions on, the Securities, would be distributed to the
holders of the Securities in liquidation of such holders' interests in the Trust
on a Pro Rata basis within 90 days following the occurrence of such Tax Event;
provided that such dissolution and distribution shall be conditioned on (i) the
Regular Trustees' receipt of an opinion of Tax Counsel (a "No Recognition
Opinion"), which opinion may rely on published revenue rulings of the Internal
Revenue Service, to the effect that the holders of the Securities will not
recognize any gain or loss for United States federal income tax purposes as a
result of such dissolution and distribution of Debentures and (ii) the Sponsor
being unable to avoid such Tax Event within such 90-day period by taking some
ministerial action or pursuing some other reasonable measure that will have no
adverse effect on the Trust, the Sponsor or the Holders of the Securities.
Furthermore, if after receipt of a Dissolution Tax Opinion by the Regular
Trustees (i) the Sponsor has received an opinion (a
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"Redemption Tax Opinion") of Tax Counsel that, as a result of a Tax Event, there
is more than an insubstantial risk that the Sponsor would be precluded from
deducting the interest on the Debentures for United States federal income tax
purposes, even after the Debentures were distributed to the holders of
Securities in liquidation of such Holders' interests in the Trust as described
above, or (ii) the Regular Trustees shall have been informed by such Tax Counsel
that it cannot deliver a No Recognition Opinion to the Trust, the Sponsor shall
have the right, within 90 days following the occurrence of such Tax Event, to
redeem the Debentures, in whole or in part, upon not less than 30 nor more than
60 days' notice, for cash, with the result that, following such redemption, the
Securities will be redeemed by the Trust at the Securities Redemption Price;
provided, however, that if at the time there is available to the Sponsor or the
Trust the opportunity to eliminate, within such 90-day period, the Tax Event by
taking some ministerial action, such as filing a form or making an election or
pursuing some other similar reasonable measure that has no adverse effect on the
Trust, the Sponsor or the Holders of the Securities, then the Sponsor or the
Trust will pursue such measure in lieu of redemption of the Debentures.
(d) In the case of an optional redemption, if fewer than all the
outstanding Securities are to be so redeemed, the Common Securities and the
Preferred Securities will be redeemed Pro Rata and the Preferred Securities to
be redeemed will be as described in Section 4(g)(ii) below.
(e) On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) The Depository Trust Company (the
"Depository") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Preferred Securities, will receive a registered
global certificate or certificates representing the Debentures to be delivered
upon such distribution and any certificates representing Securities, except for
certificates representing Preferred Securities held by the Depository or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Debentures having an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the Coupon Rate of, and accrued and unpaid interest equal to
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accrued and unpaid Distributions on such Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or reissue.
(f) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or before the date of
redemption.
(g) The procedure with respect to redemptions and distributions of
Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities
to be redeemed or exchanged not fewer than 30 nor more than 60 days before
the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 4(g)(i), a
Redemption/ Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of
record by the Depository or its nominee (or any successor Clearing Agency
or its nominee), the distribution of the proceeds of such redemption will
be made to each Clearing Agency Participant (or Person on whose behalf
such nominee
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holds such securities) in accordance with the procedures applied by such
agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are to be redeemed as set out in this Section 4 (which notice
will be irrevocable), then (A) while the Preferred Securities are in
book-entry only form, with respect to the Preferred Securities, by 12:00
noon, New York City time, on the redemption date, provided that the
Debenture Issuer has paid the Institutional Trustee a sufficient amount of
cash in connection with the related redemption or maturity of the
Debentures, the Institutional Trustee will deposit irrevocably with the
Depository or its nominee (or successor Clearing Agency or its nominee)
funds sufficient to pay the applicable Securities Redemption Price with
respect to the Preferred Securities and will give the Depository
irrevocable instructions and authority to pay the Securities Redemption
Price to the Holders of the Preferred Securities, and (B) with respect to
Preferred Securities issued in definitive form and Common Securities,
provided that the Debenture Issuer has paid the Institutional Trustee a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Institutional Trustee will pay the
relevant Securities Redemption Price to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books
and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds deposited
as required, if applicable, then immediately prior to the close of
business on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue on the Securities so called
for redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such Securities
to receive the Securities Redemption Price, but without interest on such
Securities Redemption Price. Neither the Regular Trustees nor the Trust
shall be required to register or cause to be registered the transfer of
any Securities that have been so called for redemption. If any date fixed
for redemption of Securities is not a Business Day, then payment of the
Securities Redemption Price payable
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on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Securities Redemption Price in respect of
any Securities is improperly withheld or refused and not paid either by
the Institutional Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the actual date of
payment, in which case the Securities Redemption Price shall include such
additional accrued Distributions.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, the Depository or its nominee (or any successor Clearing
Agency or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holder
thereof, and (B) in respect of the Common Securities to the Holder
thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws and banking laws),
provided the acquiror is not the Holder of the Common Securities or the
obligor under the Indenture, the Sponsor or any of its subsidiaries may at
any time and from time to time purchase outstanding Preferred Securities
by tender, in the open market or by private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise required
by law and the Declaration, the Holders of the Preferred Securities will have no
voting rights.
(b) Subject to the requirements set forth in this paragraph, the Holders
of a majority in aggregate liquidation amount of the Preferred Securities,
voting separately as a class
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may direct the time, method, and place of conducting any proceeding for any
remedy available to the Institutional Trustee, or exercise any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee, as holder of the Debentures, to (i)
exercise the remedies available under the Indenture, conduct any proceeding for
any remedy available to the Debenture Trustee, or exercise any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii) waive
any past default and its consequences that is waivable under Section 2.6 of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable, provided, however,
that, where a consent under the Indenture would require the consent or act of
the Holders of greater than a majority of the Holders in principal amount of
Debentures affected thereby, (a "Super Majority"), the Institutional Trustee may
only give such consent or take such action at the written direction of the
Holders of at least the proportion in liquidation amount of the Preferred
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. The Institutional Trustee shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Preferred Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Institutional Trustee
or the Debenture Trustee as set forth above, the Institutional Trustee shall not
take any action in accordance with the directions of the Holders of the
Preferred Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Institutional Trustee fails to
enforce its rights under the Declaration, any Holder of Preferred Securities may
institute a legal proceeding directly against any person to enforce the
Institutional Trustee's rights under the Declaration without first instituting a
legal proceeding against the Institutional Trustee or any other person. If a
Declaration Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay interest or principal
on the Debentures on the date such interest or principal is otherwise payable
(or in the case of redemption, on the redemption date), then a holder of
Preferred Securities
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may directly institute a proceeding for enforcement of payment to such Holder of
the principal of or interest on the Debentures having a principal amount equal
to the aggregate liquidation amount of the Preferred Securities of such holder
(a "Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the holders of
the Common Securities Holder will be subrogated to the rights of such holder of
Preferred Securities to the extent of any payment made by the Issuer to such
holder of Preferred Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall
not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding, unless all of the Preferred
Securities are owned by the sponsor or any such Affiliate.
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6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c), 7(a) and 8 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace any Trustee
or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the Event of
Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 2.6 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable, provided that, where a consent or
action under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Debentures affected thereby (a
"Super Majority"), the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Pursuant to this Section 6(c), the Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Institutional Trustee or the
Debenture Trustee as set forth above, the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Common
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Securities under this paragraph unless the Institutional Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Institutional Trustee fails to enforce
its rights under the Declaration, any Holder of Common Securities may institute
a legal proceeding directly against any Person to enforce the Institutional
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given at
a separate meeting of Holders of Common Securities convened for such purpose, at
a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the Declaration,
if any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of any or all of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single
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class will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities affected thereby; provided, that, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the Preferred Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of a
Majority in liquidation amount of such class of Securities.
(b) In the event the consent of the Institutional Trustee as the holder of
the Debentures is required under the Indenture with respect to any amendment,
modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where the taking of any such action under the
Indenture would require the consent of the holders of greater than a majority in
aggregate principal amount of the Debentures (a "Super Majority"), the
Institutional Trustee may only give such consent at the direction of the Holders
of at least the proportion in liquidation amount of the Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding; provided, further, that where the taking of any such
action under the Indenture would require the consent of every holder of the
Debentures, the consent of all holders of Securities shall be required;
provided, further, that the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Securities under this
Section 7(b) unless the Institutional Trustee has obtained an opinion of
nationally recognized independent tax counsel in such matters to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
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8. Pro Rata.
A reference in these terms of the Securities to any payment, distribution
or treatment as being "Pro Rata" shall mean pro rata to each Holder of
Securities according to the aggregate liquidation amount of the Securities held
by the relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu with the Common Securities and
payment thereon shall be made Pro Rata with the Common Securities, except that,
if an Event of Default under the Declaration occurs and is continuing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall be made
until the Holders of the Preferred Securities shall be paid in full the
Distributions, redemption, liquidation and other payments to which they are
entitled.
10. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
I-17
<PAGE>
The Holders of the Securities shall have no preemptive rights to subscribe
for any additional securities.
12. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate)
and the Indenture (including any supplemental indenture) to a Holder without
charge on written request to the Sponsor at its principal place of business.
The Securities shall be governed by and interpreted in accordance with the
laws of the State of Delaware, and all rights and remedies shall be governed by
such laws without regard to principles of conflict of laws.
I-18
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
This Preferred Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary. This
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 is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Securities
CUSIP NO. __________
Certificate Evidencing Preferred Securities
of
Citicorp Capital X
% Capital Securities
(liquidation amount $1,000 per Capital Security)
A1-1
<PAGE>
Citicorp Capital X, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that ______________ (the
"Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the % Capital Securities (liquidation amount $1,000 per Capital
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of ___________, 199__, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of __________, 199 .
Citicorp Capital X
By:________________________________
Name:
Title: Regular Trustee
A1-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated __________, ____
The Wilmington Trust Company,
as Institutional Trustee
By:__________________________
Authorized Signatory
or
Citibank, N.A.
as Authenticating Agent
By:__________________________
Authorized Signatory
A1-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate
per annum of % (the "Coupon Rate") of the stated liquidation amount of $1,000
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than one semiannual Distribution period will bear interest thereon
compounded semiannually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full semiannual Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full semiannual Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 180-day semiannual Distribution period.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semiannually in arrears, on February 15 and August 15 of
each year, commencing on _______________________________________________ ,199__,
to the holders of record on the relevant record dates (as specified in the
Declaration) next preceding such payment dates. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 10 consecutive semiannual interest periods, including the first such
semiannual Distribution period during such extension period (each an "Extension
Period"), provided that no Extension Period shall extend beyond the date of the
maturity of the Debentures. As a consequence of such deferral, Distributions
will also be deferred. Despite such deferral, semiannual Distributions will
continue to accrue with interest thereon (to the extent permitted by applicable
law) at the Coupon Rate compounded semiannually during any such Extension
Period. Prior to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together with all such
previous and further
A1-4
<PAGE>
extensions within such Extension Period, may not exceed 10 consecutive
semiannual interest periods, including the first semiannual interest period
during such Extension Period, or extend beyond the maturity date of the
Debentures. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Upon the occurrence and continuation of a Tax Event, (x) the Sponsor shall
have the right, in certain circumstances described in Annex I to the
Declaration, to liquidate the Trust within 90 days following the occurrence of
such Tax Event and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust and (y) prior to February 15, 200 , the
Debenture Issuer shall have the right, in certain circumstances described in
Annex I to the Declaration, to redeem the Debentures in whole or in part within
90 days following the occurrence of such Tax Event and, following such
redemption, cause Securities with an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed to be redeemed by the
Trust.
Upon the occurrence and continuation of a Regulatory Capital Event, (x)
the Sponsor shall have the right to liquidate the Trust within 90 days following
the occurrence of such Regulatory Capital Event and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust and (y)
prior to February 15, 200 , the Debenture Issuer shall have the right to redeem
the Debentures in whole or in part within 90 days following the occurrence of
such Regulatory Capital Event and, following such redemption, cause Securities
with an aggregate liquidation amount equal to the aggregate principal amount of
the Debentures so redeemed to be redeemed by the Trust.
The Preferred Securities shall be redeemable as provided in the
Declaration.
A1-5
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________ agent to transfer
this Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee*: ___________________________________
- --------
* Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities and Exchange Act of 1934, as
amended.
A1-6
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
Citicorp Capital X
___________________________ % Common Securities
(liquidation amount $1,000 per Common Security)
Citicorp Capital X, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that Citicorp (the
"Holder") is the registered owner of common securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the %
Common Securities (liquidation amount $1,000 per Common Security) (the "Common
Securities"). The Common Securities are transferable on the books and records of
the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are 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 ___________, 199__, as the same may be amended from time
to time (the "Declaration"), including the designation of the terms of the
Common Securities as set forth in Annex I to the Declaration. Capitalized terms
used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Common Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of the
Declaration, the Common Securities Guarantee and the Indenture (including any
supplemental indenture) to a Holder without charge
A2-1
<PAGE>
upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ___ day
of , 199 .
CITICORP CAPITAL X
By:________________________________
Name:
Title: Regular Trustee
A2-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the within-mentioned
Declaration.
Dated __________, ____
The Wilmington Trust Company,
as Institutional Trustee
By:__________________________
Authorized Signatory
or
Citibank, N.A.,
as Authenticating Agent
By:__________________________
Authorized Signatory
A2-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of % (the "Coupon Rate") of the stated liquidation amount of $1,000 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Institutional Trustee. Distributions in arrears for more than
one semiannual Distribution period will bear interest thereon compounded
semiannually at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full semiannual Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full semiannual
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 180-day
semiannual Distribution period.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semiannually in arrears, on February 15 and August 15 of
each year, commencing on ______________________________________-- , 199 , to
Holders of record fifteen (15) days prior to such payment dates, which payment
dates shall correspond to the interest payment dates on the Debentures. The
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period from time to time on the Debentures for
a period not exceeding 10 consecutive calendar semiannual interest periods,
including the first such quarter during such extension period (each an
"Extension Period"), provided that no Extension Period shall extend beyond the
date of the maturity of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, semiannual
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded semiannually during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further
A2-4
<PAGE>
extensions within such Extension Period, may not exceed 10 consecutive calendar
semiannual interest periods, including the first semiannual interest period
during such Extension Period, or extend beyond the maturity date of the
Debentures. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Upon the occurrence and continuation of a Tax Event, (x) the Sponsor shall
have the right, in certain circumstances described in Annex I to the
Declaration, to liquidate the Trust within 90 days following the occurrence of
such Tax Event and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust and (y) prior to February 15, 200 , the
Debenture Issuer shall have the right, in certain circumstances described in
Annex I to the Declaration, to redeem the Debentures in whole or in part within
90 days following the occurrence of such Tax Event and, following such
redemption, cause Securities with an aggregate liquidation amount equal to the
aggregate amount of the Debentures so redeemed to be redeemed by the Trust.
Upon the occurrence and continuation of a Regulatory Capital Event, (x)
the Sponsor shall have the right to liquidate the Trust within 90 days following
the occurrence of such Regulatory Capital Event and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust and (y)
prior to February 15, 200 , the Debenture Issuer shall have the right to redeem
the Debentures in whole or in part within 90 days following the occurrence of
such Regulatory Capital Event and, following such redemption, cause Securities
with an aggregate liquidation amount equal to the aggregate amount of the
Debentures so redeemed to be redeemed by the Trust.
The Common Securities shall be redeemable as provided in the Declaration.
A2-5
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert assignee's social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints ______________________________________________________
_______________________________________________________________________________
_____________________________________________ agent to transfer this Common
Security Certificate on the books of the Trust. The agent may substitute another
to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee*: ___________________________________
- --------
* Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities and Exchange Act of 1934, as
amended.
A2-6
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
AMENDED AND RESTATED DECLARATION
OF TRUST
CITICORP CAPITAL XI
Dated as of ___________, 199__
1
<PAGE>
Page
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.............................................. 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application......................... 9
SECTION 2.2 Lists of Holders of Securities........................... 9
SECTION 2.3 Reports by the Institutional Trustee..................... 10
SECTION 2.4 Periodic Reports to Institutional Trustee................ 10
SECTION 2.5 Evidence of Compliance with Conditions
Precedent................................................ 10
SECTION 2.6 Events of Default; Waiver................................ 10
SECTION 2.7 Event of Default; Notice................................. 12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name..................................................... 13
SECTION 3.2 Office................................................... 13
SECTION 3.3 Purpose.................................................. 13
SECTION 3.4 Authority................................................ 13
SECTION 3.5 Title to Property of the Trust........................... 14
SECTION 3.6 Powers and Duties of the Regular Trustees................ 14
SECTION 3.7 Prohibition of Actions by the Trust and
the Trustees............................................. 17
SECTION 3.8 Powers and Duties of the Institutional
Trustee.................................................. 18
SECTION 3.9 Certain Duties and Responsibilities of
the Institutional Trustee................................ 20
SECTION 3.10 Certain Rights of Institutional Trustee.................. 22
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 Limitation to Trust Property............................. 28
i
<PAGE>
Page
SECTION 3.17 Compensation and Fees.................................... 29
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.................. 29
SECTION 4.2 Responsibilities of the Sponsor.......................... 29
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees....................................... 30
SECTION 5.2 Delaware Trustee......................................... 30
SECTION 5.3 Institutional Trustee; Eligibility....................... 31
SECTION 5.4 Certain Qualifications of Regular
Trustees and Delaware Trustee Generally.................. 32
SECTION 5.5 Regular Trustees......................................... 32
SECTION 5.6 Delaware Trustee......................................... 32
SECTION 5.7 Appointment, Removal and Resignation of
Trustees................................................. 33
SECTION 5.8 Vacancies among Trustees................................. 34
SECTION 5.9 Effect of Vacancies...................................... 34
SECTION 5.10 Meetings................................................. 35
SECTION 5.11 Delegation of Power...................................... 35
SECTION 5.12 Merger, Conversion, Consolidation or
Succession to Business................................... 36
SECTION 5.13 Co-Trustees and Separate Trustee......................... 36
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions............................................ 38
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.................. 38
SECTION 7.2 Paying Agent............................................. 39
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
ii
<PAGE>
Page
SECTION 8.1 Dissolution and Termination of Trust..................... 40
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities................................... 41
SECTION 9.2 Transfer of Certificates................................. 41
SECTION 9.3 Deemed Security Holders.................................. 43
SECTION 9.4 Book Entry Interests..................................... 43
SECTION 9.5 Notices to Clearing Agency............................... 45
SECTION 9.6 Appointment of Successor Clearing Agency................. 45
SECTION 9.7 Definitive Preferred Security
Certificates............................................. 45
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates............................................. 46
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability................................................ 46
SECTION 10.2 Exculpation.............................................. 47
SECTION 10.3 Fiduciary Duty........................................... 47
SECTION 10.4 Indemnification.......................................... 49
SECTION 10.5 Outside Businesses....................................... 52
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.............................................. 53
SECTION 11.2 Certain Accounting Matters............................... 53
SECTION 11.3 Banking.................................................. 53
SECTION 11.4 Withholding.............................................. 54
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments............................................... 54
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent................................ 57
iii
<PAGE>
Page
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of
Institutional Trustee.................................... 58
SECTION 13.2 Representations and Warranties of
Delaware Trustee......................................... 59
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.................................................. 60
SECTION 14.2 Governing Law............................................ 61
SECTION 14.3 Intention of the Parties................................. 62
SECTION 14.4 Headings................................................. 62
SECTION 14.5 Successors and Assigns................................... 62
SECTION 14.6 Partial Enforceability................................... 62
SECTION 14.7 Counterparts............................................. 62
ANNEX I TERMS OF SECURITIES...................................... I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE...................... A2-1
EXHIBIT B SPECIMEN OF DEBENTURE.................................... B-1
EXHIBIT C UNDERWRITING AGREEMENT................................... C-1
iv
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a)..................................................... 5.3(a)
310(c)..................................................... Inapplicable
311(c)..................................................... Inapplicable
312(a)..................................................... 2.2(a)
312(b)..................................................... 2.2(b)
313........................................................ 2.3
314(a)..................................................... 2.4
314(b)..................................................... Inapplicable
314(c)..................................................... 2.5
314(d)..................................................... Inapplicable
314(f)..................................................... Inapplicable
315(a)..................................................... 3.9(b)
315(c)..................................................... 3.9(a)
315(d)..................................................... 3.9(a)
316(a)..................................................... Annex I
316(c)..................................................... 3.6(e)
- ---------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CITICORP CAPITAL XI
___________, 199__
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of ___________, 199__, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Citicorp Capital XI (the
"Trust"), a trust under the Delaware Business Trust Act pursuant to a
Declaration of Trust dated as of [________________] (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on [________________], for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
1
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Additional Interest" has the meaning set forth in the Indenture.
"Adjusted Treasury Rate" has the same meaning set forth in Section 4(d) of
Annex I.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
2
<PAGE>
"Authorized Officer" of a Person means any Person that is authorized to
legally bind such Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than Saturday, Sunday or any other day
on which banking institutions in New York City, are permitted or required by any
applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code ss. 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
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.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the "Closing Date" under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.1(a).
3
<PAGE>
"Common Securities Guarantee" means the guarantee agreement to be dated as
of ___________, 199__ of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Comparable Treasury Issue" has the meaning set forth in Section 4(d) of
Annex I.
"Comparable Treasury Price" has the meaning set forth in Section 4(d) of
Annex I.
"Corporate Trust Office" means the office of the Institutional Trustee at
which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at Rodney Square North, 9th Floor, 1100
North Market Street, Wilmington, Delaware 19890-0001.
"Coupon Rate" has the meaning set forth in Section 2(a) of Annex I.
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Citicorp, a Delaware corporation, or any
successor entity resulting from any consolidation, amalgamation, merger or other
business combination, in its capacity as issuer of the Debentures under the
Indenture.
"Debenture Trustee" means Wilmington Trust Company, a national banking
association duly organized and existing under
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the laws of the United States, as trustee under the Indenture until a successor
is appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the Debenture
Issuer under the Indenture to be held by the Institutional Trustee, a specimen
certificate for such series of Debentures being Exhibit B.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Dissolution Tax Opinion" has the meaning set forth in Annex I hereto.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of Default
(as defined in the Indenture) that has occurred and is continuing in respect of
the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
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"Indenture" means the Indenture dated as of December 17, 1996, among the
Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"Institutional Trustee" has the meaning set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"No Recognition Opinion" has the meaning set forth in Annex I hereto.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman, a Vice Chairman, a Vice President, the Chief Auditor,
the Treasurer, the Secretary or an Assistant Secretary of such Person. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Declaration shall include:
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(a) a statement that each officer signing the Certificate has read
the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 7.2.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning specified in Section 7.1(a).
"Preferred Securities Guarantee" means the guarantee agreement to be dated
as of ___________, 199__, of the Sponsor in respect of the Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
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"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement between the Trust, the
Debenture Issuer and the underwriters designated by the Regular Trustees with
respect to the offer and sale of the Preferred Securities.
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both of them.
"Quotation Agent" has the meaning set forth in Section 4(d) of Annex I.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Regulatory Capital Event" has the meaning set forth in Annex I hereto.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Institutional Trustee,
any officer within the Corporate Trust Office of the Institutional Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
successor rule or regulation.
"Securities" means the Common Securities and the Preferred Securities.
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"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Sponsor" means Citicorp, a Delaware corporation, or any successor entity
resulting from any merger, consolidation, amalgamation or other business
combination, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section 5.7.
"Successor Institutional Trustee" has the meaning set forth in Section
5.7.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding 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 accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person
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shall continue in office in accordance with the terms hereof, and all other
Persons who may from time to time be duly appointed, qualified and serving as
Trustees in accordance with the provisions hereof, and references herein to a
Trustee or the Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Property" means (i) the Debentures, (ii) any cash on deposit in, or
owing to, the Institutional Trustee Account and (iii) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held by the Institutional Trustee for the Trust pursuant to this Declaration.
"Underwriting Agreement" means the Underwriting Agreement for the offering
and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by ss.ss. 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as
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equity securities representing undivided beneficial interests in the assets of
the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Institutional
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Institutional Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Institutional Trustee. The Institutional Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in Lists
of Holders given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity) provided that the Institutional Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations under
ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after May 15 of each year, the Institutional Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by ss. 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by ss. 313 of the Trust Indenture Act. The Institutional Trustee shall
also comply with the requirements of ss. 313(d) of the Trust Indenture Act.
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SECTION 2.4 Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such documents, reports and information as
required by ss. 314 (if any) and the compliance certificate required by ss. 314
of the Trust Indenture Act in the form, in the manner and at the times required
by ss. 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the proportion
in liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.
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The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section 2.6(b), the Event
of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have
waived such Event of Default under the Declaration as provided below in
this Section 2.6(b), the Event of Default under the Declaration may only
be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of
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Default with respect to the Common Securities and its consequences until all
Events of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated, and until such Events of Default have been so
cured, waived or otherwise eliminated, the Institutional Trustee will be deemed
to be acting solely on behalf of the Holders of the Preferred Securities and
only the Holders of the Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
such waiver, any such default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee, at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(d) The Institutional Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities actually known to a Responsible Officer of the Institutional Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Event of Default as defined in the Indenture, not including any periods of grace
provided for
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therein and irrespective of the giving of any notice provided therein); provided
that, except for a default in the payment of principal of (or premium, if any)
or interest on any of the Debentures or in the payment of any sinking fund
installment established for the Debentures, the Institutional Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Institutional Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Securities.
(e) The Institutional Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.01(a) and 5.01(b) of the Indenture;
or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Citicorp Capital XI" as such name may be modified from
time to time by the Regular Trustees following written notice to the Holders of
Securities. The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o
Citicorp, 399 Park Avenue, New York, New York 10043 Attn: Treasurer. On ten
Business Days written notice to the Holders of Securities, the Regular Trustees
may designate another principal office.
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SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary, or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and the
Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
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(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one
series of 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 Securities shall be
limited to a simultaneous issuance of both Preferred Securities and Common
Securities on each Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the Preferred Securities
in any State in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc. or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing upon notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by
the Sponsor, relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement and
Pricing Agreement providing for the sale of the Preferred
Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Securities; provided, however, that the Regular Trustees shall cause legal
title to the Debentures
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to be held of record in the name of the Institutional Trustee for the
benefit of the Holders of the Preferred Securities and the Holders of
Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Tax Event or Regulatory Capital Event;
provided that the Regular Trustees shall consult with the Sponsor and the
Institutional Trustee before taking or refraining from taking any
ministerial action in relation to a Tax Event or Regulatory Capital Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of ss. 316(c) of the Trust Indenture
Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
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(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities or to appoint a Paying Agent for the
Securities as provided in Section 7.2;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
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(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders in any material respect; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall not take any action that
is inconsistent with the purposes and functions of the Trust set forth in
Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Institutional Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.6
shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) on behalf of the Trust shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust not
to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
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(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under the Indenture, (C) exercise
any right to rescind or annul any declaration that the principal of all
the Debentures shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required unless the Trust shall have received an opinion
of a nationally recognized independent counsel experienced in such matters
to the effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes the
Trust will not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of record
in the name of the Institutional Trustee in trust for the benefit of the Holders
of the Securities. The right, title and interest of the Institutional Trustee to
the Debentures shall vest automatically in each Person who may hereafter be
appointed as Institutional Trustee in accordance with Section 5.7. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
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(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee, except as provided in
Section 7.2 hereof, on behalf of the Holders of the Securities and, upon
the receipt of payments of funds made in respect of the Debentures held by
the Institutional Trustee, deposit such funds into the Institutional
Trustee Account and make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the Institutional
Trustee Account in accordance with Section 6.1. Funds in the Institutional
Trustee Account shall be held uninvested until disbursed in accordance
with this Declaration. The Institutional Trustee Account shall be an
account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the rating assigned
to the Preferred Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the
occurrence of a Tax Event or a Regulatory Capital Event.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
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(e) The Institutional Trustee shall take any Legal Action which arises out
of or in connection with (i) an Event of Default of which a Responsible Officer
of the Institutional Trustee has actual knowledge or (ii) the Institutional
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act, and if such Institutional Trustee shall have failed to take such Legal
Action, the Holders of the Preferred Securities may take such Legal Action, to
the same extent as if such Holders of Preferred Securities held a principal
amount of Debentures equal to the liquidation amount of such Preferred
Securities, without first proceeding against the Institutional Trustee or the
Trust; provided however, that if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a Holder of Preferred Securities may directly institute a proceeding
for enforcement of payment to such Holder of the principal of or interest then
due on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder (a "Direct
Action") on or after the respective due date specified in the Debentures. In
connection with such Direct Action, the rights of the Holders of the Common
Securities will be subrogated to the rights of such Holder of Preferred
Securities to the extent of any payment made by the Issuer to such Holder of
Preferred Securities in such Direct Action. Except as provided in the preceding
sentences, the Holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures.
(f) The Institutional Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.7.
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(g) The Institutional Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) The Institutional Trustee shall be authorized to undertake any actions
set forth in ss. 317(a) of the Trust Indenture Act.
(i) Subject to this Section 3.8, the Institutional Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and in the Securities and no implied covenants shall be read
into this Declaration against the Institutional Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section 2.6)
of which a Responsible Officer of the Institutional Trustee has actual
knowledge, the Institutional Trustee shall exercise such of the rights and
powers vested in it by this Declaration, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for
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its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and in the Securities and the Institutional Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration and in
the Securities, and no implied covenants or obligations shall be
read into this Declaration against the Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; provided, however, that in the
case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Institutional Trustee, the Institutional Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Outstanding Preferred Securities relating to the
time, method and place of conducting any proceeding for any remedy
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available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Institutional Trustee under this Declaration and
the Trust Indenture Act and, to the extent applicable, Rule 3a-7 under the
Investment Company Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing
with the Sponsor. Money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the
Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise required
by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be
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liable for any default or misconduct of the Regular Trustees or the
Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with
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such advice or opinion, such counsel may be counsel to the Sponsor or any
of its Affiliates, and may include any of its employees. The Institutional
Trustee shall have the right at any time to seek instructions concerning
the administration of this Declaration from any court of competent
jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of
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the Securities, and the signature of the Institutional Trustee or its
agents alone shall be sufficient and effective to perform any such action
and no third party shall be required to inquire as to the authority of the
Institutional Trustee to so act or as to its compliance with any of the
terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Institutional Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration;
(xii) the Institutional Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration; and
(xiii) if (A) in performing its duties under this Declaration the
Institutional Trustee is required to decide between alternative courses of
action or (B) in construing any of the provisions in this Declaration, the
Institutional Trustee finds the same ambiguous or same inconsistent with
any other provisions contained herein or (C) the Institutional Trustee is
unsure of the application of any provision of this Declaration, then,
except as to any matter
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as to which the Preferred Securities Holders are entitled to vote under
the terms of this Declaration, the Institutional Trustee shall deliver a
notice to the Sponsor requesting written instructions of the Sponsor as to
the course of action to be taken. The Institutional Trustee shall take
such action, or refrain from taking such action, as the Institutional
Trustee shall be instructed in writing to take, or to refrain from taking,
by the Sponsor and shall be fully and conclusively protected in taking or
refraining from taking such action as so instructed; provided, however,
that the Institutional Trustee shall be under no duty to take any action
unless and until so instructed by the Sponsor; and provided, further, that
if the Institutional Trustee does not receive such instructions of the
Sponsor within ten Business Days after it has delivered such notice, or
such reasonably shorter period of time set forth in such notice (which to
the extent practicable shall not be fewer than two Business days), it may,
but shall be under no duty to, take or refrain from taking any such action
not inconsistent with this Declaration as it shall deem advisable and in
the best interest of the Securities Holders, in which event the
Institutional Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct.
(b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Institutional Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than Section
5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Regular Trustees or the Institutional Trustee described in this
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Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of
ss.3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is authorized
to execute on behalf of the Trust any documents that the Regular Trustees have
the power and authority to execute pursuant to Section 3.6; provided that, the
registration statement referred to in Section 3.6(b)(i), including any
amendments thereto, shall be signed by a majority of or, if there are less than
three, all of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall dissolve on February 15, 2052.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees and without the consent of
the Holders of the Securities, the Delaware Trustee or the Institutional
Trustee,
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consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State; provided that:
(i) if the Trust is not the surviving entity, such successor entity
(the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same as
the Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed or quoted, or any Successor Securities will be so upon notice of
issuance, on any national securities exchange or other organization on
which the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of counsel to the Trust
to the effect that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Preferred Securities Guarantee and the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger or replacement would cause the Trust or
the Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
SECTION 3.16 Limitation to Trust Property.
All payments made by the Institutional Trustee or a Paying Agent in
respect of the Securities shall be made only from the income and proceeds from
the Trust Property and only to the
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extent that there shall be sufficient income or proceeds from the Trust Property
to enable the Institutional Trustee or Paying Agent to make payments in
accordance with the terms hereof. Each Holder, by its acceptance of a Security,
agrees that it will look solely to the income and proceeds from the Trust
Property to the extent available for distribution to it as herein provided and
that the Trustees shall not be personally liable to it for any amount
distributable in respect of any Security or for any other liability in respect
of any Security; provided that this Section 3.16 does not limit the liability of
the Trustees expressly set forth elsewhere in this Declaration or, in the case
of the Institutional Trustee, in the Trust Indenture Act.
SECTION 3.17 Compensation and Fees.
(a) The Sponsor agrees:
(i) to pay the Institutional Trustee from time to time compensation
for all services rendered by the Institutional Trustee hereunder in
accordance with a separate fee agreement between the Sponsor and the
Institutional Trustee (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); and
(ii) except as otherwise expressly provided herein, to reimburse the
Institutional Trustee upon request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the
Institutional Trustee in accordance with any provision of this Declaration
(including the reasonable compensation and the expenses and disbursements
of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence, bad faith or willful
misconduct.
(b) The provisions of this Section shall survive the termination of this
Declaration.
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ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust at the same time as the Preferred Securities are
sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and
to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
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(e) to negotiate the terms of the Underwriting Agreement and Pricing
Agreement providing for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be three (3), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities; provided, however, that, the
number of Trustees shall in no event be less than two (2); provided
further that (1) one Trustee shall be the Delaware Trustee; (2) there
shall be at least one Trustee who is an employee or officer of, or is
affiliated with the Sponsor (a "Regular Trustee"); and (3) one Trustee
shall be the Institutional Trustee for so long as this Declaration is
required to qualify as an indenture under the Trust Indenture Act, and
such Trustee may also serve as Delaware Trustee if it meets the applicable
requirements.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
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provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a financial institution organized and doing business under
the laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 5.3(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Institutional Trustee shall cease to be eligible to
so act under Section 5.3(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 5.7(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of ss. 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in all
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respects comply with the provisions of ss. 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be:
Wilmington Trust Company
SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 Regular Trustees.
The initial Regular Trustees shall be:
Peter Gallant
John F. Rice
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by a majority
of or, if there are less than three, all of the Regular Trustees; and
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(c) a Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purposes of signing any documents which the Regular Trustees have power
and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Wilmington Trust Company
SECTION 5.7 Appointment, Removal and Resignation of
Trustees.
(a) Subject to Section 5.7(b), Trustees may be appointed or removed
without cause at any time except during an Event of Default:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities.
(b)(i) The Trustee that acts as Institutional Trustee shall not be removed
in accordance with Section 5.7(a) until a successor Trustee possessing the
qualifications to act as Institutional Trustee under Section 5.3 (a "Successor
Institutional Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Institutional Trustee and
delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with this Section 5.7(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections
5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such Successor
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Delaware Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the Sponsor
and the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Delaware Trustee or Successor Institutional Trustee
as the case may be if the Institutional Trustee or the Delaware Trustee delivers
an instrument of resignation in accordance with this Section 5.7.
(e) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.7 within 60 days after delivery of an instrument of resignation or removal,
the Institutional Trustee or Delaware Trustee resigning or being
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removed, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.7, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.10 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
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Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
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SECTION 5.12 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
SECTION 5.13 Co-Trustees and Separate Trustee.
(a) Unless an Event of Default shall have occurred and be continuing, at
any time or times for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property may
at the time be located, the Sponsor and the Institutional Trustee shall have
power to appoint, and upon the written request of the Institutional Trustee, the
Sponsor shall for such purpose join with the Institutional Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Institutional Trustee
either to act as co-trustee, jointly with the Institutional Trustee, of all or
any part of such Trust Property, or to act as separate trustee of any such
property, in either case with such powers as may be provided in the instrument
of appointment, and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section 5.13. If the Sponsor does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case of an Event of Default has occurred and is continuing, the Institutional
Trustee alone shall have power to make such appointment.
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(b) Should any written instrument from the Sponsor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Sponsor.
(c) Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(i) The Securities shall be executed and delivered and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees designated for such purpose
hereunder, shall be exercised, solely by such Trustees.
(ii) The rights, powers, duties and obligations hereby conferred or
imposed upon the Institutional Trustee in respect of any property covered
by such appointment shall be conferred or imposed upon and exercised or
performed by the Institutional Trustee or by the Institutional Trustee and
such co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any particular act
is to be performed, the Institutional Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such co-trustee
or separate trustee.
(iii) The Institutional Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Sponsor, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section 5.13, and, in case an Event of Default has
occurred and is continuing, the Institutional Trustee shall have power to
accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Sponsor. Upon the written request
of the Institutional Trustee, the Sponsor shall join with the
Institutional Trustee in the execution, delivery and performance of all
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instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner provided in this
Section 5.13.
(iv) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Institutional Trustee.
(v) The Institutional Trustee shall not be liable by reason of any
act or omission of a co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the Institutional Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in accordance with
the applicable terms of the relevant Holder's Securities. Distributions shall be
made on the Preferred Securities and the Common Securities in accordance with
the preferences set forth in their respective terms. If and to the extent that
the Debenture Issuer makes a payment of interest (including Compounded Interest
(as defined in the Indenture) and Additional Interest), premium and/or principal
on the Debentures held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class of
preferred securities representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in Annex I (the "Preferred
Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Common Securities.") The Trust shall issue no securities
or other interests in the assets of the Trust other than the Preferred
Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a Regular
Trustee. Such signature shall be the manual or facsimile signature of any
present or any future Regular Trustee. In case any Regular Trustee of the Trust
who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) A Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Institutional Trustee. The signature
shall be conclusive
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evidence that the Security has been authenticated under this Declaration.
The Institutional Trustee may appoint an authenticating agent acceptable
to the Trust to authenticate Securities. An authenticating agent may
authenticate Securities whenever the Institutional Trustee may do so. Each
reference in this Declaration to authentication by the Institutional Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Institutional Trustee to deal with the Sponsor or an Affiliate.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration and
the receipt of the consideration therefor, the Securities so issued shall be
deemed to be validly issued, fully paid and non-assessable.
(f) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
SECTION 7.2 Paying Agent.
The Trust shall appoint an agent (the "Paying Agent"), which shall
initially be Citibank, N.A., which shall make Distributions to the Securities
Holders from the Institutional Trustee Account and shall report the amounts of
such Distributions to the Regular Trustees and the Institutional Trustee. Any
Paying Agent shall have the revocable power to withdraw funds from the
Institutional Trustee Account for the purpose of making the Distributions. The
Institutional Trustee shall be entitled to rely upon a certificate of the Paying
Agent stating the amount of such funds so to be withdrawn and that the same are
to be applied by the Paying Agent in accordance with this Section 7.2. The
Regular Trustees may revoke such power and remove the Paying Agent in their sole
discretion. The Paying
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Agent may choose any co-paying agent that is acceptable to the Regular Trustees.
The Paying Agent shall be permitted to resign upon 30 days' notice to the
Regular Trustees. In the event of the removal or resignation of the Paying
Agent, the Regular Trustees shall appoint a successor that is reasonably
acceptable to the Institutional Trustee to act as Paying Agent (which shall be a
bank, trust company or an Affiliate of the Sponsor). The Regular Trustee shall
cause such successor Paying Agent or any additional Paying Agent appointed to
execute and deliver to the Trustees an instrument in which such Paying Agent or
additional Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Securities Holders in trust for the benefit of the
Securities Holders entitled thereto until such sums shall be paid to such
Securities Holders. The Paying Agent shall return all unclaimed funds to the
Institutional Trustee and upon resignation or removal of a Paying Agent such
Paying Agent also shall return all funds in its possession to the Institutional
Trustee. The provisions of Sections 3.8(d), 3.9, 3.10 and 3.17 shall apply to
the Paying Agent appointed hereunder, and the Paying Agent shall be bound by the
requirements with respect to paying agents of securities issued pursuant to the
Trust Indenture Act. Any reference in this Declaration to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust.
(a) The Trust shall dissolve:
(i) on February 15, 2052, the expiration term of the Trust;
(ii) upon the bankruptcy of the Sponsor;
(iii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; the consent of at least a majority
in liquidation amount of the Securities affected thereby voting together
as a single
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class to file a certificate of cancellation with respect to the Trust or
the revocation of the Sponsor's charter and the expiration of 90 days
after the date of revocation without a reinstatement thereof;
(iv) upon the election by the Regular Trustees to dissolve the
Trust, following the occurrence of a Tax Event or a Regulatory Capital
Event in accordance with the terms of the Securities and the distribution
of all of the Debentures endorsed thereon to the Holders of Securities in
exchange for all of the Securities;
(v) upon the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor or the Trust;
(vi) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Securities;
or
(vii) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a), and upon the completion of the winding up of the Trust, one
of the Trustees (each of whom is hereby authorized to take such action) shall
file a certificate of cancellation with the Secretary of State of the State of
Delaware terminating the Trust.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. Any
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transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) The Sponsor may not transfer the Common Securities.
SECTION 9.2 Transfer of Certificates.
(a) The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Trust or the Sponsor
may reasonably require) in respect of any tax or other government charges that
may be imposed in relation to it. Upon surrender for registration of transfer of
any Certificate, the Regular Trustees shall cause one or more new Certificates
to be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
(b) Upon receipt by the Institutional Trustee of a Definitive Preferred
Security Certificate, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Institutional Trustee, requesting transfer
of such Definitive Preferred Security Certificate for a beneficial interest in a
Global Certificate, the Institutional Trustee shall cancel such Definitive
Preferred Security Certificate and cause, or direct the Clearing Agency to
cause, the aggregate number of Preferred Securities represented by the
appropriate Global Certificate to be increased accordingly. If no Global
Certificates are then outstanding, the Trust shall issue and the Institutional
Trustee shall authenticate, upon written order of
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any Regular Trustee, an appropriate number of Preferred Securities in global
form.
(c) Upon receipt by the Institutional Trustee from the Clearing Agency or
its nominee on behalf of any Person having a beneficial interest in a Global
Certificate of written instructions or such other form of instructions as is
customary for the Clearing Agency or the person designated by the Clearing
Agency, requesting transfer of a beneficial interest in a Global Certificate for
a Definitive Preferred Security Certificate, then the Institutional Trustee or
the securities custodian, at the direction of the Institutional Trustee, will
cause, in accordance with the standing instructions and procedures existing
between the Clearing Agency and the securities custodian, the aggregate
principal amount of the Global Certificate to be reduced on its books and
records and, following such reduction, the Trust will execute and the
Institutional Trustee will authenticate and deliver to the transferee a
Definitive Preferred Security Certificate.
Definitive Preferred Security Certificates issued in exchange for a
beneficial interest in a Global Certificate shall be registered in such names
and in such authorized denominations as the Clearing Agency, pursuant to
instructions from its Clearing Agency Participants or indirect participants or
otherwise, shall instruct the Institutional Trustee. The Institutional Trustee
shall deliver such Preferred Securities to the persons in whose names such
Preferred Securities are so registered in accordance with the instructions of
the Clearing Agency.
(d) Notwithstanding any other provisions of this Declaration, a Global
Certificate may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or another nominee of the Clearing Agency or by
the Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the
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Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities, the
Preferred Securities Certificates, on original issuance, will be issued in the
form of one or more, fully registered, global Preferred Security Certificates
(each a "Global Certificate"), to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Global Certificates shall initially
be registered on the books and records of the Trust in the name of Cede & Co.,
the nominee of DTC, and no Preferred Security Beneficial Owner will receive a
definitive Preferred Security Certificate representing such Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 9.7. Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
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(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants.
Clearing Agency Participants shall have no rights under this Declaration
with respect to any Global Certificate held on their behalf by the Clearing
Agency or by the Institutional Trustee as the custodian of the Clearing Agency
or under such Global Certificate, and the Clearing Agency may be treated by the
Trust, the Institutional Trustee and any agent of the Trust or the Institutional
Trustee as the absolute owner of such Global Certificate for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Trust, the Institutional Trustee or any agent of the Trust or the Institutional
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Clearing Agency or impair, as between the
Clearing Agency and its Clearing Agency Participants, the operation of customary
practices of such Clearing Agency governing the exercise of the rights of a
holder of a beneficial interest in any Global Certificate.
At such time as all beneficial interests in a Global Certificate have
either been exchanged for Definitive Preferred Security Certificates to the
extent permitted by this Declaration or redeemed, repurchased or canceled in
accordance with the terms of this Declaration, such Global Certificate shall be
returned to the Clearing Agency for cancellation or retained and canceled by the
Institutional Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Certificate is exchanged for Definitive Preferred Security
Certificates, or if Definitive Preferred Security Certificates are exchanged for
a beneficial interest in a Global Certificate, Preferred Securities represented
by such Global Certificate shall be reduced or increased and an adjustment shall
be made on the books and records of the Institutional Trustee (if it is then the
securities custodian for such Global Certificate) with respect to
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such Global Certificate, by the Institutional Trustee or the securities
custodian, to reflect such reduction or increase.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security Holders
is required under this Declaration, unless and until Definitive Preferred
Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
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(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Preferred Security Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the instructions
of the Clearing Agency. Neither the Trustees nor the Trust shall be liable
for any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on, said
instructions of the Clearing Agency. The Definitive Preferred Security
Certificates shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the Regular Trustees,
as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends
or endorsements as the Regular Trustees may deem appropriate, or as may be
required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which Preferred Securities may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless,
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that
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may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of an ownership
interest in the relevant Securities, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
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ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Debenture Issuer shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders of the
Securities shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or
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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 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees and expenses), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo
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contendere or its equivalent, shall not, of itself, create a presumption
that the Company Indemnified Person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in
its favor by reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees and expenses) actually
and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the Trust
unless and only to the extent that the Court of Chancery of Delaware or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court)
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shall be made by the Debenture Issuer only as authorized in the specific
case upon a determination that indemnification of the Company Indemnified
Person is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority vote
of a quorum consisting of such Regular Trustees who were not parties to
such action, suit or proceeding, (2) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion, or (3) by the
Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by the Debenture Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) by the
Debenture Issuer that, based upon the facts known to the Regular Trustees,
counsel or the Debenture Issuer at the time such determination is made,
such Company Indemnified Person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to the best interests
of the Trust, or, with respect to any criminal proceeding, that such
Company Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in instances
where the Regular Trustees, independent legal counsel or Debenture Issuer
reasonably determine that such person deliberately breached his duty to
the Trust or its Common or Preferred Security Holders.
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(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the
Debenture Issuer or Preferred Security Holders of the Trust or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office. All rights to indemnification under
this Section 10.4(a) shall be deemed to be provided by a contract between
the Debenture Issuer and each Company Indemnified Person who serves in
such capacity at any time while this Section 10.4(a) is in effect. Any
repeal or modification of this Section 10.4(a) shall not affect any rights
or obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not
the Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or is
or was serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in the
same position under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or
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ratified, continue as to a person who has ceased to be a Company
Indemnified Person and shall inure to the benefit of the heirs, executors
and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense including taxes (other
than taxes based on the income of such Fiduciary Indemnified Person) incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration or the trust or trusts hereunder,
including the costs and expenses (including reasonable legal fees and expenses)
of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to
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recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Institutional Trustee may engage or
be interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year,
or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail, each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes.
(b) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(c) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority, an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law,
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and any other annual income tax returns required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
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ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may only be amended by a written
instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is
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permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without the
consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders of
a Majority in liquidation amount of the Common Securities and;
(f) the rights of the Holders of the Common Securities under Article V to
increase or decrease the number of, and appoint and remove Trustees shall not be
amended without the consent of the Holders of a Majority in liquidation amount
of the Common Securities; and
(g) Sections 12.1(a)(ii) and 12.1(b) shall not be amended without the
consent of the Institutional Trustee and Section 12.1(a)(iii) shall not be
amended without the consent of the Delaware Trustee; and
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(h) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor, provided such amendment does not have a material adverse effect
on the rights, preferences or privileges of the Holders;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) to modify, eliminate or add to any provision of the Declaration
to such extent as may be necessary to eliminate or reduce the adverse
effects resulting from the occurrence of a Tax Event or Regulatory Capital
Event, provided such amendment does not have a material adverse effect on
the rights, preferences or privileges of the Holders.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the 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
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shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Security Certificates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be counted for purposes
of determining whether the required percentage set forth in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least seven days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at
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a meeting. No proxy shall be valid after the expiration of 11 months from
the date thereof unless otherwise provided in the proxy. Every proxy shall
be revocable at the pleasure of the Holder of Securities executing it.
Except as otherwise provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the General Corporation
Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional
Trustee.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at
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the time of the Successor Institutional Trustee's acceptance of its appointment
as Institutional Trustee that:
(a) the Institutional Trustee is a Delaware banking corporation with
trust powers and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Institutional Trustee. The Declaration
has been duly executed and delivered by the Institutional Trustee, and it
constitutes a legal, valid and binding obligation of the Institutional
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in
equity or at law);
(c) the execution, delivery and performance of this Declaration by
the Institutional Trustee does not conflict with or constitute a breach of
the charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with
or notice to, any Delaware State or federal banking authority is required
for the execution, delivery or performance by the Institutional Trustee,
of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware
Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
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(a) The Delaware Trustee is duly organized, validly existing and in
good standing under the laws of the State of Delaware, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with
or notice to, any federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee, of this Declaration.
(d) The Delaware Trustee is a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
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Citicorp Capital XI
c/o Citicorp
399 Park Avenue
New York, New York 10043
Attention: Treasurer
Telecopy: (212) 527-2765
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of
to the Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Department
Telecopy: (302) 651-1576
(c) if given to the Institutional Trustee, at the Institutional
Trustee's mailing address set forth below (or such other address as the
Institutional Trustee may give notice of to the Holders of the
Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Trustee
Administration
Telecopy: (302) 651-1576
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(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
Citicorp
399 Park Avenue
New York, New York 10043
Attention: Treasurer
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be governed
by and interpreted in accordance with the laws of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to the
principles of conflict of laws of the State of Delaware or any other
jurisdiction that would call for the application of the law of any jurisdiction
other than the State of Delaware; provided, however, that there shall not be
applicable to the Trust, the Trustees or this Declaration any provision of the
laws (statutory or common) of the State of Delaware pertaining to trusts that
relate to or regulate, in a manner inconsistent with the terms hereof (a) the
filing with any court or governmental body or agency of trustee accounts or
schedules of trustee fees and charges, (b) affirmative requirements to post
bonds for trustees, officers, agents or employees of a trust, (c) the necessity
for obtaining court or other governmental approval concerning the acquisition,
holding or disposition of real or personal property, (d) fees or other sums
payable to trustees, officers, agents or employees of a trust, (e) the
allocation of receipts and expenditures to income or principal, (f) restrictions
or
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limitations on the permissible nature, amount or concentration of trust
investments or requirements relating to the titling, storage or other manner of
holding or investing trust assets or (g) the establishment of fiduciary or other
standards of responsibility or limitations on the acts or powers of trustees
that are inconsistent with the limitations or liabilities or authorities and
powers of the Trustees as set forth or referenced in this Declaration. Section
3540 of Title 12 of the Delaware Code shall not apply to the Trust.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
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SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
__________________________________
Peter Gallant, as Regular Trustee
__________________________________
John F. Rice, as Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:_________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By:_________________________
Name:
Title:
CITICORP,
as Sponsor
By:_________________________
Name: John F. Rice
Title: Vice President
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ANNEX I
TERMS OF
[____]% CAPITAL SECURITIES
[____]% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of ___________, 199__ (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities ("Preferred Securities"
or "Capital Securities") and the Common Securities are set out below (each
capitalized term used but not defined herein has the meaning set forth in the
Declaration or, if not defined in such Declaration, as defined in the Prospectus
referred to below):
1. Designation and Number.
(a) Preferred Securities. ,000 Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of ,000,000
dollars ($ ,000,000) and a liquidation amount with respect to the assets of the
Trust of $1,000 per preferred security, are hereby designated for the purposes
of identification only as " % Capital Securities" (the "Preferred Securities").
The Preferred Security Certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange on
which the Preferred Securities are listed.
(b) Common Securities. Common Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of ,000 dollars ($
,000) and a liquidation amount with respect to the assets of the Trust of $1,000
per common security, are hereby designated for the purposes of identification
only as " % Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and
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additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate per
annum of % (the "Coupon Rate") of the stated liquidation amount of $1,000 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears for more than one
semiannual Distribution period will bear additional distributions thereon
compounded semiannually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full semiannual
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full semiannual Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 180-day semiannual Distribution period.
(b) Distributions on the Securities will be cumulative, will accrue from
___________, 199__, and will be payable semiannually in arrears, on February 15
and August 15 of each year, commencing on ,199 , except as otherwise described
below. The Debenture Issuer has the right under the Indenture to defer payments
of interest by extending the interest payment period from time to time on the
Debentures for a period not exceeding 10 consecutive semiannual Distribution
periods, including the first such semiannual Distribution period during such
period (each an "Extension Period"), during which Extension Period no interest
shall be due and payable on the Debentures, provided that no Extension Period
shall extend beyond the maturity date of the Debentures. As a consequence of
such deferral, Distributions will also be deferred. Despite such deferral,
semiannual Distributions will continue to accrue with additional distributions
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded semiannually during
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any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further extensions within such Extension Period, may
not exceed 10 consecutive semiannual Distribution periods, including the first
semiannual Distribution period during such Extension Period, or extend beyond
the maturity date of the Debentures. Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust on the relevant record
dates. While the Preferred Securities remain in book-entry only form, the
relevant record dates shall be one Business Day prior to the relevant payment
dates which payment dates correspond to the interest payment dates on the
Debentures. Subject to any applicable laws and regulations and the provisions of
the Declaration, each such payment in respect of the Preferred Securities will
be made as described under the heading "Description of the Preferred Securities
- -- Book-Entry Only Issuance -- The Depository Trust Company" in the Prospectus
Supplement dated __________, 199_, to the Prospectus dated December 17, 1996
(together, the "Prospectus"), of the Trust included in the Registration
Statement on Form S-3 of the Sponsor, the Trust and certain other business
trusts. The relevant record dates for the Common Securities shall be the same
record date as for the Preferred Securities. If the Preferred Securities shall
not continue to remain in book-entry only form, the relevant record dates for
the Preferred Securities shall conform to the rules of any securities exchange
on which the securities are listed and, if none, shall be selected by the
Regular Trustees, which dates shall be at least one Business Day but not more
than ten Business Days before the relevant payment dates, which payment dates
correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, will cease
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to be payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable to
the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the Securities is not a Business Day,
then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay).
(d) If at any time while the Institutional Trustee is the Holder of any
Debentures, the Debenture Issuer is required to pay any Additional Interest to
the Trust or the Institutional Trustee under the Debentures, the Payment Amount
with respect to Distributions on the Securities pursuant to Section 6.1 of the
Declaration shall include any such Additional Interest.
(e) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up or
liquidation of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, an amount equal to the aggregate of the stated liquidation amount of
$1,000 per Security plus accrued and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"), unless, in
connection with such dissolution, winding-up or termination, Debentures in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities
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in exchange for such Securities, after paying or making reasonable provision to
pay all claims and obligations of the Trust in accordance with Section 3808(e)
of the Business Trust Act.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part, whether at
maturity or upon redemption (either at the option of the Debenture Issuer at any
time on or after February 15, 200 or pursuant to a Tax Event or Regulatory
Capital Event at any time prior to February 15, 200 ), the proceeds from such
repayment or redemption shall be simultaneously applied to redeem, at the
Securities Redemption Price, Securities having an aggregate liquidation amount
equal to the aggregate principal amount of the Debentures so repaid or redeemed;
provided that holders will be given not less than 30 nor more than 60 days
notice of such redemption of Securities.
(b) The "Securities Redemption Price" for each $1,000 in stated
liquidation amount of Securities shall be:
(i) in the case of redemption of the Securities upon the maturity of
the Debentures, the liquidation amount of $1,000 per Security, plus
accrued and unpaid Distributions thereon to but excluding the date of
redemption; and
(ii) in the case of redemption of the Securities upon any redemption
of the Debentures by the Debenture Issuer (either at the option of the
Debenture Issuer at any time on or after February 15, 200 or pursuant to a
Tax Event or Regulatory Capital Event at any time prior to February 15,
200 ), equal to the applicable Redemption Price (as defined in the
Indenture) payable with respect to each $1,000 principal amount of
Debentures so redeemed in accordance with the terms of the Debentures.
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If, at any time, a Regulatory Capital Event shall occur and be continuing,
the Sponsor may (i) cause the Trust to be dissolved, with the result that after
satisfaction of liabilities to creditors, if any, Debentures with an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, the Securities, would be
distributed to the Holders of the Securities in liquidation of such holders'
interests in the Trust on a pro rata basis within 90 days following the
occurrence of such Regulatory Capital Event or (ii) within 90 days following the
occurrence of such Regulatory Capital Event, redeem the Debentures, in whole or
in part, upon not less than 30 nor more than 60 days' notice, for cash, with the
result that, following such redemption, the Securities will be redeemed by the
Trust at the Securities Redemption Price; provided, however, that if at the time
there is available to the Sponsor of the Trust the opportunity to eliminate
within such 90- day period, the Regulatory Capital Event by taking some
ministerial action, such as filing a form or making an election or pursuing some
other similar reasonable measure that has no adverse effect on the Trust, the
Sponsor or the holders of the Securities, then the Sponsor or the Trust will
pursue such measure in lieu of distribution or redemption of the Debentures.
(c) "Regulatory Capital Event" means a determination by the Sponsor, based
on an opinion of counsel experienced in such matters (who may be an employee of
the Sponsor or any of its affiliates), that, as a result of any amendment to,
clarification of or change (including any announced prospective change) in
applicable laws or regulations or official interpretations thereof or policies
with respect thereto, which amendment, clarification or change is effective
after the date of this Prospectus Supplement, there is more than an
insubstantial risk that the Preferred Securities will no longer constitute Tier
1 capital of the Sponsor (or its equivalent) for purposes of the capital
adequacy guidelines of the Board of Governors of the Federal Reserve System or
its successor as the Sponsor's primary federal banking regulator.
"Tax Event" means the Regular Trustees shall have received an opinion (a
"Dissolution Tax Opinion") of a nationally recognized independent tax counsel
experienced in such matters
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("Tax Counsel") to the effect that, as a result of (a) any amendment to,
clarification of or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after such date), there is more than an
insubstantial risk that (i) the Trust would be subject to United States federal
income tax with respect to income accrued or received on the Debentures, (ii)
interest payable to the Trust on the Debentures would not be deductible by the
Sponsor for United States federal income tax purposes or (iii) the Trust would
be subject to more than a de minimis amount of other taxes, duties or other
governmental charges, provided that any such change, clarification or amendment
becomes effective on or after the date of this Prospectus Supplement.
If, at any time, a Tax Event shall occur and be continuing, the Sponsor
may cause the Trust to be dissolved, with the result that after satisfaction of
liabilities to creditors, if any, Debentures with an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the distribution rate of, and accrued and unpaid interest equal to
accrued and unpaid distributions on, the Securities, would be distributed to the
holders of the Securities in liquidation of such holders' interests in the Trust
on a Pro Rata basis within 90 days following the occurrence of such Tax Event;
provided that such dissolution and distribution shall be conditioned on (i) the
Regular Trustees' receipt of an opinion of Tax Counsel (a "No Recognition
Opinion"), which opinion may rely on published revenue rulings of the Internal
Revenue Service, to the effect that the holders of the Securities will not
recognize any gain or loss for United States federal income tax purposes as a
result of such dissolution and distribution of Debentures and (ii) the Sponsor
being unable to avoid such Tax Event within such 90-day period by taking some
ministerial action or pursuing some other reasonable measure that will have no
adverse effect on the Trust, the Sponsor or the Holders of the Securities.
Furthermore, if after receipt of a Dissolution Tax Opinion by the Regular
Trustees (i) the Sponsor has received an opinion (a
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"Redemption Tax Opinion") of Tax Counsel that, as a result of a Tax Event, there
is more than an insubstantial risk that the Sponsor would be precluded from
deducting the interest on the Debentures for United States federal income tax
purposes, even after the Debentures were distributed to the holders of
Securities in liquidation of such Holders' interests in the Trust as described
above, or (ii) the Regular Trustees shall have been informed by such Tax Counsel
that it cannot deliver a No Recognition Opinion to the Trust, the Sponsor shall
have the right, within 90 days following the occurrence of such Tax Event, to
redeem the Debentures, in whole or in part, upon not less than 30 nor more than
60 days' notice, for cash, with the result that, following such redemption, the
Securities will be redeemed by the Trust at the Securities Redemption Price;
provided, however, that if at the time there is available to the Sponsor or the
Trust the opportunity to eliminate, within such 90-day period, the Tax Event by
taking some ministerial action, such as filing a form or making an election or
pursuing some other similar reasonable measure that has no adverse effect on the
Trust, the Sponsor or the Holders of the Securities, then the Sponsor or the
Trust will pursue such measure in lieu of redemption of the Debentures.
(d) In the case of an optional redemption, if fewer than all the
outstanding Securities are to be so redeemed, the Common Securities and the
Preferred Securities will be redeemed Pro Rata and the Preferred Securities to
be redeemed will be as described in Section 4(g)(ii) below.
(e) On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) The Depository Trust Company (the
"Depository") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Preferred Securities, will receive a registered
global certificate or certificates representing the Debentures to be delivered
upon such distribution and any certificates representing Securities, except for
certificates representing Preferred Securities held by the Depository or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Debentures having an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the Coupon Rate of, and accrued and unpaid interest equal to
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accrued and unpaid Distributions on such Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or reissue.
(f) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or before the date of
redemption.
(g) The procedure with respect to redemptions and distributions of
Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities
to be redeemed or exchanged not fewer than 30 nor more than 60 days before
the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 4(g)(i), a
Redemption/ Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of
record by the Depository or its nominee (or any successor Clearing Agency
or its nominee), the distribution of the proceeds of such redemption will
be made to each Clearing Agency Participant (or Person on whose behalf
such nominee
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holds such securities) in accordance with the procedures applied by such
agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are to be redeemed as set out in this Section 4 (which notice
will be irrevocable), then (A) while the Preferred Securities are in
book-entry only form, with respect to the Preferred Securities, by 12:00
noon, New York City time, on the redemption date, provided that the
Debenture Issuer has paid the Institutional Trustee a sufficient amount of
cash in connection with the related redemption or maturity of the
Debentures, the Institutional Trustee will deposit irrevocably with the
Depository or its nominee (or successor Clearing Agency or its nominee)
funds sufficient to pay the applicable Securities Redemption Price with
respect to the Preferred Securities and will give the Depository
irrevocable instructions and authority to pay the Securities Redemption
Price to the Holders of the Preferred Securities, and (B) with respect to
Preferred Securities issued in definitive form and Common Securities,
provided that the Debenture Issuer has paid the Institutional Trustee a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Institutional Trustee will pay the
relevant Securities Redemption Price to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books
and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds deposited
as required, if applicable, then immediately prior to the close of
business on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue on the Securities so called
for redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such Securities
to receive the Securities Redemption Price, but without interest on such
Securities Redemption Price. Neither the Regular Trustees nor the Trust
shall be required to register or cause to be registered the transfer of
any Securities that have been so called for redemption. If any date fixed
for redemption of Securities is not a Business Day, then payment of the
Securities Redemption Price payable
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on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Securities Redemption Price in respect of
any Securities is improperly withheld or refused and not paid either by
the Institutional Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the actual date of
payment, in which case the Securities Redemption Price shall include such
additional accrued Distributions.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, the Depository or its nominee (or any successor Clearing
Agency or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holder
thereof, and (B) in respect of the Common Securities to the Holder
thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws and banking laws),
provided the acquiror is not the Holder of the Common Securities or the
obligor under the Indenture, the Sponsor or any of its subsidiaries may at
any time and from time to time purchase outstanding Preferred Securities
by tender, in the open market or by private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise required
by law and the Declaration, the Holders of the Preferred Securities will have no
voting rights.
(b) Subject to the requirements set forth in this paragraph, the Holders
of a majority in aggregate liquidation amount of the Preferred Securities,
voting separately as a class
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may direct the time, method, and place of conducting any proceeding for any
remedy available to the Institutional Trustee, or exercise any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee, as holder of the Debentures, to (i)
exercise the remedies available under the Indenture, conduct any proceeding for
any remedy available to the Debenture Trustee, or exercise any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii) waive
any past default and its consequences that is waivable under Section 2.6 of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable, provided, however,
that, where a consent under the Indenture would require the consent or act of
the Holders of greater than a majority of the Holders in principal amount of
Debentures affected thereby, (a "Super Majority"), the Institutional Trustee may
only give such consent or take such action at the written direction of the
Holders of at least the proportion in liquidation amount of the Preferred
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. The Institutional Trustee shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Preferred Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Institutional Trustee
or the Debenture Trustee as set forth above, the Institutional Trustee shall not
take any action in accordance with the directions of the Holders of the
Preferred Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Institutional Trustee fails to
enforce its rights under the Declaration, any Holder of Preferred Securities may
institute a legal proceeding directly against any person to enforce the
Institutional Trustee's rights under the Declaration without first instituting a
legal proceeding against the Institutional Trustee or any other person. If a
Declaration Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay interest or principal
on the Debentures on the date such interest or principal is otherwise payable
(or in the case of redemption, on the redemption date), then a holder of
Preferred Securities
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may directly institute a proceeding for enforcement of payment to such Holder of
the principal of or interest on the Debentures having a principal amount equal
to the aggregate liquidation amount of the Preferred Securities of such holder
(a "Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the holders of
the Common Securities Holder will be subrogated to the rights of such holder of
Preferred Securities to the extent of any payment made by the Issuer to such
holder of Preferred Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall
not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding, unless all of the Preferred
Securities are owned by the sponsor or any such Affiliate.
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6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c), 7(a) and 8 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace any Trustee
or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the Event of
Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 2.6 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable, provided that, where a consent or
action under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Debentures affected thereby (a
"Super Majority"), the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Pursuant to this Section 6(c), the Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Institutional Trustee or the
Debenture Trustee as set forth above, the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Common
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Securities under this paragraph unless the Institutional Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Institutional Trustee fails to enforce
its rights under the Declaration, any Holder of Common Securities may institute
a legal proceeding directly against any Person to enforce the Institutional
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given at
a separate meeting of Holders of Common Securities convened for such purpose, at
a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the Declaration,
if any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of any or all of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single
I-15
<PAGE>
class will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities affected thereby; provided, that, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the Preferred Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of a
Majority in liquidation amount of such class of Securities.
(b) In the event the consent of the Institutional Trustee as the holder of
the Debentures is required under the Indenture with respect to any amendment,
modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where the taking of any such action under the
Indenture would require the consent of the holders of greater than a majority in
aggregate principal amount of the Debentures (a "Super Majority"), the
Institutional Trustee may only give such consent at the direction of the Holders
of at least the proportion in liquidation amount of the Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding; provided, further, that where the taking of any such
action under the Indenture would require the consent of every holder of the
Debentures, the consent of all holders of Securities shall be required;
provided, further, that the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Securities under this
Section 7(b) unless the Institutional Trustee has obtained an opinion of
nationally recognized independent tax counsel in such matters to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
I-16
<PAGE>
8. Pro Rata.
A reference in these terms of the Securities to any payment, distribution
or treatment as being "Pro Rata" shall mean pro rata to each Holder of
Securities according to the aggregate liquidation amount of the Securities held
by the relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu with the Common Securities and
payment thereon shall be made Pro Rata with the Common Securities, except that,
if an Event of Default under the Declaration occurs and is continuing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall be made
until the Holders of the Preferred Securities shall be paid in full the
Distributions, redemption, liquidation and other payments to which they are
entitled.
10. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
I-17
<PAGE>
The Holders of the Securities shall have no preemptive rights to subscribe
for any additional securities.
12. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate)
and the Indenture (including any supplemental indenture) to a Holder without
charge on written request to the Sponsor at its principal place of business.
The Securities shall be governed by and interpreted in accordance with the
laws of the State of Delaware, and all rights and remedies shall be governed by
such laws without regard to principles of conflict of laws.
I-18
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
This Preferred Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary. This
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 is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Securities
CUSIP NO. __________
Certificate Evidencing Preferred Securities
of
Citicorp Capital XI
% Capital Securities
(liquidation amount $1,000 per Capital Security)
A1-1
<PAGE>
Citicorp Capital XI, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that ______________ (the
"Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the % Capital Securities (liquidation amount $1,000 per Capital
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of ___________, 199__, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of __________, 199 .
Citicorp Capital XI
By:________________________________
Name:
Title: Regular Trustee
A1-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated __________, ____
The Wilmington Trust Company,
as Institutional Trustee
By:__________________________
Authorized Signatory
or
Citibank, N.A.
as Authenticating Agent
By:__________________________
Authorized Signatory
A1-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate
per annum of % (the "Coupon Rate") of the stated liquidation amount of $1,000
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than one semiannual Distribution period will bear interest thereon
compounded semiannually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full semiannual Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full semiannual Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 180-day semiannual Distribution period.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semiannually in arrears, on February 15 and August 15 of
each year, commencing on _______________________________________________ ,199__,
to the holders of record on the relevant record dates (as specified in the
Declaration) next preceding such payment dates. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 10 consecutive semiannual interest periods, including the first such
semiannual Distribution period during such extension period (each an "Extension
Period"), provided that no Extension Period shall extend beyond the date of the
maturity of the Debentures. As a consequence of such deferral, Distributions
will also be deferred. Despite such deferral, semiannual Distributions will
continue to accrue with interest thereon (to the extent permitted by applicable
law) at the Coupon Rate compounded semiannually during any such Extension
Period. Prior to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together with all such
previous and further
A1-4
<PAGE>
extensions within such Extension Period, may not exceed 10 consecutive
semiannual interest periods, including the first semiannual interest period
during such Extension Period, or extend beyond the maturity date of the
Debentures. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Upon the occurrence and continuation of a Tax Event, (x) the Sponsor shall
have the right, in certain circumstances described in Annex I to the
Declaration, to liquidate the Trust within 90 days following the occurrence of
such Tax Event and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust and (y) prior to February 15, 200 , the
Debenture Issuer shall have the right, in certain circumstances described in
Annex I to the Declaration, to redeem the Debentures in whole or in part within
90 days following the occurrence of such Tax Event and, following such
redemption, cause Securities with an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed to be redeemed by the
Trust.
Upon the occurrence and continuation of a Regulatory Capital Event, (x)
the Sponsor shall have the right to liquidate the Trust within 90 days following
the occurrence of such Regulatory Capital Event and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust and (y)
prior to February 15, 200 , the Debenture Issuer shall have the right to redeem
the Debentures in whole or in part within 90 days following the occurrence of
such Regulatory Capital Event and, following such redemption, cause Securities
with an aggregate liquidation amount equal to the aggregate principal amount of
the Debentures so redeemed to be redeemed by the Trust.
The Preferred Securities shall be redeemable as provided in the
Declaration.
A1-5
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________ agent to transfer
this Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee*: ___________________________________
- --------
* Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities and Exchange Act of 1934, as
amended.
A1-6
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
Citicorp Capital XI
___________________________ % Common Securities
(liquidation amount $1,000 per Common Security)
Citicorp Capital XI, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that Citicorp (the
"Holder") is the registered owner of common securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the %
Common Securities (liquidation amount $1,000 per Common Security) (the "Common
Securities"). The Common Securities are transferable on the books and records of
the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are 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 ___________, 199__, as the same may be amended from time
to time (the "Declaration"), including the designation of the terms of the
Common Securities as set forth in Annex I to the Declaration. Capitalized terms
used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Common Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of the
Declaration, the Common Securities Guarantee and the Indenture (including any
supplemental indenture) to a Holder without charge
A2-1
<PAGE>
upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ___ day
of , 199 .
CITICORP CAPITAL XI
By:________________________________
Name:
Title: Regular Trustee
A2-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the within-mentioned
Declaration.
Dated __________, ____
The Wilmington Trust Company,
as Institutional Trustee
By:__________________________
Authorized Signatory
or
Citibank, N.A.,
as Authenticating Agent
By:__________________________
Authorized Signatory
A2-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of % (the "Coupon Rate") of the stated liquidation amount of $1,000 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Institutional Trustee. Distributions in arrears for more than
one semiannual Distribution period will bear interest thereon compounded
semiannually at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full semiannual Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full semiannual
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 180-day
semiannual Distribution period.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semiannually in arrears, on February 15 and August 15 of
each year, commencing on ______________________________________-- , 199 , to
Holders of record fifteen (15) days prior to such payment dates, which payment
dates shall correspond to the interest payment dates on the Debentures. The
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period from time to time on the Debentures for
a period not exceeding 10 consecutive calendar semiannual interest periods,
including the first such quarter during such extension period (each an
"Extension Period"), provided that no Extension Period shall extend beyond the
date of the maturity of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, semiannual
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded semiannually during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further
A2-4
<PAGE>
extensions within such Extension Period, may not exceed 10 consecutive calendar
semiannual interest periods, including the first semiannual interest period
during such Extension Period, or extend beyond the maturity date of the
Debentures. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Upon the occurrence and continuation of a Tax Event, (x) the Sponsor shall
have the right, in certain circumstances described in Annex I to the
Declaration, to liquidate the Trust within 90 days following the occurrence of
such Tax Event and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust and (y) prior to February 15, 200 , the
Debenture Issuer shall have the right, in certain circumstances described in
Annex I to the Declaration, to redeem the Debentures in whole or in part within
90 days following the occurrence of such Tax Event and, following such
redemption, cause Securities with an aggregate liquidation amount equal to the
aggregate amount of the Debentures so redeemed to be redeemed by the Trust.
Upon the occurrence and continuation of a Regulatory Capital Event, (x)
the Sponsor shall have the right to liquidate the Trust within 90 days following
the occurrence of such Regulatory Capital Event and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust and (y)
prior to February 15, 200 , the Debenture Issuer shall have the right to redeem
the Debentures in whole or in part within 90 days following the occurrence of
such Regulatory Capital Event and, following such redemption, cause Securities
with an aggregate liquidation amount equal to the aggregate amount of the
Debentures so redeemed to be redeemed by the Trust.
The Common Securities shall be redeemable as provided in the Declaration.
A2-5
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert assignee's social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints ______________________________________________________
_______________________________________________________________________________
_____________________________________________ agent to transfer this Common
Security Certificate on the books of the Trust. The agent may substitute another
to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee*: ___________________________________
- --------
* Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities and Exchange Act of 1934, as
amended.
A2-6
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
AMENDED AND RESTATED DECLARATION
OF TRUST
CITICORP CAPITAL XI
Dated as of ___________, 199__
1
<PAGE>
Page
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.............................................. 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application......................... 9
SECTION 2.2 Lists of Holders of Securities........................... 9
SECTION 2.3 Reports by the Institutional Trustee..................... 10
SECTION 2.4 Periodic Reports to Institutional Trustee................ 10
SECTION 2.5 Evidence of Compliance with Conditions
Precedent................................................ 10
SECTION 2.6 Events of Default; Waiver................................ 10
SECTION 2.7 Event of Default; Notice................................. 12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name..................................................... 13
SECTION 3.2 Office................................................... 13
SECTION 3.3 Purpose.................................................. 13
SECTION 3.4 Authority................................................ 13
SECTION 3.5 Title to Property of the Trust........................... 14
SECTION 3.6 Powers and Duties of the Regular Trustees................ 14
SECTION 3.7 Prohibition of Actions by the Trust and
the Trustees............................................. 17
SECTION 3.8 Powers and Duties of the Institutional
Trustee.................................................. 18
SECTION 3.9 Certain Duties and Responsibilities of
the Institutional Trustee................................ 20
SECTION 3.10 Certain Rights of Institutional Trustee.................. 22
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 Limitation to Trust Property............................. 28
i
<PAGE>
Page
SECTION 3.17 Compensation and Fees.................................... 29
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.................. 29
SECTION 4.2 Responsibilities of the Sponsor.......................... 29
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees....................................... 30
SECTION 5.2 Delaware Trustee......................................... 30
SECTION 5.3 Institutional Trustee; Eligibility....................... 31
SECTION 5.4 Certain Qualifications of Regular
Trustees and Delaware Trustee Generally.................. 32
SECTION 5.5 Regular Trustees......................................... 32
SECTION 5.6 Delaware Trustee......................................... 32
SECTION 5.7 Appointment, Removal and Resignation of
Trustees................................................. 33
SECTION 5.8 Vacancies among Trustees................................. 34
SECTION 5.9 Effect of Vacancies...................................... 34
SECTION 5.10 Meetings................................................. 35
SECTION 5.11 Delegation of Power...................................... 35
SECTION 5.12 Merger, Conversion, Consolidation or
Succession to Business................................... 36
SECTION 5.13 Co-Trustees and Separate Trustee......................... 36
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions............................................ 38
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.................. 38
SECTION 7.2 Paying Agent............................................. 39
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
ii
<PAGE>
Page
SECTION 8.1 Dissolution and Termination of Trust..................... 40
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities................................... 41
SECTION 9.2 Transfer of Certificates................................. 41
SECTION 9.3 Deemed Security Holders.................................. 43
SECTION 9.4 Book Entry Interests..................................... 43
SECTION 9.5 Notices to Clearing Agency............................... 45
SECTION 9.6 Appointment of Successor Clearing Agency................. 45
SECTION 9.7 Definitive Preferred Security
Certificates............................................. 45
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates............................................. 46
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability................................................ 46
SECTION 10.2 Exculpation.............................................. 47
SECTION 10.3 Fiduciary Duty........................................... 47
SECTION 10.4 Indemnification.......................................... 49
SECTION 10.5 Outside Businesses....................................... 52
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.............................................. 53
SECTION 11.2 Certain Accounting Matters............................... 53
SECTION 11.3 Banking.................................................. 53
SECTION 11.4 Withholding.............................................. 54
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments............................................... 54
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent................................ 57
iii
<PAGE>
Page
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of
Institutional Trustee.................................... 58
SECTION 13.2 Representations and Warranties of
Delaware Trustee......................................... 59
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.................................................. 60
SECTION 14.2 Governing Law............................................ 61
SECTION 14.3 Intention of the Parties................................. 62
SECTION 14.4 Headings................................................. 62
SECTION 14.5 Successors and Assigns................................... 62
SECTION 14.6 Partial Enforceability................................... 62
SECTION 14.7 Counterparts............................................. 62
ANNEX I TERMS OF SECURITIES...................................... I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE...................... A2-1
EXHIBIT B SPECIMEN OF DEBENTURE.................................... B-1
EXHIBIT C UNDERWRITING AGREEMENT................................... C-1
iv
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a)..................................................... 5.3(a)
310(c)..................................................... Inapplicable
311(c)..................................................... Inapplicable
312(a)..................................................... 2.2(a)
312(b)..................................................... 2.2(b)
313........................................................ 2.3
314(a)..................................................... 2.4
314(b)..................................................... Inapplicable
314(c)..................................................... 2.5
314(d)..................................................... Inapplicable
314(f)..................................................... Inapplicable
315(a)..................................................... 3.9(b)
315(c)..................................................... 3.9(a)
315(d)..................................................... 3.9(a)
316(a)..................................................... Annex I
316(c)..................................................... 3.6(e)
- ---------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CITICORP CAPITAL XI
___________, 199__
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of ___________, 199__, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Citicorp Capital XI (the
"Trust"), a trust under the Delaware Business Trust Act pursuant to a
Declaration of Trust dated as of [________________] (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on [________________], for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
1
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Additional Interest" has the meaning set forth in the Indenture.
"Adjusted Treasury Rate" has the same meaning set forth in Section 4(d) of
Annex I.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
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"Authorized Officer" of a Person means any Person that is authorized to
legally bind such Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than Saturday, Sunday or any other day
on which banking institutions in New York City, are permitted or required by any
applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code ss. 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
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.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the "Closing Date" under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.1(a).
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"Common Securities Guarantee" means the guarantee agreement to be dated as
of ___________, 199__ of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Comparable Treasury Issue" has the meaning set forth in Section 4(d) of
Annex I.
"Comparable Treasury Price" has the meaning set forth in Section 4(d) of
Annex I.
"Corporate Trust Office" means the office of the Institutional Trustee at
which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at Rodney Square North, 9th Floor, 1100
North Market Street, Wilmington, Delaware 19890-0001.
"Coupon Rate" has the meaning set forth in Section 2(a) of Annex I.
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Citicorp, a Delaware corporation, or any
successor entity resulting from any consolidation, amalgamation, merger or other
business combination, in its capacity as issuer of the Debentures under the
Indenture.
"Debenture Trustee" means Wilmington Trust Company, a national banking
association duly organized and existing under
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the laws of the United States, as trustee under the Indenture until a successor
is appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the Debenture
Issuer under the Indenture to be held by the Institutional Trustee, a specimen
certificate for such series of Debentures being Exhibit B.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Dissolution Tax Opinion" has the meaning set forth in Annex I hereto.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of Default
(as defined in the Indenture) that has occurred and is continuing in respect of
the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
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"Indenture" means the Indenture dated as of December 17, 1996, among the
Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"Institutional Trustee" has the meaning set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"No Recognition Opinion" has the meaning set forth in Annex I hereto.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman, a Vice Chairman, a Vice President, the Chief Auditor,
the Treasurer, the Secretary or an Assistant Secretary of such Person. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Declaration shall include:
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(a) a statement that each officer signing the Certificate has read
the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 7.2.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning specified in Section 7.1(a).
"Preferred Securities Guarantee" means the guarantee agreement to be dated
as of ___________, 199__, of the Sponsor in respect of the Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
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"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement between the Trust, the
Debenture Issuer and the underwriters designated by the Regular Trustees with
respect to the offer and sale of the Preferred Securities.
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both of them.
"Quotation Agent" has the meaning set forth in Section 4(d) of Annex I.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Regulatory Capital Event" has the meaning set forth in Annex I hereto.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Institutional Trustee,
any officer within the Corporate Trust Office of the Institutional Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
successor rule or regulation.
"Securities" means the Common Securities and the Preferred Securities.
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"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Sponsor" means Citicorp, a Delaware corporation, or any successor entity
resulting from any merger, consolidation, amalgamation or other business
combination, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section 5.7.
"Successor Institutional Trustee" has the meaning set forth in Section
5.7.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding 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 accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person
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shall continue in office in accordance with the terms hereof, and all other
Persons who may from time to time be duly appointed, qualified and serving as
Trustees in accordance with the provisions hereof, and references herein to a
Trustee or the Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Property" means (i) the Debentures, (ii) any cash on deposit in, or
owing to, the Institutional Trustee Account and (iii) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held by the Institutional Trustee for the Trust pursuant to this Declaration.
"Underwriting Agreement" means the Underwriting Agreement for the offering
and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by ss.ss. 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as
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equity securities representing undivided beneficial interests in the assets of
the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Institutional
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Institutional Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Institutional Trustee. The Institutional Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in Lists
of Holders given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity) provided that the Institutional Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations under
ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after May 15 of each year, the Institutional Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by ss. 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by ss. 313 of the Trust Indenture Act. The Institutional Trustee shall
also comply with the requirements of ss. 313(d) of the Trust Indenture Act.
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SECTION 2.4 Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such documents, reports and information as
required by ss. 314 (if any) and the compliance certificate required by ss. 314
of the Trust Indenture Act in the form, in the manner and at the times required
by ss. 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the proportion
in liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.
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The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section 2.6(b), the Event
of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have
waived such Event of Default under the Declaration as provided below in
this Section 2.6(b), the Event of Default under the Declaration may only
be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of
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Default with respect to the Common Securities and its consequences until all
Events of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated, and until such Events of Default have been so
cured, waived or otherwise eliminated, the Institutional Trustee will be deemed
to be acting solely on behalf of the Holders of the Preferred Securities and
only the Holders of the Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
such waiver, any such default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee, at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(d) The Institutional Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities actually known to a Responsible Officer of the Institutional Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Event of Default as defined in the Indenture, not including any periods of grace
provided for
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therein and irrespective of the giving of any notice provided therein); provided
that, except for a default in the payment of principal of (or premium, if any)
or interest on any of the Debentures or in the payment of any sinking fund
installment established for the Debentures, the Institutional Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Institutional Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Securities.
(e) The Institutional Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.01(a) and 5.01(b) of the Indenture;
or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Citicorp Capital XI" as such name may be modified from
time to time by the Regular Trustees following written notice to the Holders of
Securities. The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o
Citicorp, 399 Park Avenue, New York, New York 10043 Attn: Treasurer. On ten
Business Days written notice to the Holders of Securities, the Regular Trustees
may designate another principal office.
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SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary, or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and the
Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
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(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one
series of 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 Securities shall be
limited to a simultaneous issuance of both Preferred Securities and Common
Securities on each Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the Preferred Securities
in any State in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc. or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing upon notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by
the Sponsor, relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement and
Pricing Agreement providing for the sale of the Preferred
Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Securities; provided, however, that the Regular Trustees shall cause legal
title to the Debentures
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to be held of record in the name of the Institutional Trustee for the
benefit of the Holders of the Preferred Securities and the Holders of
Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Tax Event or Regulatory Capital Event;
provided that the Regular Trustees shall consult with the Sponsor and the
Institutional Trustee before taking or refraining from taking any
ministerial action in relation to a Tax Event or Regulatory Capital Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of ss. 316(c) of the Trust Indenture
Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
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(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities or to appoint a Paying Agent for the
Securities as provided in Section 7.2;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
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(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders in any material respect; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall not take any action that
is inconsistent with the purposes and functions of the Trust set forth in
Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Institutional Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.6
shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) on behalf of the Trust shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust not
to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
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(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under the Indenture, (C) exercise
any right to rescind or annul any declaration that the principal of all
the Debentures shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required unless the Trust shall have received an opinion
of a nationally recognized independent counsel experienced in such matters
to the effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes the
Trust will not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of record
in the name of the Institutional Trustee in trust for the benefit of the Holders
of the Securities. The right, title and interest of the Institutional Trustee to
the Debentures shall vest automatically in each Person who may hereafter be
appointed as Institutional Trustee in accordance with Section 5.7. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
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(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee, except as provided in
Section 7.2 hereof, on behalf of the Holders of the Securities and, upon
the receipt of payments of funds made in respect of the Debentures held by
the Institutional Trustee, deposit such funds into the Institutional
Trustee Account and make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the Institutional
Trustee Account in accordance with Section 6.1. Funds in the Institutional
Trustee Account shall be held uninvested until disbursed in accordance
with this Declaration. The Institutional Trustee Account shall be an
account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the rating assigned
to the Preferred Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the
occurrence of a Tax Event or a Regulatory Capital Event.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
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(e) The Institutional Trustee shall take any Legal Action which arises out
of or in connection with (i) an Event of Default of which a Responsible Officer
of the Institutional Trustee has actual knowledge or (ii) the Institutional
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act, and if such Institutional Trustee shall have failed to take such Legal
Action, the Holders of the Preferred Securities may take such Legal Action, to
the same extent as if such Holders of Preferred Securities held a principal
amount of Debentures equal to the liquidation amount of such Preferred
Securities, without first proceeding against the Institutional Trustee or the
Trust; provided however, that if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a Holder of Preferred Securities may directly institute a proceeding
for enforcement of payment to such Holder of the principal of or interest then
due on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder (a "Direct
Action") on or after the respective due date specified in the Debentures. In
connection with such Direct Action, the rights of the Holders of the Common
Securities will be subrogated to the rights of such Holder of Preferred
Securities to the extent of any payment made by the Issuer to such Holder of
Preferred Securities in such Direct Action. Except as provided in the preceding
sentences, the Holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures.
(f) The Institutional Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.7.
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(g) The Institutional Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) The Institutional Trustee shall be authorized to undertake any actions
set forth in ss. 317(a) of the Trust Indenture Act.
(i) Subject to this Section 3.8, the Institutional Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and in the Securities and no implied covenants shall be read
into this Declaration against the Institutional Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section 2.6)
of which a Responsible Officer of the Institutional Trustee has actual
knowledge, the Institutional Trustee shall exercise such of the rights and
powers vested in it by this Declaration, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for
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its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and in the Securities and the Institutional Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration and in
the Securities, and no implied covenants or obligations shall be
read into this Declaration against the Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; provided, however, that in the
case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Institutional Trustee, the Institutional Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Outstanding Preferred Securities relating to the
time, method and place of conducting any proceeding for any remedy
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available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Institutional Trustee under this Declaration and
the Trust Indenture Act and, to the extent applicable, Rule 3a-7 under the
Investment Company Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing
with the Sponsor. Money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the
Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise required
by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be
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liable for any default or misconduct of the Regular Trustees or the
Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with
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such advice or opinion, such counsel may be counsel to the Sponsor or any
of its Affiliates, and may include any of its employees. The Institutional
Trustee shall have the right at any time to seek instructions concerning
the administration of this Declaration from any court of competent
jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of
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the Securities, and the signature of the Institutional Trustee or its
agents alone shall be sufficient and effective to perform any such action
and no third party shall be required to inquire as to the authority of the
Institutional Trustee to so act or as to its compliance with any of the
terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Institutional Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration;
(xii) the Institutional Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration; and
(xiii) if (A) in performing its duties under this Declaration the
Institutional Trustee is required to decide between alternative courses of
action or (B) in construing any of the provisions in this Declaration, the
Institutional Trustee finds the same ambiguous or same inconsistent with
any other provisions contained herein or (C) the Institutional Trustee is
unsure of the application of any provision of this Declaration, then,
except as to any matter
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as to which the Preferred Securities Holders are entitled to vote under
the terms of this Declaration, the Institutional Trustee shall deliver a
notice to the Sponsor requesting written instructions of the Sponsor as to
the course of action to be taken. The Institutional Trustee shall take
such action, or refrain from taking such action, as the Institutional
Trustee shall be instructed in writing to take, or to refrain from taking,
by the Sponsor and shall be fully and conclusively protected in taking or
refraining from taking such action as so instructed; provided, however,
that the Institutional Trustee shall be under no duty to take any action
unless and until so instructed by the Sponsor; and provided, further, that
if the Institutional Trustee does not receive such instructions of the
Sponsor within ten Business Days after it has delivered such notice, or
such reasonably shorter period of time set forth in such notice (which to
the extent practicable shall not be fewer than two Business days), it may,
but shall be under no duty to, take or refrain from taking any such action
not inconsistent with this Declaration as it shall deem advisable and in
the best interest of the Securities Holders, in which event the
Institutional Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct.
(b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Institutional Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than Section
5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Regular Trustees or the Institutional Trustee described in this
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Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of
ss.3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is authorized
to execute on behalf of the Trust any documents that the Regular Trustees have
the power and authority to execute pursuant to Section 3.6; provided that, the
registration statement referred to in Section 3.6(b)(i), including any
amendments thereto, shall be signed by a majority of or, if there are less than
three, all of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall dissolve on February 15, 2052.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees and without the consent of
the Holders of the Securities, the Delaware Trustee or the Institutional
Trustee,
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consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State; provided that:
(i) if the Trust is not the surviving entity, such successor entity
(the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same as
the Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed or quoted, or any Successor Securities will be so upon notice of
issuance, on any national securities exchange or other organization on
which the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of counsel to the Trust
to the effect that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Preferred Securities Guarantee and the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger or replacement would cause the Trust or
the Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
SECTION 3.16 Limitation to Trust Property.
All payments made by the Institutional Trustee or a Paying Agent in
respect of the Securities shall be made only from the income and proceeds from
the Trust Property and only to the
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extent that there shall be sufficient income or proceeds from the Trust Property
to enable the Institutional Trustee or Paying Agent to make payments in
accordance with the terms hereof. Each Holder, by its acceptance of a Security,
agrees that it will look solely to the income and proceeds from the Trust
Property to the extent available for distribution to it as herein provided and
that the Trustees shall not be personally liable to it for any amount
distributable in respect of any Security or for any other liability in respect
of any Security; provided that this Section 3.16 does not limit the liability of
the Trustees expressly set forth elsewhere in this Declaration or, in the case
of the Institutional Trustee, in the Trust Indenture Act.
SECTION 3.17 Compensation and Fees.
(a) The Sponsor agrees:
(i) to pay the Institutional Trustee from time to time compensation
for all services rendered by the Institutional Trustee hereunder in
accordance with a separate fee agreement between the Sponsor and the
Institutional Trustee (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); and
(ii) except as otherwise expressly provided herein, to reimburse the
Institutional Trustee upon request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the
Institutional Trustee in accordance with any provision of this Declaration
(including the reasonable compensation and the expenses and disbursements
of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence, bad faith or willful
misconduct.
(b) The provisions of this Section shall survive the termination of this
Declaration.
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ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust at the same time as the Preferred Securities are
sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and
to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
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(e) to negotiate the terms of the Underwriting Agreement and Pricing
Agreement providing for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be three (3), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities; provided, however, that, the
number of Trustees shall in no event be less than two (2); provided
further that (1) one Trustee shall be the Delaware Trustee; (2) there
shall be at least one Trustee who is an employee or officer of, or is
affiliated with the Sponsor (a "Regular Trustee"); and (3) one Trustee
shall be the Institutional Trustee for so long as this Declaration is
required to qualify as an indenture under the Trust Indenture Act, and
such Trustee may also serve as Delaware Trustee if it meets the applicable
requirements.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
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provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a financial institution organized and doing business under
the laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 5.3(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Institutional Trustee shall cease to be eligible to
so act under Section 5.3(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 5.7(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of ss. 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in all
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respects comply with the provisions of ss. 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be:
Wilmington Trust Company
SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 Regular Trustees.
The initial Regular Trustees shall be:
Peter Gallant
John F. Rice
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by a majority
of or, if there are less than three, all of the Regular Trustees; and
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(c) a Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purposes of signing any documents which the Regular Trustees have power
and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Wilmington Trust Company
SECTION 5.7 Appointment, Removal and Resignation of
Trustees.
(a) Subject to Section 5.7(b), Trustees may be appointed or removed
without cause at any time except during an Event of Default:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities.
(b)(i) The Trustee that acts as Institutional Trustee shall not be removed
in accordance with Section 5.7(a) until a successor Trustee possessing the
qualifications to act as Institutional Trustee under Section 5.3 (a "Successor
Institutional Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Institutional Trustee and
delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with this Section 5.7(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections
5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such Successor
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Delaware Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the Sponsor
and the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Delaware Trustee or Successor Institutional Trustee
as the case may be if the Institutional Trustee or the Delaware Trustee delivers
an instrument of resignation in accordance with this Section 5.7.
(e) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.7 within 60 days after delivery of an instrument of resignation or removal,
the Institutional Trustee or Delaware Trustee resigning or being
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removed, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.7, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.10 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
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Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
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SECTION 5.12 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
SECTION 5.13 Co-Trustees and Separate Trustee.
(a) Unless an Event of Default shall have occurred and be continuing, at
any time or times for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property may
at the time be located, the Sponsor and the Institutional Trustee shall have
power to appoint, and upon the written request of the Institutional Trustee, the
Sponsor shall for such purpose join with the Institutional Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Institutional Trustee
either to act as co-trustee, jointly with the Institutional Trustee, of all or
any part of such Trust Property, or to act as separate trustee of any such
property, in either case with such powers as may be provided in the instrument
of appointment, and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section 5.13. If the Sponsor does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case of an Event of Default has occurred and is continuing, the Institutional
Trustee alone shall have power to make such appointment.
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(b) Should any written instrument from the Sponsor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Sponsor.
(c) Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(i) The Securities shall be executed and delivered and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees designated for such purpose
hereunder, shall be exercised, solely by such Trustees.
(ii) The rights, powers, duties and obligations hereby conferred or
imposed upon the Institutional Trustee in respect of any property covered
by such appointment shall be conferred or imposed upon and exercised or
performed by the Institutional Trustee or by the Institutional Trustee and
such co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any particular act
is to be performed, the Institutional Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such co-trustee
or separate trustee.
(iii) The Institutional Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Sponsor, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section 5.13, and, in case an Event of Default has
occurred and is continuing, the Institutional Trustee shall have power to
accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Sponsor. Upon the written request
of the Institutional Trustee, the Sponsor shall join with the
Institutional Trustee in the execution, delivery and performance of all
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instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner provided in this
Section 5.13.
(iv) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Institutional Trustee.
(v) The Institutional Trustee shall not be liable by reason of any
act or omission of a co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the Institutional Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in accordance with
the applicable terms of the relevant Holder's Securities. Distributions shall be
made on the Preferred Securities and the Common Securities in accordance with
the preferences set forth in their respective terms. If and to the extent that
the Debenture Issuer makes a payment of interest (including Compounded Interest
(as defined in the Indenture) and Additional Interest), premium and/or principal
on the Debentures held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class of
preferred securities representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in Annex I (the "Preferred
Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Common Securities.") The Trust shall issue no securities
or other interests in the assets of the Trust other than the Preferred
Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a Regular
Trustee. Such signature shall be the manual or facsimile signature of any
present or any future Regular Trustee. In case any Regular Trustee of the Trust
who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) A Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Institutional Trustee. The signature
shall be conclusive
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evidence that the Security has been authenticated under this Declaration.
The Institutional Trustee may appoint an authenticating agent acceptable
to the Trust to authenticate Securities. An authenticating agent may
authenticate Securities whenever the Institutional Trustee may do so. Each
reference in this Declaration to authentication by the Institutional Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Institutional Trustee to deal with the Sponsor or an Affiliate.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration and
the receipt of the consideration therefor, the Securities so issued shall be
deemed to be validly issued, fully paid and non-assessable.
(f) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
SECTION 7.2 Paying Agent.
The Trust shall appoint an agent (the "Paying Agent"), which shall
initially be Citibank, N.A., which shall make Distributions to the Securities
Holders from the Institutional Trustee Account and shall report the amounts of
such Distributions to the Regular Trustees and the Institutional Trustee. Any
Paying Agent shall have the revocable power to withdraw funds from the
Institutional Trustee Account for the purpose of making the Distributions. The
Institutional Trustee shall be entitled to rely upon a certificate of the Paying
Agent stating the amount of such funds so to be withdrawn and that the same are
to be applied by the Paying Agent in accordance with this Section 7.2. The
Regular Trustees may revoke such power and remove the Paying Agent in their sole
discretion. The Paying
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Agent may choose any co-paying agent that is acceptable to the Regular Trustees.
The Paying Agent shall be permitted to resign upon 30 days' notice to the
Regular Trustees. In the event of the removal or resignation of the Paying
Agent, the Regular Trustees shall appoint a successor that is reasonably
acceptable to the Institutional Trustee to act as Paying Agent (which shall be a
bank, trust company or an Affiliate of the Sponsor). The Regular Trustee shall
cause such successor Paying Agent or any additional Paying Agent appointed to
execute and deliver to the Trustees an instrument in which such Paying Agent or
additional Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Securities Holders in trust for the benefit of the
Securities Holders entitled thereto until such sums shall be paid to such
Securities Holders. The Paying Agent shall return all unclaimed funds to the
Institutional Trustee and upon resignation or removal of a Paying Agent such
Paying Agent also shall return all funds in its possession to the Institutional
Trustee. The provisions of Sections 3.8(d), 3.9, 3.10 and 3.17 shall apply to
the Paying Agent appointed hereunder, and the Paying Agent shall be bound by the
requirements with respect to paying agents of securities issued pursuant to the
Trust Indenture Act. Any reference in this Declaration to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust.
(a) The Trust shall dissolve:
(i) on February 15, 2052, the expiration term of the Trust;
(ii) upon the bankruptcy of the Sponsor;
(iii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; the consent of at least a majority
in liquidation amount of the Securities affected thereby voting together
as a single
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class to file a certificate of cancellation with respect to the Trust or
the revocation of the Sponsor's charter and the expiration of 90 days
after the date of revocation without a reinstatement thereof;
(iv) upon the election by the Regular Trustees to dissolve the
Trust, following the occurrence of a Tax Event or a Regulatory Capital
Event in accordance with the terms of the Securities and the distribution
of all of the Debentures endorsed thereon to the Holders of Securities in
exchange for all of the Securities;
(v) upon the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor or the Trust;
(vi) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Securities;
or
(vii) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a), and upon the completion of the winding up of the Trust, one
of the Trustees (each of whom is hereby authorized to take such action) shall
file a certificate of cancellation with the Secretary of State of the State of
Delaware terminating the Trust.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. Any
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transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) The Sponsor may not transfer the Common Securities.
SECTION 9.2 Transfer of Certificates.
(a) The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Trust or the Sponsor
may reasonably require) in respect of any tax or other government charges that
may be imposed in relation to it. Upon surrender for registration of transfer of
any Certificate, the Regular Trustees shall cause one or more new Certificates
to be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
(b) Upon receipt by the Institutional Trustee of a Definitive Preferred
Security Certificate, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Institutional Trustee, requesting transfer
of such Definitive Preferred Security Certificate for a beneficial interest in a
Global Certificate, the Institutional Trustee shall cancel such Definitive
Preferred Security Certificate and cause, or direct the Clearing Agency to
cause, the aggregate number of Preferred Securities represented by the
appropriate Global Certificate to be increased accordingly. If no Global
Certificates are then outstanding, the Trust shall issue and the Institutional
Trustee shall authenticate, upon written order of
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any Regular Trustee, an appropriate number of Preferred Securities in global
form.
(c) Upon receipt by the Institutional Trustee from the Clearing Agency or
its nominee on behalf of any Person having a beneficial interest in a Global
Certificate of written instructions or such other form of instructions as is
customary for the Clearing Agency or the person designated by the Clearing
Agency, requesting transfer of a beneficial interest in a Global Certificate for
a Definitive Preferred Security Certificate, then the Institutional Trustee or
the securities custodian, at the direction of the Institutional Trustee, will
cause, in accordance with the standing instructions and procedures existing
between the Clearing Agency and the securities custodian, the aggregate
principal amount of the Global Certificate to be reduced on its books and
records and, following such reduction, the Trust will execute and the
Institutional Trustee will authenticate and deliver to the transferee a
Definitive Preferred Security Certificate.
Definitive Preferred Security Certificates issued in exchange for a
beneficial interest in a Global Certificate shall be registered in such names
and in such authorized denominations as the Clearing Agency, pursuant to
instructions from its Clearing Agency Participants or indirect participants or
otherwise, shall instruct the Institutional Trustee. The Institutional Trustee
shall deliver such Preferred Securities to the persons in whose names such
Preferred Securities are so registered in accordance with the instructions of
the Clearing Agency.
(d) Notwithstanding any other provisions of this Declaration, a Global
Certificate may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or another nominee of the Clearing Agency or by
the Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the
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Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities, the
Preferred Securities Certificates, on original issuance, will be issued in the
form of one or more, fully registered, global Preferred Security Certificates
(each a "Global Certificate"), to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Global Certificates shall initially
be registered on the books and records of the Trust in the name of Cede & Co.,
the nominee of DTC, and no Preferred Security Beneficial Owner will receive a
definitive Preferred Security Certificate representing such Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 9.7. Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
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(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants.
Clearing Agency Participants shall have no rights under this Declaration
with respect to any Global Certificate held on their behalf by the Clearing
Agency or by the Institutional Trustee as the custodian of the Clearing Agency
or under such Global Certificate, and the Clearing Agency may be treated by the
Trust, the Institutional Trustee and any agent of the Trust or the Institutional
Trustee as the absolute owner of such Global Certificate for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Trust, the Institutional Trustee or any agent of the Trust or the Institutional
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Clearing Agency or impair, as between the
Clearing Agency and its Clearing Agency Participants, the operation of customary
practices of such Clearing Agency governing the exercise of the rights of a
holder of a beneficial interest in any Global Certificate.
At such time as all beneficial interests in a Global Certificate have
either been exchanged for Definitive Preferred Security Certificates to the
extent permitted by this Declaration or redeemed, repurchased or canceled in
accordance with the terms of this Declaration, such Global Certificate shall be
returned to the Clearing Agency for cancellation or retained and canceled by the
Institutional Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Certificate is exchanged for Definitive Preferred Security
Certificates, or if Definitive Preferred Security Certificates are exchanged for
a beneficial interest in a Global Certificate, Preferred Securities represented
by such Global Certificate shall be reduced or increased and an adjustment shall
be made on the books and records of the Institutional Trustee (if it is then the
securities custodian for such Global Certificate) with respect to
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such Global Certificate, by the Institutional Trustee or the securities
custodian, to reflect such reduction or increase.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security Holders
is required under this Declaration, unless and until Definitive Preferred
Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
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(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Preferred Security Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the instructions
of the Clearing Agency. Neither the Trustees nor the Trust shall be liable
for any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on, said
instructions of the Clearing Agency. The Definitive Preferred Security
Certificates shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the Regular Trustees,
as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends
or endorsements as the Regular Trustees may deem appropriate, or as may be
required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which Preferred Securities may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless,
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that
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may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of an ownership
interest in the relevant Securities, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
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ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Debenture Issuer shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders of the
Securities shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or
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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 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees and expenses), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo
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contendere or its equivalent, shall not, of itself, create a presumption
that the Company Indemnified Person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in
its favor by reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees and expenses) actually
and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the Trust
unless and only to the extent that the Court of Chancery of Delaware or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court)
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shall be made by the Debenture Issuer only as authorized in the specific
case upon a determination that indemnification of the Company Indemnified
Person is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority vote
of a quorum consisting of such Regular Trustees who were not parties to
such action, suit or proceeding, (2) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion, or (3) by the
Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by the Debenture Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) by the
Debenture Issuer that, based upon the facts known to the Regular Trustees,
counsel or the Debenture Issuer at the time such determination is made,
such Company Indemnified Person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to the best interests
of the Trust, or, with respect to any criminal proceeding, that such
Company Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in instances
where the Regular Trustees, independent legal counsel or Debenture Issuer
reasonably determine that such person deliberately breached his duty to
the Trust or its Common or Preferred Security Holders.
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(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the
Debenture Issuer or Preferred Security Holders of the Trust or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office. All rights to indemnification under
this Section 10.4(a) shall be deemed to be provided by a contract between
the Debenture Issuer and each Company Indemnified Person who serves in
such capacity at any time while this Section 10.4(a) is in effect. Any
repeal or modification of this Section 10.4(a) shall not affect any rights
or obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not
the Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or is
or was serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in the
same position under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or
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ratified, continue as to a person who has ceased to be a Company
Indemnified Person and shall inure to the benefit of the heirs, executors
and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense including taxes (other
than taxes based on the income of such Fiduciary Indemnified Person) incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration or the trust or trusts hereunder,
including the costs and expenses (including reasonable legal fees and expenses)
of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to
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recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Institutional Trustee may engage or
be interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year,
or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail, each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes.
(b) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(c) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority, an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law,
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and any other annual income tax returns required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
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ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may only be amended by a written
instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is
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permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without the
consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders of
a Majority in liquidation amount of the Common Securities and;
(f) the rights of the Holders of the Common Securities under Article V to
increase or decrease the number of, and appoint and remove Trustees shall not be
amended without the consent of the Holders of a Majority in liquidation amount
of the Common Securities; and
(g) Sections 12.1(a)(ii) and 12.1(b) shall not be amended without the
consent of the Institutional Trustee and Section 12.1(a)(iii) shall not be
amended without the consent of the Delaware Trustee; and
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(h) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor, provided such amendment does not have a material adverse effect
on the rights, preferences or privileges of the Holders;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) to modify, eliminate or add to any provision of the Declaration
to such extent as may be necessary to eliminate or reduce the adverse
effects resulting from the occurrence of a Tax Event or Regulatory Capital
Event, provided such amendment does not have a material adverse effect on
the rights, preferences or privileges of the Holders.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the 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
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shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Security Certificates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be counted for purposes
of determining whether the required percentage set forth in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least seven days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at
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a meeting. No proxy shall be valid after the expiration of 11 months from
the date thereof unless otherwise provided in the proxy. Every proxy shall
be revocable at the pleasure of the Holder of Securities executing it.
Except as otherwise provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the General Corporation
Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional
Trustee.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at
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the time of the Successor Institutional Trustee's acceptance of its appointment
as Institutional Trustee that:
(a) the Institutional Trustee is a Delaware banking corporation with
trust powers and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Institutional Trustee. The Declaration
has been duly executed and delivered by the Institutional Trustee, and it
constitutes a legal, valid and binding obligation of the Institutional
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in
equity or at law);
(c) the execution, delivery and performance of this Declaration by
the Institutional Trustee does not conflict with or constitute a breach of
the charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with
or notice to, any Delaware State or federal banking authority is required
for the execution, delivery or performance by the Institutional Trustee,
of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware
Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
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(a) The Delaware Trustee is duly organized, validly existing and in
good standing under the laws of the State of Delaware, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with
or notice to, any federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee, of this Declaration.
(d) The Delaware Trustee is a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
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Citicorp Capital XI
c/o Citicorp
399 Park Avenue
New York, New York 10043
Attention: Treasurer
Telecopy: (212) 527-2765
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of
to the Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Department
Telecopy: (302) 651-1576
(c) if given to the Institutional Trustee, at the Institutional
Trustee's mailing address set forth below (or such other address as the
Institutional Trustee may give notice of to the Holders of the
Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Trustee
Administration
Telecopy: (302) 651-1576
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(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
Citicorp
399 Park Avenue
New York, New York 10043
Attention: Treasurer
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be governed
by and interpreted in accordance with the laws of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to the
principles of conflict of laws of the State of Delaware or any other
jurisdiction that would call for the application of the law of any jurisdiction
other than the State of Delaware; provided, however, that there shall not be
applicable to the Trust, the Trustees or this Declaration any provision of the
laws (statutory or common) of the State of Delaware pertaining to trusts that
relate to or regulate, in a manner inconsistent with the terms hereof (a) the
filing with any court or governmental body or agency of trustee accounts or
schedules of trustee fees and charges, (b) affirmative requirements to post
bonds for trustees, officers, agents or employees of a trust, (c) the necessity
for obtaining court or other governmental approval concerning the acquisition,
holding or disposition of real or personal property, (d) fees or other sums
payable to trustees, officers, agents or employees of a trust, (e) the
allocation of receipts and expenditures to income or principal, (f) restrictions
or
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limitations on the permissible nature, amount or concentration of trust
investments or requirements relating to the titling, storage or other manner of
holding or investing trust assets or (g) the establishment of fiduciary or other
standards of responsibility or limitations on the acts or powers of trustees
that are inconsistent with the limitations or liabilities or authorities and
powers of the Trustees as set forth or referenced in this Declaration. Section
3540 of Title 12 of the Delaware Code shall not apply to the Trust.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
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SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
__________________________________
Peter Gallant, as Regular Trustee
__________________________________
John F. Rice, as Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:_________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By:_________________________
Name:
Title:
CITICORP,
as Sponsor
By:_________________________
Name: John F. Rice
Title: Vice President
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ANNEX I
TERMS OF
[____]% CAPITAL SECURITIES
[____]% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of ___________, 199__ (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities ("Preferred Securities"
or "Capital Securities") and the Common Securities are set out below (each
capitalized term used but not defined herein has the meaning set forth in the
Declaration or, if not defined in such Declaration, as defined in the Prospectus
referred to below):
1. Designation and Number.
(a) Preferred Securities. ,000 Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of ,000,000
dollars ($ ,000,000) and a liquidation amount with respect to the assets of the
Trust of $1,000 per preferred security, are hereby designated for the purposes
of identification only as " % Capital Securities" (the "Preferred Securities").
The Preferred Security Certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange on
which the Preferred Securities are listed.
(b) Common Securities. Common Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of ,000 dollars ($
,000) and a liquidation amount with respect to the assets of the Trust of $1,000
per common security, are hereby designated for the purposes of identification
only as " % Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and
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additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate per
annum of % (the "Coupon Rate") of the stated liquidation amount of $1,000 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears for more than one
semiannual Distribution period will bear additional distributions thereon
compounded semiannually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full semiannual
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full semiannual Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 180-day semiannual Distribution period.
(b) Distributions on the Securities will be cumulative, will accrue from
___________, 199__, and will be payable semiannually in arrears, on February 15
and August 15 of each year, commencing on ,199 , except as otherwise described
below. The Debenture Issuer has the right under the Indenture to defer payments
of interest by extending the interest payment period from time to time on the
Debentures for a period not exceeding 10 consecutive semiannual Distribution
periods, including the first such semiannual Distribution period during such
period (each an "Extension Period"), during which Extension Period no interest
shall be due and payable on the Debentures, provided that no Extension Period
shall extend beyond the maturity date of the Debentures. As a consequence of
such deferral, Distributions will also be deferred. Despite such deferral,
semiannual Distributions will continue to accrue with additional distributions
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded semiannually during
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any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further extensions within such Extension Period, may
not exceed 10 consecutive semiannual Distribution periods, including the first
semiannual Distribution period during such Extension Period, or extend beyond
the maturity date of the Debentures. Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust on the relevant record
dates. While the Preferred Securities remain in book-entry only form, the
relevant record dates shall be one Business Day prior to the relevant payment
dates which payment dates correspond to the interest payment dates on the
Debentures. Subject to any applicable laws and regulations and the provisions of
the Declaration, each such payment in respect of the Preferred Securities will
be made as described under the heading "Description of the Preferred Securities
- -- Book-Entry Only Issuance -- The Depository Trust Company" in the Prospectus
Supplement dated __________, 199_, to the Prospectus dated December 17, 1996
(together, the "Prospectus"), of the Trust included in the Registration
Statement on Form S-3 of the Sponsor, the Trust and certain other business
trusts. The relevant record dates for the Common Securities shall be the same
record date as for the Preferred Securities. If the Preferred Securities shall
not continue to remain in book-entry only form, the relevant record dates for
the Preferred Securities shall conform to the rules of any securities exchange
on which the securities are listed and, if none, shall be selected by the
Regular Trustees, which dates shall be at least one Business Day but not more
than ten Business Days before the relevant payment dates, which payment dates
correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, will cease
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to be payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable to
the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the Securities is not a Business Day,
then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay).
(d) If at any time while the Institutional Trustee is the Holder of any
Debentures, the Debenture Issuer is required to pay any Additional Interest to
the Trust or the Institutional Trustee under the Debentures, the Payment Amount
with respect to Distributions on the Securities pursuant to Section 6.1 of the
Declaration shall include any such Additional Interest.
(e) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up or
liquidation of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, an amount equal to the aggregate of the stated liquidation amount of
$1,000 per Security plus accrued and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"), unless, in
connection with such dissolution, winding-up or termination, Debentures in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities
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in exchange for such Securities, after paying or making reasonable provision to
pay all claims and obligations of the Trust in accordance with Section 3808(e)
of the Business Trust Act.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part, whether at
maturity or upon redemption (either at the option of the Debenture Issuer at any
time on or after February 15, 200 or pursuant to a Tax Event or Regulatory
Capital Event at any time prior to February 15, 200 ), the proceeds from such
repayment or redemption shall be simultaneously applied to redeem, at the
Securities Redemption Price, Securities having an aggregate liquidation amount
equal to the aggregate principal amount of the Debentures so repaid or redeemed;
provided that holders will be given not less than 30 nor more than 60 days
notice of such redemption of Securities.
(b) The "Securities Redemption Price" for each $1,000 in stated
liquidation amount of Securities shall be:
(i) in the case of redemption of the Securities upon the maturity of
the Debentures, the liquidation amount of $1,000 per Security, plus
accrued and unpaid Distributions thereon to but excluding the date of
redemption; and
(ii) in the case of redemption of the Securities upon any redemption
of the Debentures by the Debenture Issuer (either at the option of the
Debenture Issuer at any time on or after February 15, 200 or pursuant to a
Tax Event or Regulatory Capital Event at any time prior to February 15,
200 ), equal to the applicable Redemption Price (as defined in the
Indenture) payable with respect to each $1,000 principal amount of
Debentures so redeemed in accordance with the terms of the Debentures.
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If, at any time, a Regulatory Capital Event shall occur and be continuing,
the Sponsor may (i) cause the Trust to be dissolved, with the result that after
satisfaction of liabilities to creditors, if any, Debentures with an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, the Securities, would be
distributed to the Holders of the Securities in liquidation of such holders'
interests in the Trust on a pro rata basis within 90 days following the
occurrence of such Regulatory Capital Event or (ii) within 90 days following the
occurrence of such Regulatory Capital Event, redeem the Debentures, in whole or
in part, upon not less than 30 nor more than 60 days' notice, for cash, with the
result that, following such redemption, the Securities will be redeemed by the
Trust at the Securities Redemption Price; provided, however, that if at the time
there is available to the Sponsor of the Trust the opportunity to eliminate
within such 90- day period, the Regulatory Capital Event by taking some
ministerial action, such as filing a form or making an election or pursuing some
other similar reasonable measure that has no adverse effect on the Trust, the
Sponsor or the holders of the Securities, then the Sponsor or the Trust will
pursue such measure in lieu of distribution or redemption of the Debentures.
(c) "Regulatory Capital Event" means a determination by the Sponsor, based
on an opinion of counsel experienced in such matters (who may be an employee of
the Sponsor or any of its affiliates), that, as a result of any amendment to,
clarification of or change (including any announced prospective change) in
applicable laws or regulations or official interpretations thereof or policies
with respect thereto, which amendment, clarification or change is effective
after the date of this Prospectus Supplement, there is more than an
insubstantial risk that the Preferred Securities will no longer constitute Tier
1 capital of the Sponsor (or its equivalent) for purposes of the capital
adequacy guidelines of the Board of Governors of the Federal Reserve System or
its successor as the Sponsor's primary federal banking regulator.
"Tax Event" means the Regular Trustees shall have received an opinion (a
"Dissolution Tax Opinion") of a nationally recognized independent tax counsel
experienced in such matters
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("Tax Counsel") to the effect that, as a result of (a) any amendment to,
clarification of or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after such date), there is more than an
insubstantial risk that (i) the Trust would be subject to United States federal
income tax with respect to income accrued or received on the Debentures, (ii)
interest payable to the Trust on the Debentures would not be deductible by the
Sponsor for United States federal income tax purposes or (iii) the Trust would
be subject to more than a de minimis amount of other taxes, duties or other
governmental charges, provided that any such change, clarification or amendment
becomes effective on or after the date of this Prospectus Supplement.
If, at any time, a Tax Event shall occur and be continuing, the Sponsor
may cause the Trust to be dissolved, with the result that after satisfaction of
liabilities to creditors, if any, Debentures with an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the distribution rate of, and accrued and unpaid interest equal to
accrued and unpaid distributions on, the Securities, would be distributed to the
holders of the Securities in liquidation of such holders' interests in the Trust
on a Pro Rata basis within 90 days following the occurrence of such Tax Event;
provided that such dissolution and distribution shall be conditioned on (i) the
Regular Trustees' receipt of an opinion of Tax Counsel (a "No Recognition
Opinion"), which opinion may rely on published revenue rulings of the Internal
Revenue Service, to the effect that the holders of the Securities will not
recognize any gain or loss for United States federal income tax purposes as a
result of such dissolution and distribution of Debentures and (ii) the Sponsor
being unable to avoid such Tax Event within such 90-day period by taking some
ministerial action or pursuing some other reasonable measure that will have no
adverse effect on the Trust, the Sponsor or the Holders of the Securities.
Furthermore, if after receipt of a Dissolution Tax Opinion by the Regular
Trustees (i) the Sponsor has received an opinion (a
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"Redemption Tax Opinion") of Tax Counsel that, as a result of a Tax Event, there
is more than an insubstantial risk that the Sponsor would be precluded from
deducting the interest on the Debentures for United States federal income tax
purposes, even after the Debentures were distributed to the holders of
Securities in liquidation of such Holders' interests in the Trust as described
above, or (ii) the Regular Trustees shall have been informed by such Tax Counsel
that it cannot deliver a No Recognition Opinion to the Trust, the Sponsor shall
have the right, within 90 days following the occurrence of such Tax Event, to
redeem the Debentures, in whole or in part, upon not less than 30 nor more than
60 days' notice, for cash, with the result that, following such redemption, the
Securities will be redeemed by the Trust at the Securities Redemption Price;
provided, however, that if at the time there is available to the Sponsor or the
Trust the opportunity to eliminate, within such 90-day period, the Tax Event by
taking some ministerial action, such as filing a form or making an election or
pursuing some other similar reasonable measure that has no adverse effect on the
Trust, the Sponsor or the Holders of the Securities, then the Sponsor or the
Trust will pursue such measure in lieu of redemption of the Debentures.
(d) In the case of an optional redemption, if fewer than all the
outstanding Securities are to be so redeemed, the Common Securities and the
Preferred Securities will be redeemed Pro Rata and the Preferred Securities to
be redeemed will be as described in Section 4(g)(ii) below.
(e) On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) The Depository Trust Company (the
"Depository") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Preferred Securities, will receive a registered
global certificate or certificates representing the Debentures to be delivered
upon such distribution and any certificates representing Securities, except for
certificates representing Preferred Securities held by the Depository or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Debentures having an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the Coupon Rate of, and accrued and unpaid interest equal to
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accrued and unpaid Distributions on such Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or reissue.
(f) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or before the date of
redemption.
(g) The procedure with respect to redemptions and distributions of
Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities
to be redeemed or exchanged not fewer than 30 nor more than 60 days before
the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 4(g)(i), a
Redemption/ Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of
record by the Depository or its nominee (or any successor Clearing Agency
or its nominee), the distribution of the proceeds of such redemption will
be made to each Clearing Agency Participant (or Person on whose behalf
such nominee
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holds such securities) in accordance with the procedures applied by such
agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are to be redeemed as set out in this Section 4 (which notice
will be irrevocable), then (A) while the Preferred Securities are in
book-entry only form, with respect to the Preferred Securities, by 12:00
noon, New York City time, on the redemption date, provided that the
Debenture Issuer has paid the Institutional Trustee a sufficient amount of
cash in connection with the related redemption or maturity of the
Debentures, the Institutional Trustee will deposit irrevocably with the
Depository or its nominee (or successor Clearing Agency or its nominee)
funds sufficient to pay the applicable Securities Redemption Price with
respect to the Preferred Securities and will give the Depository
irrevocable instructions and authority to pay the Securities Redemption
Price to the Holders of the Preferred Securities, and (B) with respect to
Preferred Securities issued in definitive form and Common Securities,
provided that the Debenture Issuer has paid the Institutional Trustee a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Institutional Trustee will pay the
relevant Securities Redemption Price to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books
and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds deposited
as required, if applicable, then immediately prior to the close of
business on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue on the Securities so called
for redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such Securities
to receive the Securities Redemption Price, but without interest on such
Securities Redemption Price. Neither the Regular Trustees nor the Trust
shall be required to register or cause to be registered the transfer of
any Securities that have been so called for redemption. If any date fixed
for redemption of Securities is not a Business Day, then payment of the
Securities Redemption Price payable
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on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Securities Redemption Price in respect of
any Securities is improperly withheld or refused and not paid either by
the Institutional Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the actual date of
payment, in which case the Securities Redemption Price shall include such
additional accrued Distributions.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, the Depository or its nominee (or any successor Clearing
Agency or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holder
thereof, and (B) in respect of the Common Securities to the Holder
thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws and banking laws),
provided the acquiror is not the Holder of the Common Securities or the
obligor under the Indenture, the Sponsor or any of its subsidiaries may at
any time and from time to time purchase outstanding Preferred Securities
by tender, in the open market or by private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise required
by law and the Declaration, the Holders of the Preferred Securities will have no
voting rights.
(b) Subject to the requirements set forth in this paragraph, the Holders
of a majority in aggregate liquidation amount of the Preferred Securities,
voting separately as a class
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may direct the time, method, and place of conducting any proceeding for any
remedy available to the Institutional Trustee, or exercise any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee, as holder of the Debentures, to (i)
exercise the remedies available under the Indenture, conduct any proceeding for
any remedy available to the Debenture Trustee, or exercise any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii) waive
any past default and its consequences that is waivable under Section 2.6 of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable, provided, however,
that, where a consent under the Indenture would require the consent or act of
the Holders of greater than a majority of the Holders in principal amount of
Debentures affected thereby, (a "Super Majority"), the Institutional Trustee may
only give such consent or take such action at the written direction of the
Holders of at least the proportion in liquidation amount of the Preferred
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. The Institutional Trustee shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Preferred Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Institutional Trustee
or the Debenture Trustee as set forth above, the Institutional Trustee shall not
take any action in accordance with the directions of the Holders of the
Preferred Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Institutional Trustee fails to
enforce its rights under the Declaration, any Holder of Preferred Securities may
institute a legal proceeding directly against any person to enforce the
Institutional Trustee's rights under the Declaration without first instituting a
legal proceeding against the Institutional Trustee or any other person. If a
Declaration Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay interest or principal
on the Debentures on the date such interest or principal is otherwise payable
(or in the case of redemption, on the redemption date), then a holder of
Preferred Securities
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may directly institute a proceeding for enforcement of payment to such Holder of
the principal of or interest on the Debentures having a principal amount equal
to the aggregate liquidation amount of the Preferred Securities of such holder
(a "Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the holders of
the Common Securities Holder will be subrogated to the rights of such holder of
Preferred Securities to the extent of any payment made by the Issuer to such
holder of Preferred Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall
not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding, unless all of the Preferred
Securities are owned by the sponsor or any such Affiliate.
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6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c), 7(a) and 8 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace any Trustee
or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the Event of
Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 2.6 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable, provided that, where a consent or
action under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Debentures affected thereby (a
"Super Majority"), the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Pursuant to this Section 6(c), the Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Institutional Trustee or the
Debenture Trustee as set forth above, the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Common
I-14
<PAGE>
Securities under this paragraph unless the Institutional Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Institutional Trustee fails to enforce
its rights under the Declaration, any Holder of Common Securities may institute
a legal proceeding directly against any Person to enforce the Institutional
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given at
a separate meeting of Holders of Common Securities convened for such purpose, at
a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the Declaration,
if any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of any or all of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single
I-15
<PAGE>
class will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities affected thereby; provided, that, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the Preferred Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of a
Majority in liquidation amount of such class of Securities.
(b) In the event the consent of the Institutional Trustee as the holder of
the Debentures is required under the Indenture with respect to any amendment,
modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where the taking of any such action under the
Indenture would require the consent of the holders of greater than a majority in
aggregate principal amount of the Debentures (a "Super Majority"), the
Institutional Trustee may only give such consent at the direction of the Holders
of at least the proportion in liquidation amount of the Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding; provided, further, that where the taking of any such
action under the Indenture would require the consent of every holder of the
Debentures, the consent of all holders of Securities shall be required;
provided, further, that the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Securities under this
Section 7(b) unless the Institutional Trustee has obtained an opinion of
nationally recognized independent tax counsel in such matters to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
I-16
<PAGE>
8. Pro Rata.
A reference in these terms of the Securities to any payment, distribution
or treatment as being "Pro Rata" shall mean pro rata to each Holder of
Securities according to the aggregate liquidation amount of the Securities held
by the relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu with the Common Securities and
payment thereon shall be made Pro Rata with the Common Securities, except that,
if an Event of Default under the Declaration occurs and is continuing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall be made
until the Holders of the Preferred Securities shall be paid in full the
Distributions, redemption, liquidation and other payments to which they are
entitled.
10. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
I-17
<PAGE>
The Holders of the Securities shall have no preemptive rights to subscribe
for any additional securities.
12. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate)
and the Indenture (including any supplemental indenture) to a Holder without
charge on written request to the Sponsor at its principal place of business.
The Securities shall be governed by and interpreted in accordance with the
laws of the State of Delaware, and all rights and remedies shall be governed by
such laws without regard to principles of conflict of laws.
I-18
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
This Preferred Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary. This
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 is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Securities
CUSIP NO. __________
Certificate Evidencing Preferred Securities
of
Citicorp Capital XI
% Capital Securities
(liquidation amount $1,000 per Capital Security)
A1-1
<PAGE>
Citicorp Capital XI, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that ______________ (the
"Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the % Capital Securities (liquidation amount $1,000 per Capital
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of ___________, 199__, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of __________, 199 .
Citicorp Capital XI
By:________________________________
Name:
Title: Regular Trustee
A1-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated __________, ____
The Wilmington Trust Company,
as Institutional Trustee
By:__________________________
Authorized Signatory
or
Citibank, N.A.
as Authenticating Agent
By:__________________________
Authorized Signatory
A1-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate
per annum of % (the "Coupon Rate") of the stated liquidation amount of $1,000
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than one semiannual Distribution period will bear interest thereon
compounded semiannually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full semiannual Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full semiannual Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 180-day semiannual Distribution period.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semiannually in arrears, on February 15 and August 15 of
each year, commencing on _______________________________________________ ,199__,
to the holders of record on the relevant record dates (as specified in the
Declaration) next preceding such payment dates. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 10 consecutive semiannual interest periods, including the first such
semiannual Distribution period during such extension period (each an "Extension
Period"), provided that no Extension Period shall extend beyond the date of the
maturity of the Debentures. As a consequence of such deferral, Distributions
will also be deferred. Despite such deferral, semiannual Distributions will
continue to accrue with interest thereon (to the extent permitted by applicable
law) at the Coupon Rate compounded semiannually during any such Extension
Period. Prior to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together with all such
previous and further
A1-4
<PAGE>
extensions within such Extension Period, may not exceed 10 consecutive
semiannual interest periods, including the first semiannual interest period
during such Extension Period, or extend beyond the maturity date of the
Debentures. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Upon the occurrence and continuation of a Tax Event, (x) the Sponsor shall
have the right, in certain circumstances described in Annex I to the
Declaration, to liquidate the Trust within 90 days following the occurrence of
such Tax Event and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust and (y) prior to February 15, 200 , the
Debenture Issuer shall have the right, in certain circumstances described in
Annex I to the Declaration, to redeem the Debentures in whole or in part within
90 days following the occurrence of such Tax Event and, following such
redemption, cause Securities with an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed to be redeemed by the
Trust.
Upon the occurrence and continuation of a Regulatory Capital Event, (x)
the Sponsor shall have the right to liquidate the Trust within 90 days following
the occurrence of such Regulatory Capital Event and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust and (y)
prior to February 15, 200 , the Debenture Issuer shall have the right to redeem
the Debentures in whole or in part within 90 days following the occurrence of
such Regulatory Capital Event and, following such redemption, cause Securities
with an aggregate liquidation amount equal to the aggregate principal amount of
the Debentures so redeemed to be redeemed by the Trust.
The Preferred Securities shall be redeemable as provided in the
Declaration.
A1-5
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________ agent to transfer
this Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee*: ___________________________________
- --------
* Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities and Exchange Act of 1934, as
amended.
A1-6
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
Citicorp Capital XI
___________________________ % Common Securities
(liquidation amount $1,000 per Common Security)
Citicorp Capital XI, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that Citicorp (the
"Holder") is the registered owner of common securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the %
Common Securities (liquidation amount $1,000 per Common Security) (the "Common
Securities"). The Common Securities are transferable on the books and records of
the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are 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 ___________, 199__, as the same may be amended from time
to time (the "Declaration"), including the designation of the terms of the
Common Securities as set forth in Annex I to the Declaration. Capitalized terms
used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Common Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of the
Declaration, the Common Securities Guarantee and the Indenture (including any
supplemental indenture) to a Holder without charge
A2-1
<PAGE>
upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ___ day
of , 199 .
CITICORP CAPITAL XI
By:________________________________
Name:
Title: Regular Trustee
A2-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the within-mentioned
Declaration.
Dated __________, ____
The Wilmington Trust Company,
as Institutional Trustee
By:__________________________
Authorized Signatory
or
Citibank, N.A.,
as Authenticating Agent
By:__________________________
Authorized Signatory
A2-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of % (the "Coupon Rate") of the stated liquidation amount of $1,000 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Institutional Trustee. Distributions in arrears for more than
one semiannual Distribution period will bear interest thereon compounded
semiannually at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full semiannual Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full semiannual
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 180-day
semiannual Distribution period.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semiannually in arrears, on February 15 and August 15 of
each year, commencing on ______________________________________-- , 199 , to
Holders of record fifteen (15) days prior to such payment dates, which payment
dates shall correspond to the interest payment dates on the Debentures. The
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period from time to time on the Debentures for
a period not exceeding 10 consecutive calendar semiannual interest periods,
including the first such quarter during such extension period (each an
"Extension Period"), provided that no Extension Period shall extend beyond the
date of the maturity of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, semiannual
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded semiannually during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further
A2-4
<PAGE>
extensions within such Extension Period, may not exceed 10 consecutive calendar
semiannual interest periods, including the first semiannual interest period
during such Extension Period, or extend beyond the maturity date of the
Debentures. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Upon the occurrence and continuation of a Tax Event, (x) the Sponsor shall
have the right, in certain circumstances described in Annex I to the
Declaration, to liquidate the Trust within 90 days following the occurrence of
such Tax Event and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust and (y) prior to February 15, 200 , the
Debenture Issuer shall have the right, in certain circumstances described in
Annex I to the Declaration, to redeem the Debentures in whole or in part within
90 days following the occurrence of such Tax Event and, following such
redemption, cause Securities with an aggregate liquidation amount equal to the
aggregate amount of the Debentures so redeemed to be redeemed by the Trust.
Upon the occurrence and continuation of a Regulatory Capital Event, (x)
the Sponsor shall have the right to liquidate the Trust within 90 days following
the occurrence of such Regulatory Capital Event and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust and (y)
prior to February 15, 200 , the Debenture Issuer shall have the right to redeem
the Debentures in whole or in part within 90 days following the occurrence of
such Regulatory Capital Event and, following such redemption, cause Securities
with an aggregate liquidation amount equal to the aggregate amount of the
Debentures so redeemed to be redeemed by the Trust.
The Common Securities shall be redeemable as provided in the Declaration.
A2-5
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert assignee's social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints ______________________________________________________
_______________________________________________________________________________
_____________________________________________ agent to transfer this Common
Security Certificate on the books of the Trust. The agent may substitute another
to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee*: ___________________________________
- --------
* Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities and Exchange Act of 1934, as
amended.
A2-6
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
AMENDED AND RESTATED DECLARATION
OF TRUST
CITICORP CAPITAL XIII
Dated as of ___________, 199__
1
<PAGE>
Page
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.............................................. 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application......................... 9
SECTION 2.2 Lists of Holders of Securities........................... 9
SECTION 2.3 Reports by the Institutional Trustee..................... 10
SECTION 2.4 Periodic Reports to Institutional Trustee................ 10
SECTION 2.5 Evidence of Compliance with Conditions
Precedent................................................ 10
SECTION 2.6 Events of Default; Waiver................................ 10
SECTION 2.7 Event of Default; Notice................................. 12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name..................................................... 13
SECTION 3.2 Office................................................... 13
SECTION 3.3 Purpose.................................................. 13
SECTION 3.4 Authority................................................ 13
SECTION 3.5 Title to Property of the Trust........................... 14
SECTION 3.6 Powers and Duties of the Regular Trustees................ 14
SECTION 3.7 Prohibition of Actions by the Trust and
the Trustees............................................. 17
SECTION 3.8 Powers and Duties of the Institutional
Trustee.................................................. 18
SECTION 3.9 Certain Duties and Responsibilities of
the Institutional Trustee................................ 20
SECTION 3.10 Certain Rights of Institutional Trustee.................. 22
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 Limitation to Trust Property............................. 28
i
<PAGE>
Page
SECTION 3.17 Compensation and Fees.................................... 29
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.................. 29
SECTION 4.2 Responsibilities of the Sponsor.......................... 29
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees....................................... 30
SECTION 5.2 Delaware Trustee......................................... 30
SECTION 5.3 Institutional Trustee; Eligibility....................... 31
SECTION 5.4 Certain Qualifications of Regular
Trustees and Delaware Trustee Generally.................. 32
SECTION 5.5 Regular Trustees......................................... 32
SECTION 5.6 Delaware Trustee......................................... 32
SECTION 5.7 Appointment, Removal and Resignation of
Trustees................................................. 33
SECTION 5.8 Vacancies among Trustees................................. 34
SECTION 5.9 Effect of Vacancies...................................... 34
SECTION 5.10 Meetings................................................. 35
SECTION 5.11 Delegation of Power...................................... 35
SECTION 5.12 Merger, Conversion, Consolidation or
Succession to Business................................... 36
SECTION 5.13 Co-Trustees and Separate Trustee......................... 36
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions............................................ 38
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.................. 38
SECTION 7.2 Paying Agent............................................. 39
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
ii
<PAGE>
Page
SECTION 8.1 Dissolution and Termination of Trust..................... 40
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities................................... 41
SECTION 9.2 Transfer of Certificates................................. 41
SECTION 9.3 Deemed Security Holders.................................. 43
SECTION 9.4 Book Entry Interests..................................... 43
SECTION 9.5 Notices to Clearing Agency............................... 45
SECTION 9.6 Appointment of Successor Clearing Agency................. 45
SECTION 9.7 Definitive Preferred Security
Certificates............................................. 45
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates............................................. 46
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability................................................ 46
SECTION 10.2 Exculpation.............................................. 47
SECTION 10.3 Fiduciary Duty........................................... 47
SECTION 10.4 Indemnification.......................................... 49
SECTION 10.5 Outside Businesses....................................... 52
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.............................................. 53
SECTION 11.2 Certain Accounting Matters............................... 53
SECTION 11.3 Banking.................................................. 53
SECTION 11.4 Withholding.............................................. 54
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments............................................... 54
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent................................ 57
iii
<PAGE>
Page
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of
Institutional Trustee.................................... 58
SECTION 13.2 Representations and Warranties of
Delaware Trustee......................................... 59
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.................................................. 60
SECTION 14.2 Governing Law............................................ 61
SECTION 14.3 Intention of the Parties................................. 62
SECTION 14.4 Headings................................................. 62
SECTION 14.5 Successors and Assigns................................... 62
SECTION 14.6 Partial Enforceability................................... 62
SECTION 14.7 Counterparts............................................. 62
ANNEX I TERMS OF SECURITIES...................................... I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE...................... A2-1
EXHIBIT B SPECIMEN OF DEBENTURE.................................... B-1
EXHIBIT C UNDERWRITING AGREEMENT................................... C-1
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CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a)..................................................... 5.3(a)
310(c)..................................................... Inapplicable
311(c)..................................................... Inapplicable
312(a)..................................................... 2.2(a)
312(b)..................................................... 2.2(b)
313........................................................ 2.3
314(a)..................................................... 2.4
314(b)..................................................... Inapplicable
314(c)..................................................... 2.5
314(d)..................................................... Inapplicable
314(f)..................................................... Inapplicable
315(a)..................................................... 3.9(b)
315(c)..................................................... 3.9(a)
315(d)..................................................... 3.9(a)
316(a)..................................................... Annex I
316(c)..................................................... 3.6(e)
- ---------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CITICORP CAPITAL XIII
___________, 199__
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of ___________, 199__, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Citicorp Capital XIII
(the "Trust"), a trust under the Delaware Business Trust Act pursuant to a
Declaration of Trust dated as of [________________] (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on [________________], for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
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ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Additional Interest" has the meaning set forth in the Indenture.
"Adjusted Treasury Rate" has the same meaning set forth in Section 4(d) of
Annex I.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
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"Authorized Officer" of a Person means any Person that is authorized to
legally bind such Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than Saturday, Sunday or any other day
on which banking institutions in New York City, are permitted or required by any
applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code ss. 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
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.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the "Closing Date" under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.1(a).
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"Common Securities Guarantee" means the guarantee agreement to be dated as
of ___________, 199__ of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Comparable Treasury Issue" has the meaning set forth in Section 4(d) of
Annex I.
"Comparable Treasury Price" has the meaning set forth in Section 4(d) of
Annex I.
"Corporate Trust Office" means the office of the Institutional Trustee at
which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at Rodney Square North, 9th Floor, 1100
North Market Street, Wilmington, Delaware 19890-0001.
"Coupon Rate" has the meaning set forth in Section 2(a) of Annex I.
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Citicorp, a Delaware corporation, or any
successor entity resulting from any consolidation, amalgamation, merger or other
business combination, in its capacity as issuer of the Debentures under the
Indenture.
"Debenture Trustee" means Wilmington Trust Company, a national banking
association duly organized and existing under
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the laws of the United States, as trustee under the Indenture until a successor
is appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the Debenture
Issuer under the Indenture to be held by the Institutional Trustee, a specimen
certificate for such series of Debentures being Exhibit B.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Dissolution Tax Opinion" has the meaning set forth in Annex I hereto.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of Default
(as defined in the Indenture) that has occurred and is continuing in respect of
the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
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"Indenture" means the Indenture dated as of December 17, 1996, among the
Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"Institutional Trustee" has the meaning set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"No Recognition Opinion" has the meaning set forth in Annex I hereto.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman, a Vice Chairman, a Vice President, the Chief Auditor,
the Treasurer, the Secretary or an Assistant Secretary of such Person. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Declaration shall include:
6
<PAGE>
(a) a statement that each officer signing the Certificate has read
the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 7.2.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning specified in Section 7.1(a).
"Preferred Securities Guarantee" means the guarantee agreement to be dated
as of ___________, 199__, of the Sponsor in respect of the Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
7
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"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement between the Trust, the
Debenture Issuer and the underwriters designated by the Regular Trustees with
respect to the offer and sale of the Preferred Securities.
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both of them.
"Quotation Agent" has the meaning set forth in Section 4(d) of Annex I.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Regulatory Capital Event" has the meaning set forth in Annex I hereto.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Institutional Trustee,
any officer within the Corporate Trust Office of the Institutional Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
successor rule or regulation.
"Securities" means the Common Securities and the Preferred Securities.
8
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"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Sponsor" means Citicorp, a Delaware corporation, or any successor entity
resulting from any merger, consolidation, amalgamation or other business
combination, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section 5.7.
"Successor Institutional Trustee" has the meaning set forth in Section
5.7.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding 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 accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person
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<PAGE>
shall continue in office in accordance with the terms hereof, and all other
Persons who may from time to time be duly appointed, qualified and serving as
Trustees in accordance with the provisions hereof, and references herein to a
Trustee or the Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Property" means (i) the Debentures, (ii) any cash on deposit in, or
owing to, the Institutional Trustee Account and (iii) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held by the Institutional Trustee for the Trust pursuant to this Declaration.
"Underwriting Agreement" means the Underwriting Agreement for the offering
and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by ss.ss. 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as
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equity securities representing undivided beneficial interests in the assets of
the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Institutional
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Institutional Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Institutional Trustee. The Institutional Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in Lists
of Holders given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity) provided that the Institutional Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations under
ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after May 15 of each year, the Institutional Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by ss. 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by ss. 313 of the Trust Indenture Act. The Institutional Trustee shall
also comply with the requirements of ss. 313(d) of the Trust Indenture Act.
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SECTION 2.4 Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such documents, reports and information as
required by ss. 314 (if any) and the compliance certificate required by ss. 314
of the Trust Indenture Act in the form, in the manner and at the times required
by ss. 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the proportion
in liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.
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The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section 2.6(b), the Event
of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have
waived such Event of Default under the Declaration as provided below in
this Section 2.6(b), the Event of Default under the Declaration may only
be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of
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Default with respect to the Common Securities and its consequences until all
Events of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated, and until such Events of Default have been so
cured, waived or otherwise eliminated, the Institutional Trustee will be deemed
to be acting solely on behalf of the Holders of the Preferred Securities and
only the Holders of the Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
such waiver, any such default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee, at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(d) The Institutional Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities actually known to a Responsible Officer of the Institutional Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Event of Default as defined in the Indenture, not including any periods of grace
provided for
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therein and irrespective of the giving of any notice provided therein); provided
that, except for a default in the payment of principal of (or premium, if any)
or interest on any of the Debentures or in the payment of any sinking fund
installment established for the Debentures, the Institutional Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Institutional Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Securities.
(e) The Institutional Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.01(a) and 5.01(b) of the Indenture;
or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Citicorp Capital XIII" as such name may be modified
from time to time by the Regular Trustees following written notice to the
Holders of Securities. The Trust's activities may be conducted under the name of
the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o
Citicorp, 399 Park Avenue, New York, New York 10043 Attn: Treasurer. On ten
Business Days written notice to the Holders of Securities, the Regular Trustees
may designate another principal office.
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SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary, or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and the
Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
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(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one
series of 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 Securities shall be
limited to a simultaneous issuance of both Preferred Securities and Common
Securities on each Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the Preferred Securities
in any State in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc. or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing upon notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by
the Sponsor, relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement and
Pricing Agreement providing for the sale of the Preferred
Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Securities; provided, however, that the Regular Trustees shall cause legal
title to the Debentures
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to be held of record in the name of the Institutional Trustee for the
benefit of the Holders of the Preferred Securities and the Holders of
Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Tax Event or Regulatory Capital Event;
provided that the Regular Trustees shall consult with the Sponsor and the
Institutional Trustee before taking or refraining from taking any
ministerial action in relation to a Tax Event or Regulatory Capital Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of ss. 316(c) of the Trust Indenture
Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
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(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities or to appoint a Paying Agent for the
Securities as provided in Section 7.2;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
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(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders in any material respect; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall not take any action that
is inconsistent with the purposes and functions of the Trust set forth in
Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Institutional Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.6
shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) on behalf of the Trust shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust not
to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
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(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under the Indenture, (C) exercise
any right to rescind or annul any declaration that the principal of all
the Debentures shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required unless the Trust shall have received an opinion
of a nationally recognized independent counsel experienced in such matters
to the effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes the
Trust will not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of record
in the name of the Institutional Trustee in trust for the benefit of the Holders
of the Securities. The right, title and interest of the Institutional Trustee to
the Debentures shall vest automatically in each Person who may hereafter be
appointed as Institutional Trustee in accordance with Section 5.7. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
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(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee, except as provided in
Section 7.2 hereof, on behalf of the Holders of the Securities and, upon
the receipt of payments of funds made in respect of the Debentures held by
the Institutional Trustee, deposit such funds into the Institutional
Trustee Account and make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the Institutional
Trustee Account in accordance with Section 6.1. Funds in the Institutional
Trustee Account shall be held uninvested until disbursed in accordance
with this Declaration. The Institutional Trustee Account shall be an
account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the rating assigned
to the Preferred Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the
occurrence of a Tax Event or a Regulatory Capital Event.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
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(e) The Institutional Trustee shall take any Legal Action which arises out
of or in connection with (i) an Event of Default of which a Responsible Officer
of the Institutional Trustee has actual knowledge or (ii) the Institutional
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act, and if such Institutional Trustee shall have failed to take such Legal
Action, the Holders of the Preferred Securities may take such Legal Action, to
the same extent as if such Holders of Preferred Securities held a principal
amount of Debentures equal to the liquidation amount of such Preferred
Securities, without first proceeding against the Institutional Trustee or the
Trust; provided however, that if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a Holder of Preferred Securities may directly institute a proceeding
for enforcement of payment to such Holder of the principal of or interest then
due on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder (a "Direct
Action") on or after the respective due date specified in the Debentures. In
connection with such Direct Action, the rights of the Holders of the Common
Securities will be subrogated to the rights of such Holder of Preferred
Securities to the extent of any payment made by the Issuer to such Holder of
Preferred Securities in such Direct Action. Except as provided in the preceding
sentences, the Holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures.
(f) The Institutional Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.7.
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(g) The Institutional Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) The Institutional Trustee shall be authorized to undertake any actions
set forth in ss. 317(a) of the Trust Indenture Act.
(i) Subject to this Section 3.8, the Institutional Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and in the Securities and no implied covenants shall be read
into this Declaration against the Institutional Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section 2.6)
of which a Responsible Officer of the Institutional Trustee has actual
knowledge, the Institutional Trustee shall exercise such of the rights and
powers vested in it by this Declaration, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for
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its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and in the Securities and the Institutional Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration and in
the Securities, and no implied covenants or obligations shall be
read into this Declaration against the Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; provided, however, that in the
case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Institutional Trustee, the Institutional Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Outstanding Preferred Securities relating to the
time, method and place of conducting any proceeding for any remedy
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available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Institutional Trustee under this Declaration and
the Trust Indenture Act and, to the extent applicable, Rule 3a-7 under the
Investment Company Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing
with the Sponsor. Money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the
Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise required
by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be
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liable for any default or misconduct of the Regular Trustees or the
Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with
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such advice or opinion, such counsel may be counsel to the Sponsor or any
of its Affiliates, and may include any of its employees. The Institutional
Trustee shall have the right at any time to seek instructions concerning
the administration of this Declaration from any court of competent
jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of
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the Securities, and the signature of the Institutional Trustee or its
agents alone shall be sufficient and effective to perform any such action
and no third party shall be required to inquire as to the authority of the
Institutional Trustee to so act or as to its compliance with any of the
terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Institutional Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration;
(xii) the Institutional Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration; and
(xiii) if (A) in performing its duties under this Declaration the
Institutional Trustee is required to decide between alternative courses of
action or (B) in construing any of the provisions in this Declaration, the
Institutional Trustee finds the same ambiguous or same inconsistent with
any other provisions contained herein or (C) the Institutional Trustee is
unsure of the application of any provision of this Declaration, then,
except as to any matter
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as to which the Preferred Securities Holders are entitled to vote under
the terms of this Declaration, the Institutional Trustee shall deliver a
notice to the Sponsor requesting written instructions of the Sponsor as to
the course of action to be taken. The Institutional Trustee shall take
such action, or refrain from taking such action, as the Institutional
Trustee shall be instructed in writing to take, or to refrain from taking,
by the Sponsor and shall be fully and conclusively protected in taking or
refraining from taking such action as so instructed; provided, however,
that the Institutional Trustee shall be under no duty to take any action
unless and until so instructed by the Sponsor; and provided, further, that
if the Institutional Trustee does not receive such instructions of the
Sponsor within ten Business Days after it has delivered such notice, or
such reasonably shorter period of time set forth in such notice (which to
the extent practicable shall not be fewer than two Business days), it may,
but shall be under no duty to, take or refrain from taking any such action
not inconsistent with this Declaration as it shall deem advisable and in
the best interest of the Securities Holders, in which event the
Institutional Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct.
(b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Institutional Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than Section
5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Regular Trustees or the Institutional Trustee described in this
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Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of
ss.3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is authorized
to execute on behalf of the Trust any documents that the Regular Trustees have
the power and authority to execute pursuant to Section 3.6; provided that, the
registration statement referred to in Section 3.6(b)(i), including any
amendments thereto, shall be signed by a majority of or, if there are less than
three, all of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall dissolve on February 15, 2052.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees and without the consent of
the Holders of the Securities, the Delaware Trustee or the Institutional
Trustee,
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consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State; provided that:
(i) if the Trust is not the surviving entity, such successor entity
(the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same as
the Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed or quoted, or any Successor Securities will be so upon notice of
issuance, on any national securities exchange or other organization on
which the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of counsel to the Trust
to the effect that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Preferred Securities Guarantee and the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger or replacement would cause the Trust or
the Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
SECTION 3.16 Limitation to Trust Property.
All payments made by the Institutional Trustee or a Paying Agent in
respect of the Securities shall be made only from the income and proceeds from
the Trust Property and only to the
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extent that there shall be sufficient income or proceeds from the Trust Property
to enable the Institutional Trustee or Paying Agent to make payments in
accordance with the terms hereof. Each Holder, by its acceptance of a Security,
agrees that it will look solely to the income and proceeds from the Trust
Property to the extent available for distribution to it as herein provided and
that the Trustees shall not be personally liable to it for any amount
distributable in respect of any Security or for any other liability in respect
of any Security; provided that this Section 3.16 does not limit the liability of
the Trustees expressly set forth elsewhere in this Declaration or, in the case
of the Institutional Trustee, in the Trust Indenture Act.
SECTION 3.17 Compensation and Fees.
(a) The Sponsor agrees:
(i) to pay the Institutional Trustee from time to time compensation
for all services rendered by the Institutional Trustee hereunder in
accordance with a separate fee agreement between the Sponsor and the
Institutional Trustee (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); and
(ii) except as otherwise expressly provided herein, to reimburse the
Institutional Trustee upon request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the
Institutional Trustee in accordance with any provision of this Declaration
(including the reasonable compensation and the expenses and disbursements
of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence, bad faith or willful
misconduct.
(b) The provisions of this Section shall survive the termination of this
Declaration.
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ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust at the same time as the Preferred Securities are
sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and
to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
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(e) to negotiate the terms of the Underwriting Agreement and Pricing
Agreement providing for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be three (3), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities; provided, however, that, the
number of Trustees shall in no event be less than two (2); provided
further that (1) one Trustee shall be the Delaware Trustee; (2) there
shall be at least one Trustee who is an employee or officer of, or is
affiliated with the Sponsor (a "Regular Trustee"); and (3) one Trustee
shall be the Institutional Trustee for so long as this Declaration is
required to qualify as an indenture under the Trust Indenture Act, and
such Trustee may also serve as Delaware Trustee if it meets the applicable
requirements.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
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provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a financial institution organized and doing business under
the laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 5.3(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Institutional Trustee shall cease to be eligible to
so act under Section 5.3(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 5.7(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of ss. 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in all
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respects comply with the provisions of ss. 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be:
Wilmington Trust Company
SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 Regular Trustees.
The initial Regular Trustees shall be:
Peter Gallant
John F. Rice
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by a majority
of or, if there are less than three, all of the Regular Trustees; and
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(c) a Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purposes of signing any documents which the Regular Trustees have power
and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Wilmington Trust Company
SECTION 5.7 Appointment, Removal and Resignation of
Trustees.
(a) Subject to Section 5.7(b), Trustees may be appointed or removed
without cause at any time except during an Event of Default:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities.
(b)(i) The Trustee that acts as Institutional Trustee shall not be removed
in accordance with Section 5.7(a) until a successor Trustee possessing the
qualifications to act as Institutional Trustee under Section 5.3 (a "Successor
Institutional Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Institutional Trustee and
delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with this Section 5.7(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections
5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such Successor
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Delaware Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the Sponsor
and the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Delaware Trustee or Successor Institutional Trustee
as the case may be if the Institutional Trustee or the Delaware Trustee delivers
an instrument of resignation in accordance with this Section 5.7.
(e) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.7 within 60 days after delivery of an instrument of resignation or removal,
the Institutional Trustee or Delaware Trustee resigning or being
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removed, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.7, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.10 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
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Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
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SECTION 5.12 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
SECTION 5.13 Co-Trustees and Separate Trustee.
(a) Unless an Event of Default shall have occurred and be continuing, at
any time or times for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property may
at the time be located, the Sponsor and the Institutional Trustee shall have
power to appoint, and upon the written request of the Institutional Trustee, the
Sponsor shall for such purpose join with the Institutional Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Institutional Trustee
either to act as co-trustee, jointly with the Institutional Trustee, of all or
any part of such Trust Property, or to act as separate trustee of any such
property, in either case with such powers as may be provided in the instrument
of appointment, and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section 5.13. If the Sponsor does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case of an Event of Default has occurred and is continuing, the Institutional
Trustee alone shall have power to make such appointment.
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(b) Should any written instrument from the Sponsor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Sponsor.
(c) Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(i) The Securities shall be executed and delivered and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees designated for such purpose
hereunder, shall be exercised, solely by such Trustees.
(ii) The rights, powers, duties and obligations hereby conferred or
imposed upon the Institutional Trustee in respect of any property covered
by such appointment shall be conferred or imposed upon and exercised or
performed by the Institutional Trustee or by the Institutional Trustee and
such co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any particular act
is to be performed, the Institutional Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such co-trustee
or separate trustee.
(iii) The Institutional Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Sponsor, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section 5.13, and, in case an Event of Default has
occurred and is continuing, the Institutional Trustee shall have power to
accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Sponsor. Upon the written request
of the Institutional Trustee, the Sponsor shall join with the
Institutional Trustee in the execution, delivery and performance of all
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instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner provided in this
Section 5.13.
(iv) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Institutional Trustee.
(v) The Institutional Trustee shall not be liable by reason of any
act or omission of a co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the Institutional Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in accordance with
the applicable terms of the relevant Holder's Securities. Distributions shall be
made on the Preferred Securities and the Common Securities in accordance with
the preferences set forth in their respective terms. If and to the extent that
the Debenture Issuer makes a payment of interest (including Compounded Interest
(as defined in the Indenture) and Additional Interest), premium and/or principal
on the Debentures held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class of
preferred securities representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in Annex I (the "Preferred
Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Common Securities.") The Trust shall issue no securities
or other interests in the assets of the Trust other than the Preferred
Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a Regular
Trustee. Such signature shall be the manual or facsimile signature of any
present or any future Regular Trustee. In case any Regular Trustee of the Trust
who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) A Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Institutional Trustee. The signature
shall be conclusive
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evidence that the Security has been authenticated under this Declaration.
The Institutional Trustee may appoint an authenticating agent acceptable
to the Trust to authenticate Securities. An authenticating agent may
authenticate Securities whenever the Institutional Trustee may do so. Each
reference in this Declaration to authentication by the Institutional Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Institutional Trustee to deal with the Sponsor or an Affiliate.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration and
the receipt of the consideration therefor, the Securities so issued shall be
deemed to be validly issued, fully paid and non-assessable.
(f) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
SECTION 7.2 Paying Agent.
The Trust shall appoint an agent (the "Paying Agent"), which shall
initially be Citibank, N.A., which shall make Distributions to the Securities
Holders from the Institutional Trustee Account and shall report the amounts of
such Distributions to the Regular Trustees and the Institutional Trustee. Any
Paying Agent shall have the revocable power to withdraw funds from the
Institutional Trustee Account for the purpose of making the Distributions. The
Institutional Trustee shall be entitled to rely upon a certificate of the Paying
Agent stating the amount of such funds so to be withdrawn and that the same are
to be applied by the Paying Agent in accordance with this Section 7.2. The
Regular Trustees may revoke such power and remove the Paying Agent in their sole
discretion. The Paying
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Agent may choose any co-paying agent that is acceptable to the Regular Trustees.
The Paying Agent shall be permitted to resign upon 30 days' notice to the
Regular Trustees. In the event of the removal or resignation of the Paying
Agent, the Regular Trustees shall appoint a successor that is reasonably
acceptable to the Institutional Trustee to act as Paying Agent (which shall be a
bank, trust company or an Affiliate of the Sponsor). The Regular Trustee shall
cause such successor Paying Agent or any additional Paying Agent appointed to
execute and deliver to the Trustees an instrument in which such Paying Agent or
additional Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Securities Holders in trust for the benefit of the
Securities Holders entitled thereto until such sums shall be paid to such
Securities Holders. The Paying Agent shall return all unclaimed funds to the
Institutional Trustee and upon resignation or removal of a Paying Agent such
Paying Agent also shall return all funds in its possession to the Institutional
Trustee. The provisions of Sections 3.8(d), 3.9, 3.10 and 3.17 shall apply to
the Paying Agent appointed hereunder, and the Paying Agent shall be bound by the
requirements with respect to paying agents of securities issued pursuant to the
Trust Indenture Act. Any reference in this Declaration to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust.
(a) The Trust shall dissolve:
(i) on February 15, 2052, the expiration term of the Trust;
(ii) upon the bankruptcy of the Sponsor;
(iii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; the consent of at least a majority
in liquidation amount of the Securities affected thereby voting together
as a single
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class to file a certificate of cancellation with respect to the Trust or
the revocation of the Sponsor's charter and the expiration of 90 days
after the date of revocation without a reinstatement thereof;
(iv) upon the election by the Regular Trustees to dissolve the
Trust, following the occurrence of a Tax Event or a Regulatory Capital
Event in accordance with the terms of the Securities and the distribution
of all of the Debentures endorsed thereon to the Holders of Securities in
exchange for all of the Securities;
(v) upon the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor or the Trust;
(vi) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Securities;
or
(vii) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a), and upon the completion of the winding up of the Trust, one
of the Trustees (each of whom is hereby authorized to take such action) shall
file a certificate of cancellation with the Secretary of State of the State of
Delaware terminating the Trust.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. Any
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transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) The Sponsor may not transfer the Common Securities.
SECTION 9.2 Transfer of Certificates.
(a) The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Trust or the Sponsor
may reasonably require) in respect of any tax or other government charges that
may be imposed in relation to it. Upon surrender for registration of transfer of
any Certificate, the Regular Trustees shall cause one or more new Certificates
to be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
(b) Upon receipt by the Institutional Trustee of a Definitive Preferred
Security Certificate, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Institutional Trustee, requesting transfer
of such Definitive Preferred Security Certificate for a beneficial interest in a
Global Certificate, the Institutional Trustee shall cancel such Definitive
Preferred Security Certificate and cause, or direct the Clearing Agency to
cause, the aggregate number of Preferred Securities represented by the
appropriate Global Certificate to be increased accordingly. If no Global
Certificates are then outstanding, the Trust shall issue and the Institutional
Trustee shall authenticate, upon written order of
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any Regular Trustee, an appropriate number of Preferred Securities in global
form.
(c) Upon receipt by the Institutional Trustee from the Clearing Agency or
its nominee on behalf of any Person having a beneficial interest in a Global
Certificate of written instructions or such other form of instructions as is
customary for the Clearing Agency or the person designated by the Clearing
Agency, requesting transfer of a beneficial interest in a Global Certificate for
a Definitive Preferred Security Certificate, then the Institutional Trustee or
the securities custodian, at the direction of the Institutional Trustee, will
cause, in accordance with the standing instructions and procedures existing
between the Clearing Agency and the securities custodian, the aggregate
principal amount of the Global Certificate to be reduced on its books and
records and, following such reduction, the Trust will execute and the
Institutional Trustee will authenticate and deliver to the transferee a
Definitive Preferred Security Certificate.
Definitive Preferred Security Certificates issued in exchange for a
beneficial interest in a Global Certificate shall be registered in such names
and in such authorized denominations as the Clearing Agency, pursuant to
instructions from its Clearing Agency Participants or indirect participants or
otherwise, shall instruct the Institutional Trustee. The Institutional Trustee
shall deliver such Preferred Securities to the persons in whose names such
Preferred Securities are so registered in accordance with the instructions of
the Clearing Agency.
(d) Notwithstanding any other provisions of this Declaration, a Global
Certificate may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or another nominee of the Clearing Agency or by
the Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the
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Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities, the
Preferred Securities Certificates, on original issuance, will be issued in the
form of one or more, fully registered, global Preferred Security Certificates
(each a "Global Certificate"), to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Global Certificates shall initially
be registered on the books and records of the Trust in the name of Cede & Co.,
the nominee of DTC, and no Preferred Security Beneficial Owner will receive a
definitive Preferred Security Certificate representing such Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 9.7. Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
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(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants.
Clearing Agency Participants shall have no rights under this Declaration
with respect to any Global Certificate held on their behalf by the Clearing
Agency or by the Institutional Trustee as the custodian of the Clearing Agency
or under such Global Certificate, and the Clearing Agency may be treated by the
Trust, the Institutional Trustee and any agent of the Trust or the Institutional
Trustee as the absolute owner of such Global Certificate for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Trust, the Institutional Trustee or any agent of the Trust or the Institutional
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Clearing Agency or impair, as between the
Clearing Agency and its Clearing Agency Participants, the operation of customary
practices of such Clearing Agency governing the exercise of the rights of a
holder of a beneficial interest in any Global Certificate.
At such time as all beneficial interests in a Global Certificate have
either been exchanged for Definitive Preferred Security Certificates to the
extent permitted by this Declaration or redeemed, repurchased or canceled in
accordance with the terms of this Declaration, such Global Certificate shall be
returned to the Clearing Agency for cancellation or retained and canceled by the
Institutional Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Certificate is exchanged for Definitive Preferred Security
Certificates, or if Definitive Preferred Security Certificates are exchanged for
a beneficial interest in a Global Certificate, Preferred Securities represented
by such Global Certificate shall be reduced or increased and an adjustment shall
be made on the books and records of the Institutional Trustee (if it is then the
securities custodian for such Global Certificate) with respect to
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such Global Certificate, by the Institutional Trustee or the securities
custodian, to reflect such reduction or increase.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security Holders
is required under this Declaration, unless and until Definitive Preferred
Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
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(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Preferred Security Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the instructions
of the Clearing Agency. Neither the Trustees nor the Trust shall be liable
for any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on, said
instructions of the Clearing Agency. The Definitive Preferred Security
Certificates shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the Regular Trustees,
as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends
or endorsements as the Regular Trustees may deem appropriate, or as may be
required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which Preferred Securities may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless,
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that
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may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of an ownership
interest in the relevant Securities, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
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ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Debenture Issuer shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders of the
Securities shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or
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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 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees and expenses), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo
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contendere or its equivalent, shall not, of itself, create a presumption
that the Company Indemnified Person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in
its favor by reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees and expenses) actually
and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the Trust
unless and only to the extent that the Court of Chancery of Delaware or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court)
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shall be made by the Debenture Issuer only as authorized in the specific
case upon a determination that indemnification of the Company Indemnified
Person is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority vote
of a quorum consisting of such Regular Trustees who were not parties to
such action, suit or proceeding, (2) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion, or (3) by the
Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by the Debenture Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) by the
Debenture Issuer that, based upon the facts known to the Regular Trustees,
counsel or the Debenture Issuer at the time such determination is made,
such Company Indemnified Person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to the best interests
of the Trust, or, with respect to any criminal proceeding, that such
Company Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in instances
where the Regular Trustees, independent legal counsel or Debenture Issuer
reasonably determine that such person deliberately breached his duty to
the Trust or its Common or Preferred Security Holders.
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(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the
Debenture Issuer or Preferred Security Holders of the Trust or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office. All rights to indemnification under
this Section 10.4(a) shall be deemed to be provided by a contract between
the Debenture Issuer and each Company Indemnified Person who serves in
such capacity at any time while this Section 10.4(a) is in effect. Any
repeal or modification of this Section 10.4(a) shall not affect any rights
or obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not
the Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or is
or was serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in the
same position under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or
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ratified, continue as to a person who has ceased to be a Company
Indemnified Person and shall inure to the benefit of the heirs, executors
and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense including taxes (other
than taxes based on the income of such Fiduciary Indemnified Person) incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration or the trust or trusts hereunder,
including the costs and expenses (including reasonable legal fees and expenses)
of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to
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recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Institutional Trustee may engage or
be interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year,
or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail, each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes.
(b) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(c) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority, an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law,
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and any other annual income tax returns required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
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ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may only be amended by a written
instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is
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permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without the
consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders of
a Majority in liquidation amount of the Common Securities and;
(f) the rights of the Holders of the Common Securities under Article V to
increase or decrease the number of, and appoint and remove Trustees shall not be
amended without the consent of the Holders of a Majority in liquidation amount
of the Common Securities; and
(g) Sections 12.1(a)(ii) and 12.1(b) shall not be amended without the
consent of the Institutional Trustee and Section 12.1(a)(iii) shall not be
amended without the consent of the Delaware Trustee; and
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(h) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor, provided such amendment does not have a material adverse effect
on the rights, preferences or privileges of the Holders;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) to modify, eliminate or add to any provision of the Declaration
to such extent as may be necessary to eliminate or reduce the adverse
effects resulting from the occurrence of a Tax Event or Regulatory Capital
Event, provided such amendment does not have a material adverse effect on
the rights, preferences or privileges of the Holders.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the 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
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shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Security Certificates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be counted for purposes
of determining whether the required percentage set forth in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least seven days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at
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a meeting. No proxy shall be valid after the expiration of 11 months from
the date thereof unless otherwise provided in the proxy. Every proxy shall
be revocable at the pleasure of the Holder of Securities executing it.
Except as otherwise provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the General Corporation
Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional
Trustee.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at
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the time of the Successor Institutional Trustee's acceptance of its appointment
as Institutional Trustee that:
(a) the Institutional Trustee is a Delaware banking corporation with
trust powers and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Institutional Trustee. The Declaration
has been duly executed and delivered by the Institutional Trustee, and it
constitutes a legal, valid and binding obligation of the Institutional
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in
equity or at law);
(c) the execution, delivery and performance of this Declaration by
the Institutional Trustee does not conflict with or constitute a breach of
the charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with
or notice to, any Delaware State or federal banking authority is required
for the execution, delivery or performance by the Institutional Trustee,
of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware
Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
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(a) The Delaware Trustee is duly organized, validly existing and in
good standing under the laws of the State of Delaware, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with
or notice to, any federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee, of this Declaration.
(d) The Delaware Trustee is a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
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Citicorp Capital XIII
c/o Citicorp
399 Park Avenue
New York, New York 10043
Attention: Treasurer
Telecopy: (212) 527-2765
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of
to the Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Department
Telecopy: (302) 651-1576
(c) if given to the Institutional Trustee, at the Institutional
Trustee's mailing address set forth below (or such other address as the
Institutional Trustee may give notice of to the Holders of the
Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Trustee
Administration
Telecopy: (302) 651-1576
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(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
Citicorp
399 Park Avenue
New York, New York 10043
Attention: Treasurer
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be governed
by and interpreted in accordance with the laws of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to the
principles of conflict of laws of the State of Delaware or any other
jurisdiction that would call for the application of the law of any jurisdiction
other than the State of Delaware; provided, however, that there shall not be
applicable to the Trust, the Trustees or this Declaration any provision of the
laws (statutory or common) of the State of Delaware pertaining to trusts that
relate to or regulate, in a manner inconsistent with the terms hereof (a) the
filing with any court or governmental body or agency of trustee accounts or
schedules of trustee fees and charges, (b) affirmative requirements to post
bonds for trustees, officers, agents or employees of a trust, (c) the necessity
for obtaining court or other governmental approval concerning the acquisition,
holding or disposition of real or personal property, (d) fees or other sums
payable to trustees, officers, agents or employees of a trust, (e) the
allocation of receipts and expenditures to income or principal, (f) restrictions
or
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limitations on the permissible nature, amount or concentration of trust
investments or requirements relating to the titling, storage or other manner of
holding or investing trust assets or (g) the establishment of fiduciary or other
standards of responsibility or limitations on the acts or powers of trustees
that are inconsistent with the limitations or liabilities or authorities and
powers of the Trustees as set forth or referenced in this Declaration. Section
3540 of Title 12 of the Delaware Code shall not apply to the Trust.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
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SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
__________________________________
Peter Gallant, as Regular Trustee
__________________________________
John F. Rice, as Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:_________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By:_________________________
Name:
Title:
CITICORP,
as Sponsor
By:_________________________
Name: John F. Rice
Title: Vice President
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ANNEX I
TERMS OF
[____]% CAPITAL SECURITIES
[____]% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of ___________, 199__ (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities ("Preferred Securities"
or "Capital Securities") and the Common Securities are set out below (each
capitalized term used but not defined herein has the meaning set forth in the
Declaration or, if not defined in such Declaration, as defined in the Prospectus
referred to below):
1. Designation and Number.
(a) Preferred Securities. ,000 Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of ,000,000
dollars ($ ,000,000) and a liquidation amount with respect to the assets of the
Trust of $1,000 per preferred security, are hereby designated for the purposes
of identification only as " % Capital Securities" (the "Preferred Securities").
The Preferred Security Certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange on
which the Preferred Securities are listed.
(b) Common Securities. Common Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of ,000 dollars ($
,000) and a liquidation amount with respect to the assets of the Trust of $1,000
per common security, are hereby designated for the purposes of identification
only as " % Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and
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additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate per
annum of % (the "Coupon Rate") of the stated liquidation amount of $1,000 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears for more than one
semiannual Distribution period will bear additional distributions thereon
compounded semiannually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full semiannual
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full semiannual Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 180-day semiannual Distribution period.
(b) Distributions on the Securities will be cumulative, will accrue from
___________, 199__, and will be payable semiannually in arrears, on February 15
and August 15 of each year, commencing on ,199 , except as otherwise described
below. The Debenture Issuer has the right under the Indenture to defer payments
of interest by extending the interest payment period from time to time on the
Debentures for a period not exceeding 10 consecutive semiannual Distribution
periods, including the first such semiannual Distribution period during such
period (each an "Extension Period"), during which Extension Period no interest
shall be due and payable on the Debentures, provided that no Extension Period
shall extend beyond the maturity date of the Debentures. As a consequence of
such deferral, Distributions will also be deferred. Despite such deferral,
semiannual Distributions will continue to accrue with additional distributions
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded semiannually during
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any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further extensions within such Extension Period, may
not exceed 10 consecutive semiannual Distribution periods, including the first
semiannual Distribution period during such Extension Period, or extend beyond
the maturity date of the Debentures. Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust on the relevant record
dates. While the Preferred Securities remain in book-entry only form, the
relevant record dates shall be one Business Day prior to the relevant payment
dates which payment dates correspond to the interest payment dates on the
Debentures. Subject to any applicable laws and regulations and the provisions of
the Declaration, each such payment in respect of the Preferred Securities will
be made as described under the heading "Description of the Preferred Securities
- -- Book-Entry Only Issuance -- The Depository Trust Company" in the Prospectus
Supplement dated __________, 199_, to the Prospectus dated December 17, 1996
(together, the "Prospectus"), of the Trust included in the Registration
Statement on Form S-3 of the Sponsor, the Trust and certain other business
trusts. The relevant record dates for the Common Securities shall be the same
record date as for the Preferred Securities. If the Preferred Securities shall
not continue to remain in book-entry only form, the relevant record dates for
the Preferred Securities shall conform to the rules of any securities exchange
on which the securities are listed and, if none, shall be selected by the
Regular Trustees, which dates shall be at least one Business Day but not more
than ten Business Days before the relevant payment dates, which payment dates
correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, will cease
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to be payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable to
the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the Securities is not a Business Day,
then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay).
(d) If at any time while the Institutional Trustee is the Holder of any
Debentures, the Debenture Issuer is required to pay any Additional Interest to
the Trust or the Institutional Trustee under the Debentures, the Payment Amount
with respect to Distributions on the Securities pursuant to Section 6.1 of the
Declaration shall include any such Additional Interest.
(e) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up or
liquidation of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, an amount equal to the aggregate of the stated liquidation amount of
$1,000 per Security plus accrued and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"), unless, in
connection with such dissolution, winding-up or termination, Debentures in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities
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in exchange for such Securities, after paying or making reasonable provision to
pay all claims and obligations of the Trust in accordance with Section 3808(e)
of the Business Trust Act.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part, whether at
maturity or upon redemption (either at the option of the Debenture Issuer at any
time on or after February 15, 200 or pursuant to a Tax Event or Regulatory
Capital Event at any time prior to February 15, 200 ), the proceeds from such
repayment or redemption shall be simultaneously applied to redeem, at the
Securities Redemption Price, Securities having an aggregate liquidation amount
equal to the aggregate principal amount of the Debentures so repaid or redeemed;
provided that holders will be given not less than 30 nor more than 60 days
notice of such redemption of Securities.
(b) The "Securities Redemption Price" for each $1,000 in stated
liquidation amount of Securities shall be:
(i) in the case of redemption of the Securities upon the maturity of
the Debentures, the liquidation amount of $1,000 per Security, plus
accrued and unpaid Distributions thereon to but excluding the date of
redemption; and
(ii) in the case of redemption of the Securities upon any redemption
of the Debentures by the Debenture Issuer (either at the option of the
Debenture Issuer at any time on or after February 15, 200 or pursuant to a
Tax Event or Regulatory Capital Event at any time prior to February 15,
200 ), equal to the applicable Redemption Price (as defined in the
Indenture) payable with respect to each $1,000 principal amount of
Debentures so redeemed in accordance with the terms of the Debentures.
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If, at any time, a Regulatory Capital Event shall occur and be continuing,
the Sponsor may (i) cause the Trust to be dissolved, with the result that after
satisfaction of liabilities to creditors, if any, Debentures with an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, the Securities, would be
distributed to the Holders of the Securities in liquidation of such holders'
interests in the Trust on a pro rata basis within 90 days following the
occurrence of such Regulatory Capital Event or (ii) within 90 days following the
occurrence of such Regulatory Capital Event, redeem the Debentures, in whole or
in part, upon not less than 30 nor more than 60 days' notice, for cash, with the
result that, following such redemption, the Securities will be redeemed by the
Trust at the Securities Redemption Price; provided, however, that if at the time
there is available to the Sponsor of the Trust the opportunity to eliminate
within such 90- day period, the Regulatory Capital Event by taking some
ministerial action, such as filing a form or making an election or pursuing some
other similar reasonable measure that has no adverse effect on the Trust, the
Sponsor or the holders of the Securities, then the Sponsor or the Trust will
pursue such measure in lieu of distribution or redemption of the Debentures.
(c) "Regulatory Capital Event" means a determination by the Sponsor, based
on an opinion of counsel experienced in such matters (who may be an employee of
the Sponsor or any of its affiliates), that, as a result of any amendment to,
clarification of or change (including any announced prospective change) in
applicable laws or regulations or official interpretations thereof or policies
with respect thereto, which amendment, clarification or change is effective
after the date of this Prospectus Supplement, there is more than an
insubstantial risk that the Preferred Securities will no longer constitute Tier
1 capital of the Sponsor (or its equivalent) for purposes of the capital
adequacy guidelines of the Board of Governors of the Federal Reserve System or
its successor as the Sponsor's primary federal banking regulator.
"Tax Event" means the Regular Trustees shall have received an opinion (a
"Dissolution Tax Opinion") of a nationally recognized independent tax counsel
experienced in such matters
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("Tax Counsel") to the effect that, as a result of (a) any amendment to,
clarification of or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after such date), there is more than an
insubstantial risk that (i) the Trust would be subject to United States federal
income tax with respect to income accrued or received on the Debentures, (ii)
interest payable to the Trust on the Debentures would not be deductible by the
Sponsor for United States federal income tax purposes or (iii) the Trust would
be subject to more than a de minimis amount of other taxes, duties or other
governmental charges, provided that any such change, clarification or amendment
becomes effective on or after the date of this Prospectus Supplement.
If, at any time, a Tax Event shall occur and be continuing, the Sponsor
may cause the Trust to be dissolved, with the result that after satisfaction of
liabilities to creditors, if any, Debentures with an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the distribution rate of, and accrued and unpaid interest equal to
accrued and unpaid distributions on, the Securities, would be distributed to the
holders of the Securities in liquidation of such holders' interests in the Trust
on a Pro Rata basis within 90 days following the occurrence of such Tax Event;
provided that such dissolution and distribution shall be conditioned on (i) the
Regular Trustees' receipt of an opinion of Tax Counsel (a "No Recognition
Opinion"), which opinion may rely on published revenue rulings of the Internal
Revenue Service, to the effect that the holders of the Securities will not
recognize any gain or loss for United States federal income tax purposes as a
result of such dissolution and distribution of Debentures and (ii) the Sponsor
being unable to avoid such Tax Event within such 90-day period by taking some
ministerial action or pursuing some other reasonable measure that will have no
adverse effect on the Trust, the Sponsor or the Holders of the Securities.
Furthermore, if after receipt of a Dissolution Tax Opinion by the Regular
Trustees (i) the Sponsor has received an opinion (a
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"Redemption Tax Opinion") of Tax Counsel that, as a result of a Tax Event, there
is more than an insubstantial risk that the Sponsor would be precluded from
deducting the interest on the Debentures for United States federal income tax
purposes, even after the Debentures were distributed to the holders of
Securities in liquidation of such Holders' interests in the Trust as described
above, or (ii) the Regular Trustees shall have been informed by such Tax Counsel
that it cannot deliver a No Recognition Opinion to the Trust, the Sponsor shall
have the right, within 90 days following the occurrence of such Tax Event, to
redeem the Debentures, in whole or in part, upon not less than 30 nor more than
60 days' notice, for cash, with the result that, following such redemption, the
Securities will be redeemed by the Trust at the Securities Redemption Price;
provided, however, that if at the time there is available to the Sponsor or the
Trust the opportunity to eliminate, within such 90-day period, the Tax Event by
taking some ministerial action, such as filing a form or making an election or
pursuing some other similar reasonable measure that has no adverse effect on the
Trust, the Sponsor or the Holders of the Securities, then the Sponsor or the
Trust will pursue such measure in lieu of redemption of the Debentures.
(d) In the case of an optional redemption, if fewer than all the
outstanding Securities are to be so redeemed, the Common Securities and the
Preferred Securities will be redeemed Pro Rata and the Preferred Securities to
be redeemed will be as described in Section 4(g)(ii) below.
(e) On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) The Depository Trust Company (the
"Depository") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Preferred Securities, will receive a registered
global certificate or certificates representing the Debentures to be delivered
upon such distribution and any certificates representing Securities, except for
certificates representing Preferred Securities held by the Depository or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Debentures having an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the Coupon Rate of, and accrued and unpaid interest equal to
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accrued and unpaid Distributions on such Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or reissue.
(f) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or before the date of
redemption.
(g) The procedure with respect to redemptions and distributions of
Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities
to be redeemed or exchanged not fewer than 30 nor more than 60 days before
the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 4(g)(i), a
Redemption/ Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of
record by the Depository or its nominee (or any successor Clearing Agency
or its nominee), the distribution of the proceeds of such redemption will
be made to each Clearing Agency Participant (or Person on whose behalf
such nominee
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holds such securities) in accordance with the procedures applied by such
agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are to be redeemed as set out in this Section 4 (which notice
will be irrevocable), then (A) while the Preferred Securities are in
book-entry only form, with respect to the Preferred Securities, by 12:00
noon, New York City time, on the redemption date, provided that the
Debenture Issuer has paid the Institutional Trustee a sufficient amount of
cash in connection with the related redemption or maturity of the
Debentures, the Institutional Trustee will deposit irrevocably with the
Depository or its nominee (or successor Clearing Agency or its nominee)
funds sufficient to pay the applicable Securities Redemption Price with
respect to the Preferred Securities and will give the Depository
irrevocable instructions and authority to pay the Securities Redemption
Price to the Holders of the Preferred Securities, and (B) with respect to
Preferred Securities issued in definitive form and Common Securities,
provided that the Debenture Issuer has paid the Institutional Trustee a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Institutional Trustee will pay the
relevant Securities Redemption Price to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books
and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds deposited
as required, if applicable, then immediately prior to the close of
business on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue on the Securities so called
for redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such Securities
to receive the Securities Redemption Price, but without interest on such
Securities Redemption Price. Neither the Regular Trustees nor the Trust
shall be required to register or cause to be registered the transfer of
any Securities that have been so called for redemption. If any date fixed
for redemption of Securities is not a Business Day, then payment of the
Securities Redemption Price payable
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on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Securities Redemption Price in respect of
any Securities is improperly withheld or refused and not paid either by
the Institutional Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the actual date of
payment, in which case the Securities Redemption Price shall include such
additional accrued Distributions.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, the Depository or its nominee (or any successor Clearing
Agency or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holder
thereof, and (B) in respect of the Common Securities to the Holder
thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws and banking laws),
provided the acquiror is not the Holder of the Common Securities or the
obligor under the Indenture, the Sponsor or any of its subsidiaries may at
any time and from time to time purchase outstanding Preferred Securities
by tender, in the open market or by private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise required
by law and the Declaration, the Holders of the Preferred Securities will have no
voting rights.
(b) Subject to the requirements set forth in this paragraph, the Holders
of a majority in aggregate liquidation amount of the Preferred Securities,
voting separately as a class
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may direct the time, method, and place of conducting any proceeding for any
remedy available to the Institutional Trustee, or exercise any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee, as holder of the Debentures, to (i)
exercise the remedies available under the Indenture, conduct any proceeding for
any remedy available to the Debenture Trustee, or exercise any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii) waive
any past default and its consequences that is waivable under Section 2.6 of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable, provided, however,
that, where a consent under the Indenture would require the consent or act of
the Holders of greater than a majority of the Holders in principal amount of
Debentures affected thereby, (a "Super Majority"), the Institutional Trustee may
only give such consent or take such action at the written direction of the
Holders of at least the proportion in liquidation amount of the Preferred
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. The Institutional Trustee shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Preferred Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Institutional Trustee
or the Debenture Trustee as set forth above, the Institutional Trustee shall not
take any action in accordance with the directions of the Holders of the
Preferred Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Institutional Trustee fails to
enforce its rights under the Declaration, any Holder of Preferred Securities may
institute a legal proceeding directly against any person to enforce the
Institutional Trustee's rights under the Declaration without first instituting a
legal proceeding against the Institutional Trustee or any other person. If a
Declaration Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay interest or principal
on the Debentures on the date such interest or principal is otherwise payable
(or in the case of redemption, on the redemption date), then a holder of
Preferred Securities
I-12
<PAGE>
may directly institute a proceeding for enforcement of payment to such Holder of
the principal of or interest on the Debentures having a principal amount equal
to the aggregate liquidation amount of the Preferred Securities of such holder
(a "Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the holders of
the Common Securities Holder will be subrogated to the rights of such holder of
Preferred Securities to the extent of any payment made by the Issuer to such
holder of Preferred Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall
not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding, unless all of the Preferred
Securities are owned by the sponsor or any such Affiliate.
I-13
<PAGE>
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c), 7(a) and 8 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace any Trustee
or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the Event of
Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 2.6 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable, provided that, where a consent or
action under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Debentures affected thereby (a
"Super Majority"), the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Pursuant to this Section 6(c), the Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Institutional Trustee or the
Debenture Trustee as set forth above, the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Common
I-14
<PAGE>
Securities under this paragraph unless the Institutional Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Institutional Trustee fails to enforce
its rights under the Declaration, any Holder of Common Securities may institute
a legal proceeding directly against any Person to enforce the Institutional
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given at
a separate meeting of Holders of Common Securities convened for such purpose, at
a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the Declaration,
if any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of any or all of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single
I-15
<PAGE>
class will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities affected thereby; provided, that, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the Preferred Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of a
Majority in liquidation amount of such class of Securities.
(b) In the event the consent of the Institutional Trustee as the holder of
the Debentures is required under the Indenture with respect to any amendment,
modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where the taking of any such action under the
Indenture would require the consent of the holders of greater than a majority in
aggregate principal amount of the Debentures (a "Super Majority"), the
Institutional Trustee may only give such consent at the direction of the Holders
of at least the proportion in liquidation amount of the Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding; provided, further, that where the taking of any such
action under the Indenture would require the consent of every holder of the
Debentures, the consent of all holders of Securities shall be required;
provided, further, that the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Securities under this
Section 7(b) unless the Institutional Trustee has obtained an opinion of
nationally recognized independent tax counsel in such matters to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
I-16
<PAGE>
8. Pro Rata.
A reference in these terms of the Securities to any payment, distribution
or treatment as being "Pro Rata" shall mean pro rata to each Holder of
Securities according to the aggregate liquidation amount of the Securities held
by the relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu with the Common Securities and
payment thereon shall be made Pro Rata with the Common Securities, except that,
if an Event of Default under the Declaration occurs and is continuing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall be made
until the Holders of the Preferred Securities shall be paid in full the
Distributions, redemption, liquidation and other payments to which they are
entitled.
10. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
I-17
<PAGE>
The Holders of the Securities shall have no preemptive rights to subscribe
for any additional securities.
12. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate)
and the Indenture (including any supplemental indenture) to a Holder without
charge on written request to the Sponsor at its principal place of business.
The Securities shall be governed by and interpreted in accordance with the
laws of the State of Delaware, and all rights and remedies shall be governed by
such laws without regard to principles of conflict of laws.
I-18
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
This Preferred Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary. This
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 is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Securities
CUSIP NO. __________
Certificate Evidencing Preferred Securities
of
Citicorp Capital XIII
% Capital Securities
(liquidation amount $1,000 per Capital Security)
A1-1
<PAGE>
Citicorp Capital XIII, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that ______________ (the
"Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the % Capital Securities (liquidation amount $1,000 per Capital
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of ___________, 199__, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of __________, 199 .
CITICORP CAPITAL XIII
By:________________________________
Name:
Title: Regular Trustee
A1-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated __________, ____
The Wilmington Trust Company,
as Institutional Trustee
By:__________________________
Authorized Signatory
or
Citibank, N.A.
as Authenticating Agent
By:__________________________
Authorized Signatory
A1-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate
per annum of % (the "Coupon Rate") of the stated liquidation amount of $1,000
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than one semiannual Distribution period will bear interest thereon
compounded semiannually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full semiannual Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full semiannual Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 180-day semiannual Distribution period.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semiannually in arrears, on February 15 and August 15 of
each year, commencing on _______________________________________________ ,199__,
to the holders of record on the relevant record dates (as specified in the
Declaration) next preceding such payment dates. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 10 consecutive semiannual interest periods, including the first such
semiannual Distribution period during such extension period (each an "Extension
Period"), provided that no Extension Period shall extend beyond the date of the
maturity of the Debentures. As a consequence of such deferral, Distributions
will also be deferred. Despite such deferral, semiannual Distributions will
continue to accrue with interest thereon (to the extent permitted by applicable
law) at the Coupon Rate compounded semiannually during any such Extension
Period. Prior to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together with all such
previous and further
A1-4
<PAGE>
extensions within such Extension Period, may not exceed 10 consecutive
semiannual interest periods, including the first semiannual interest period
during such Extension Period, or extend beyond the maturity date of the
Debentures. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Upon the occurrence and continuation of a Tax Event, (x) the Sponsor shall
have the right, in certain circumstances described in Annex I to the
Declaration, to liquidate the Trust within 90 days following the occurrence of
such Tax Event and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust and (y) prior to February 15, 200 , the
Debenture Issuer shall have the right, in certain circumstances described in
Annex I to the Declaration, to redeem the Debentures in whole or in part within
90 days following the occurrence of such Tax Event and, following such
redemption, cause Securities with an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed to be redeemed by the
Trust.
Upon the occurrence and continuation of a Regulatory Capital Event, (x)
the Sponsor shall have the right to liquidate the Trust within 90 days following
the occurrence of such Regulatory Capital Event and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust and (y)
prior to February 15, 200 , the Debenture Issuer shall have the right to redeem
the Debentures in whole or in part within 90 days following the occurrence of
such Regulatory Capital Event and, following such redemption, cause Securities
with an aggregate liquidation amount equal to the aggregate principal amount of
the Debentures so redeemed to be redeemed by the Trust.
The Preferred Securities shall be redeemable as provided in the
Declaration.
A1-5
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________ agent to transfer
this Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee*: ___________________________________
- --------
* Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities and Exchange Act of 1934, as
amended.
A1-6
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
Citicorp Capital XIII
___________________________ % Common Securities
(liquidation amount $1,000 per Common Security)
Citicorp Capital XIII, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that Citicorp (the
"Holder") is the registered owner of common securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the %
Common Securities (liquidation amount $1,000 per Common Security) (the "Common
Securities"). The Common Securities are transferable on the books and records of
the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are 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 ___________, 199__, as the same may be amended from time
to time (the "Declaration"), including the designation of the terms of the
Common Securities as set forth in Annex I to the Declaration. Capitalized terms
used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Common Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of the
Declaration, the Common Securities Guarantee and the Indenture (including any
supplemental indenture) to a Holder without charge
A2-1
<PAGE>
upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ___ day
of , 199 .
CITICORP CAPITAL XIII
By:________________________________
Name:
Title: Regular Trustee
A2-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the within-mentioned
Declaration.
Dated __________, ____
The Wilmington Trust Company,
as Institutional Trustee
By:__________________________
Authorized Signatory
or
Citibank, N.A.,
as Authenticating Agent
By:__________________________
Authorized Signatory
A2-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of % (the "Coupon Rate") of the stated liquidation amount of $1,000 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Institutional Trustee. Distributions in arrears for more than
one semiannual Distribution period will bear interest thereon compounded
semiannually at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full semiannual Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full semiannual
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 180-day
semiannual Distribution period.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semiannually in arrears, on February 15 and August 15 of
each year, commencing on ______________________________________-- , 199 , to
Holders of record fifteen (15) days prior to such payment dates, which payment
dates shall correspond to the interest payment dates on the Debentures. The
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period from time to time on the Debentures for
a period not exceeding 10 consecutive calendar semiannual interest periods,
including the first such quarter during such extension period (each an
"Extension Period"), provided that no Extension Period shall extend beyond the
date of the maturity of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, semiannual
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded semiannually during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further
A2-4
<PAGE>
extensions within such Extension Period, may not exceed 10 consecutive calendar
semiannual interest periods, including the first semiannual interest period
during such Extension Period, or extend beyond the maturity date of the
Debentures. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Upon the occurrence and continuation of a Tax Event, (x) the Sponsor shall
have the right, in certain circumstances described in Annex I to the
Declaration, to liquidate the Trust within 90 days following the occurrence of
such Tax Event and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust and (y) prior to February 15, 200 , the
Debenture Issuer shall have the right, in certain circumstances described in
Annex I to the Declaration, to redeem the Debentures in whole or in part within
90 days following the occurrence of such Tax Event and, following such
redemption, cause Securities with an aggregate liquidation amount equal to the
aggregate amount of the Debentures so redeemed to be redeemed by the Trust.
Upon the occurrence and continuation of a Regulatory Capital Event, (x)
the Sponsor shall have the right to liquidate the Trust within 90 days following
the occurrence of such Regulatory Capital Event and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust and (y)
prior to February 15, 200 , the Debenture Issuer shall have the right to redeem
the Debentures in whole or in part within 90 days following the occurrence of
such Regulatory Capital Event and, following such redemption, cause Securities
with an aggregate liquidation amount equal to the aggregate amount of the
Debentures so redeemed to be redeemed by the Trust.
The Common Securities shall be redeemable as provided in the Declaration.
A2-5
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert assignee's social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints ______________________________________________________
_______________________________________________________________________________
_____________________________________________ agent to transfer this Common
Security Certificate on the books of the Trust. The agent may substitute another
to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee*: ___________________________________
- --------
* Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities and Exchange Act of 1934, as
amended.
A2-6
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
AMENDED AND RESTATED DECLARATION
OF TRUST
CITICORP CAPITAL XIV
Dated as of ___________, 199__
1
<PAGE>
Page
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.............................................. 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application......................... 9
SECTION 2.2 Lists of Holders of Securities........................... 9
SECTION 2.3 Reports by the Institutional Trustee..................... 10
SECTION 2.4 Periodic Reports to Institutional Trustee................ 10
SECTION 2.5 Evidence of Compliance with Conditions
Precedent................................................ 10
SECTION 2.6 Events of Default; Waiver................................ 10
SECTION 2.7 Event of Default; Notice................................. 12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name..................................................... 13
SECTION 3.2 Office................................................... 13
SECTION 3.3 Purpose.................................................. 13
SECTION 3.4 Authority................................................ 13
SECTION 3.5 Title to Property of the Trust........................... 14
SECTION 3.6 Powers and Duties of the Regular Trustees................ 14
SECTION 3.7 Prohibition of Actions by the Trust and
the Trustees............................................. 17
SECTION 3.8 Powers and Duties of the Institutional
Trustee.................................................. 18
SECTION 3.9 Certain Duties and Responsibilities of
the Institutional Trustee................................ 20
SECTION 3.10 Certain Rights of Institutional Trustee.................. 22
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 Limitation to Trust Property............................. 28
i
<PAGE>
Page
SECTION 3.17 Compensation and Fees.................................... 29
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.................. 29
SECTION 4.2 Responsibilities of the Sponsor.......................... 29
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees....................................... 30
SECTION 5.2 Delaware Trustee......................................... 30
SECTION 5.3 Institutional Trustee; Eligibility....................... 31
SECTION 5.4 Certain Qualifications of Regular
Trustees and Delaware Trustee Generally.................. 32
SECTION 5.5 Regular Trustees......................................... 32
SECTION 5.6 Delaware Trustee......................................... 32
SECTION 5.7 Appointment, Removal and Resignation of
Trustees................................................. 33
SECTION 5.8 Vacancies among Trustees................................. 34
SECTION 5.9 Effect of Vacancies...................................... 34
SECTION 5.10 Meetings................................................. 35
SECTION 5.11 Delegation of Power...................................... 35
SECTION 5.12 Merger, Conversion, Consolidation or
Succession to Business................................... 36
SECTION 5.13 Co-Trustees and Separate Trustee......................... 36
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions............................................ 38
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.................. 38
SECTION 7.2 Paying Agent............................................. 39
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
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Page
SECTION 8.1 Dissolution and Termination of Trust..................... 40
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities................................... 41
SECTION 9.2 Transfer of Certificates................................. 41
SECTION 9.3 Deemed Security Holders.................................. 43
SECTION 9.4 Book Entry Interests..................................... 43
SECTION 9.5 Notices to Clearing Agency............................... 45
SECTION 9.6 Appointment of Successor Clearing Agency................. 45
SECTION 9.7 Definitive Preferred Security
Certificates............................................. 45
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates............................................. 46
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability................................................ 46
SECTION 10.2 Exculpation.............................................. 47
SECTION 10.3 Fiduciary Duty........................................... 47
SECTION 10.4 Indemnification.......................................... 49
SECTION 10.5 Outside Businesses....................................... 52
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.............................................. 53
SECTION 11.2 Certain Accounting Matters............................... 53
SECTION 11.3 Banking.................................................. 53
SECTION 11.4 Withholding.............................................. 54
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments............................................... 54
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent................................ 57
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Page
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of
Institutional Trustee.................................... 58
SECTION 13.2 Representations and Warranties of
Delaware Trustee......................................... 59
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.................................................. 60
SECTION 14.2 Governing Law............................................ 61
SECTION 14.3 Intention of the Parties................................. 62
SECTION 14.4 Headings................................................. 62
SECTION 14.5 Successors and Assigns................................... 62
SECTION 14.6 Partial Enforceability................................... 62
SECTION 14.7 Counterparts............................................. 62
ANNEX I TERMS OF SECURITIES...................................... I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE...................... A2-1
EXHIBIT B SPECIMEN OF DEBENTURE.................................... B-1
EXHIBIT C UNDERWRITING AGREEMENT................................... C-1
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CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a)..................................................... 5.3(a)
310(c)..................................................... Inapplicable
311(c)..................................................... Inapplicable
312(a)..................................................... 2.2(a)
312(b)..................................................... 2.2(b)
313........................................................ 2.3
314(a)..................................................... 2.4
314(b)..................................................... Inapplicable
314(c)..................................................... 2.5
314(d)..................................................... Inapplicable
314(f)..................................................... Inapplicable
315(a)..................................................... 3.9(b)
315(c)..................................................... 3.9(a)
315(d)..................................................... 3.9(a)
316(a)..................................................... Annex I
316(c)..................................................... 3.6(e)
- ---------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CITICORP CAPITAL XIV
___________, 199__
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of ___________, 199__, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Citicorp Capital XIV
(the "Trust"), a trust under the Delaware Business Trust Act pursuant to a
Declaration of Trust dated as of [________________] (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on [________________], for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
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ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Additional Interest" has the meaning set forth in the Indenture.
"Adjusted Treasury Rate" has the same meaning set forth in Section 4(d) of
Annex I.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
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"Authorized Officer" of a Person means any Person that is authorized to
legally bind such Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than Saturday, Sunday or any other day
on which banking institutions in New York City, are permitted or required by any
applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code ss. 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
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.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the "Closing Date" under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.1(a).
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"Common Securities Guarantee" means the guarantee agreement to be dated as
of ___________, 199__ of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Comparable Treasury Issue" has the meaning set forth in Section 4(d) of
Annex I.
"Comparable Treasury Price" has the meaning set forth in Section 4(d) of
Annex I.
"Corporate Trust Office" means the office of the Institutional Trustee at
which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at Rodney Square North, 9th Floor, 1100
North Market Street, Wilmington, Delaware 19890-0001.
"Coupon Rate" has the meaning set forth in Section 2(a) of Annex I.
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Citicorp, a Delaware corporation, or any
successor entity resulting from any consolidation, amalgamation, merger or other
business combination, in its capacity as issuer of the Debentures under the
Indenture.
"Debenture Trustee" means Wilmington Trust Company, a national banking
association duly organized and existing under
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the laws of the United States, as trustee under the Indenture until a successor
is appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the Debenture
Issuer under the Indenture to be held by the Institutional Trustee, a specimen
certificate for such series of Debentures being Exhibit B.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Dissolution Tax Opinion" has the meaning set forth in Annex I hereto.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of Default
(as defined in the Indenture) that has occurred and is continuing in respect of
the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
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"Indenture" means the Indenture dated as of December 17, 1996, among the
Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"Institutional Trustee" has the meaning set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"No Recognition Opinion" has the meaning set forth in Annex I hereto.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman, a Vice Chairman, a Vice President, the Chief Auditor,
the Treasurer, the Secretary or an Assistant Secretary of such Person. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Declaration shall include:
6
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(a) a statement that each officer signing the Certificate has read
the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 7.2.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning specified in Section 7.1(a).
"Preferred Securities Guarantee" means the guarantee agreement to be dated
as of ___________, 199__, of the Sponsor in respect of the Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
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"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement between the Trust, the
Debenture Issuer and the underwriters designated by the Regular Trustees with
respect to the offer and sale of the Preferred Securities.
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both of them.
"Quotation Agent" has the meaning set forth in Section 4(d) of Annex I.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Regulatory Capital Event" has the meaning set forth in Annex I hereto.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Institutional Trustee,
any officer within the Corporate Trust Office of the Institutional Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
successor rule or regulation.
"Securities" means the Common Securities and the Preferred Securities.
8
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"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Sponsor" means Citicorp, a Delaware corporation, or any successor entity
resulting from any merger, consolidation, amalgamation or other business
combination, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section 5.7.
"Successor Institutional Trustee" has the meaning set forth in Section
5.7.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding 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 accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person
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shall continue in office in accordance with the terms hereof, and all other
Persons who may from time to time be duly appointed, qualified and serving as
Trustees in accordance with the provisions hereof, and references herein to a
Trustee or the Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Property" means (i) the Debentures, (ii) any cash on deposit in, or
owing to, the Institutional Trustee Account and (iii) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held by the Institutional Trustee for the Trust pursuant to this Declaration.
"Underwriting Agreement" means the Underwriting Agreement for the offering
and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by ss.ss. 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as
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equity securities representing undivided beneficial interests in the assets of
the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Institutional
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Institutional Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Institutional Trustee. The Institutional Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in Lists
of Holders given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity) provided that the Institutional Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations under
ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after May 15 of each year, the Institutional Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by ss. 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by ss. 313 of the Trust Indenture Act. The Institutional Trustee shall
also comply with the requirements of ss. 313(d) of the Trust Indenture Act.
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SECTION 2.4 Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such documents, reports and information as
required by ss. 314 (if any) and the compliance certificate required by ss. 314
of the Trust Indenture Act in the form, in the manner and at the times required
by ss. 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the proportion
in liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.
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The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section 2.6(b), the Event
of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have
waived such Event of Default under the Declaration as provided below in
this Section 2.6(b), the Event of Default under the Declaration may only
be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of
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Default with respect to the Common Securities and its consequences until all
Events of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated, and until such Events of Default have been so
cured, waived or otherwise eliminated, the Institutional Trustee will be deemed
to be acting solely on behalf of the Holders of the Preferred Securities and
only the Holders of the Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
such waiver, any such default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee, at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(d) The Institutional Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities actually known to a Responsible Officer of the Institutional Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Event of Default as defined in the Indenture, not including any periods of grace
provided for
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therein and irrespective of the giving of any notice provided therein); provided
that, except for a default in the payment of principal of (or premium, if any)
or interest on any of the Debentures or in the payment of any sinking fund
installment established for the Debentures, the Institutional Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Institutional Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Securities.
(e) The Institutional Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.01(a) and 5.01(b) of the Indenture;
or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Citicorp Capital XIV" as such name may be modified
from time to time by the Regular Trustees following written notice to the
Holders of Securities. The Trust's activities may be conducted under the name of
the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o
Citicorp, 399 Park Avenue, New York, New York 10043 Attn: Treasurer. On ten
Business Days written notice to the Holders of Securities, the Regular Trustees
may designate another principal office.
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SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary, or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and the
Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
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(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one
series of 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 Securities shall be
limited to a simultaneous issuance of both Preferred Securities and Common
Securities on each Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the Preferred Securities
in any State in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc. or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing upon notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by
the Sponsor, relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement and
Pricing Agreement providing for the sale of the Preferred
Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Securities; provided, however, that the Regular Trustees shall cause legal
title to the Debentures
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to be held of record in the name of the Institutional Trustee for the
benefit of the Holders of the Preferred Securities and the Holders of
Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Tax Event or Regulatory Capital Event;
provided that the Regular Trustees shall consult with the Sponsor and the
Institutional Trustee before taking or refraining from taking any
ministerial action in relation to a Tax Event or Regulatory Capital Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of ss. 316(c) of the Trust Indenture
Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
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(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities or to appoint a Paying Agent for the
Securities as provided in Section 7.2;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
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(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders in any material respect; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall not take any action that
is inconsistent with the purposes and functions of the Trust set forth in
Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Institutional Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.6
shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) on behalf of the Trust shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust not
to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
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(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under the Indenture, (C) exercise
any right to rescind or annul any declaration that the principal of all
the Debentures shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required unless the Trust shall have received an opinion
of a nationally recognized independent counsel experienced in such matters
to the effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes the
Trust will not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of record
in the name of the Institutional Trustee in trust for the benefit of the Holders
of the Securities. The right, title and interest of the Institutional Trustee to
the Debentures shall vest automatically in each Person who may hereafter be
appointed as Institutional Trustee in accordance with Section 5.7. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
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(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee, except as provided in
Section 7.2 hereof, on behalf of the Holders of the Securities and, upon
the receipt of payments of funds made in respect of the Debentures held by
the Institutional Trustee, deposit such funds into the Institutional
Trustee Account and make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the Institutional
Trustee Account in accordance with Section 6.1. Funds in the Institutional
Trustee Account shall be held uninvested until disbursed in accordance
with this Declaration. The Institutional Trustee Account shall be an
account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the rating assigned
to the Preferred Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the
occurrence of a Tax Event or a Regulatory Capital Event.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
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(e) The Institutional Trustee shall take any Legal Action which arises out
of or in connection with (i) an Event of Default of which a Responsible Officer
of the Institutional Trustee has actual knowledge or (ii) the Institutional
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act, and if such Institutional Trustee shall have failed to take such Legal
Action, the Holders of the Preferred Securities may take such Legal Action, to
the same extent as if such Holders of Preferred Securities held a principal
amount of Debentures equal to the liquidation amount of such Preferred
Securities, without first proceeding against the Institutional Trustee or the
Trust; provided however, that if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a Holder of Preferred Securities may directly institute a proceeding
for enforcement of payment to such Holder of the principal of or interest then
due on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder (a "Direct
Action") on or after the respective due date specified in the Debentures. In
connection with such Direct Action, the rights of the Holders of the Common
Securities will be subrogated to the rights of such Holder of Preferred
Securities to the extent of any payment made by the Issuer to such Holder of
Preferred Securities in such Direct Action. Except as provided in the preceding
sentences, the Holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures.
(f) The Institutional Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.7.
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(g) The Institutional Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) The Institutional Trustee shall be authorized to undertake any actions
set forth in ss. 317(a) of the Trust Indenture Act.
(i) Subject to this Section 3.8, the Institutional Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and in the Securities and no implied covenants shall be read
into this Declaration against the Institutional Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section 2.6)
of which a Responsible Officer of the Institutional Trustee has actual
knowledge, the Institutional Trustee shall exercise such of the rights and
powers vested in it by this Declaration, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for
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its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and in the Securities and the Institutional Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration and in
the Securities, and no implied covenants or obligations shall be
read into this Declaration against the Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; provided, however, that in the
case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Institutional Trustee, the Institutional Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Outstanding Preferred Securities relating to the
time, method and place of conducting any proceeding for any remedy
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available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Institutional Trustee under this Declaration and
the Trust Indenture Act and, to the extent applicable, Rule 3a-7 under the
Investment Company Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing
with the Sponsor. Money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the
Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise required
by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be
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liable for any default or misconduct of the Regular Trustees or the
Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with
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such advice or opinion, such counsel may be counsel to the Sponsor or any
of its Affiliates, and may include any of its employees. The Institutional
Trustee shall have the right at any time to seek instructions concerning
the administration of this Declaration from any court of competent
jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of
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the Securities, and the signature of the Institutional Trustee or its
agents alone shall be sufficient and effective to perform any such action
and no third party shall be required to inquire as to the authority of the
Institutional Trustee to so act or as to its compliance with any of the
terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Institutional Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration;
(xii) the Institutional Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration; and
(xiii) if (A) in performing its duties under this Declaration the
Institutional Trustee is required to decide between alternative courses of
action or (B) in construing any of the provisions in this Declaration, the
Institutional Trustee finds the same ambiguous or same inconsistent with
any other provisions contained herein or (C) the Institutional Trustee is
unsure of the application of any provision of this Declaration, then,
except as to any matter
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as to which the Preferred Securities Holders are entitled to vote under
the terms of this Declaration, the Institutional Trustee shall deliver a
notice to the Sponsor requesting written instructions of the Sponsor as to
the course of action to be taken. The Institutional Trustee shall take
such action, or refrain from taking such action, as the Institutional
Trustee shall be instructed in writing to take, or to refrain from taking,
by the Sponsor and shall be fully and conclusively protected in taking or
refraining from taking such action as so instructed; provided, however,
that the Institutional Trustee shall be under no duty to take any action
unless and until so instructed by the Sponsor; and provided, further, that
if the Institutional Trustee does not receive such instructions of the
Sponsor within ten Business Days after it has delivered such notice, or
such reasonably shorter period of time set forth in such notice (which to
the extent practicable shall not be fewer than two Business days), it may,
but shall be under no duty to, take or refrain from taking any such action
not inconsistent with this Declaration as it shall deem advisable and in
the best interest of the Securities Holders, in which event the
Institutional Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct.
(b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Institutional Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than Section
5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Regular Trustees or the Institutional Trustee described in this
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Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of
ss.3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is authorized
to execute on behalf of the Trust any documents that the Regular Trustees have
the power and authority to execute pursuant to Section 3.6; provided that, the
registration statement referred to in Section 3.6(b)(i), including any
amendments thereto, shall be signed by a majority of or, if there are less than
three, all of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall dissolve on February 15, 2052.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees and without the consent of
the Holders of the Securities, the Delaware Trustee or the Institutional
Trustee,
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consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State; provided that:
(i) if the Trust is not the surviving entity, such successor entity
(the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same as
the Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed or quoted, or any Successor Securities will be so upon notice of
issuance, on any national securities exchange or other organization on
which the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of counsel to the Trust
to the effect that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Preferred Securities Guarantee and the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger or replacement would cause the Trust or
the Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
SECTION 3.16 Limitation to Trust Property.
All payments made by the Institutional Trustee or a Paying Agent in
respect of the Securities shall be made only from the income and proceeds from
the Trust Property and only to the
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extent that there shall be sufficient income or proceeds from the Trust Property
to enable the Institutional Trustee or Paying Agent to make payments in
accordance with the terms hereof. Each Holder, by its acceptance of a Security,
agrees that it will look solely to the income and proceeds from the Trust
Property to the extent available for distribution to it as herein provided and
that the Trustees shall not be personally liable to it for any amount
distributable in respect of any Security or for any other liability in respect
of any Security; provided that this Section 3.16 does not limit the liability of
the Trustees expressly set forth elsewhere in this Declaration or, in the case
of the Institutional Trustee, in the Trust Indenture Act.
SECTION 3.17 Compensation and Fees.
(a) The Sponsor agrees:
(i) to pay the Institutional Trustee from time to time compensation
for all services rendered by the Institutional Trustee hereunder in
accordance with a separate fee agreement between the Sponsor and the
Institutional Trustee (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); and
(ii) except as otherwise expressly provided herein, to reimburse the
Institutional Trustee upon request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the
Institutional Trustee in accordance with any provision of this Declaration
(including the reasonable compensation and the expenses and disbursements
of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence, bad faith or willful
misconduct.
(b) The provisions of this Section shall survive the termination of this
Declaration.
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ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust at the same time as the Preferred Securities are
sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and
to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
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(e) to negotiate the terms of the Underwriting Agreement and Pricing
Agreement providing for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be three (3), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities; provided, however, that, the
number of Trustees shall in no event be less than two (2); provided
further that (1) one Trustee shall be the Delaware Trustee; (2) there
shall be at least one Trustee who is an employee or officer of, or is
affiliated with the Sponsor (a "Regular Trustee"); and (3) one Trustee
shall be the Institutional Trustee for so long as this Declaration is
required to qualify as an indenture under the Trust Indenture Act, and
such Trustee may also serve as Delaware Trustee if it meets the applicable
requirements.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
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provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a financial institution organized and doing business under
the laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 5.3(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Institutional Trustee shall cease to be eligible to
so act under Section 5.3(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 5.7(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of ss. 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in all
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respects comply with the provisions of ss. 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be:
Wilmington Trust Company
SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 Regular Trustees.
The initial Regular Trustees shall be:
Peter Gallant
John F. Rice
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by a majority
of or, if there are less than three, all of the Regular Trustees; and
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(c) a Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purposes of signing any documents which the Regular Trustees have power
and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Wilmington Trust Company
SECTION 5.7 Appointment, Removal and Resignation of
Trustees.
(a) Subject to Section 5.7(b), Trustees may be appointed or removed
without cause at any time except during an Event of Default:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities.
(b)(i) The Trustee that acts as Institutional Trustee shall not be removed
in accordance with Section 5.7(a) until a successor Trustee possessing the
qualifications to act as Institutional Trustee under Section 5.3 (a "Successor
Institutional Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Institutional Trustee and
delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with this Section 5.7(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections
5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such Successor
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Delaware Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the Sponsor
and the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Delaware Trustee or Successor Institutional Trustee
as the case may be if the Institutional Trustee or the Delaware Trustee delivers
an instrument of resignation in accordance with this Section 5.7.
(e) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.7 within 60 days after delivery of an instrument of resignation or removal,
the Institutional Trustee or Delaware Trustee resigning or being
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removed, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.7, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.10 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
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Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
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SECTION 5.12 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
SECTION 5.13 Co-Trustees and Separate Trustee.
(a) Unless an Event of Default shall have occurred and be continuing, at
any time or times for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property may
at the time be located, the Sponsor and the Institutional Trustee shall have
power to appoint, and upon the written request of the Institutional Trustee, the
Sponsor shall for such purpose join with the Institutional Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Institutional Trustee
either to act as co-trustee, jointly with the Institutional Trustee, of all or
any part of such Trust Property, or to act as separate trustee of any such
property, in either case with such powers as may be provided in the instrument
of appointment, and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section 5.13. If the Sponsor does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case of an Event of Default has occurred and is continuing, the Institutional
Trustee alone shall have power to make such appointment.
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(b) Should any written instrument from the Sponsor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Sponsor.
(c) Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(i) The Securities shall be executed and delivered and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees designated for such purpose
hereunder, shall be exercised, solely by such Trustees.
(ii) The rights, powers, duties and obligations hereby conferred or
imposed upon the Institutional Trustee in respect of any property covered
by such appointment shall be conferred or imposed upon and exercised or
performed by the Institutional Trustee or by the Institutional Trustee and
such co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any particular act
is to be performed, the Institutional Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such co-trustee
or separate trustee.
(iii) The Institutional Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Sponsor, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section 5.13, and, in case an Event of Default has
occurred and is continuing, the Institutional Trustee shall have power to
accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Sponsor. Upon the written request
of the Institutional Trustee, the Sponsor shall join with the
Institutional Trustee in the execution, delivery and performance of all
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instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner provided in this
Section 5.13.
(iv) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Institutional Trustee.
(v) The Institutional Trustee shall not be liable by reason of any
act or omission of a co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the Institutional Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in accordance with
the applicable terms of the relevant Holder's Securities. Distributions shall be
made on the Preferred Securities and the Common Securities in accordance with
the preferences set forth in their respective terms. If and to the extent that
the Debenture Issuer makes a payment of interest (including Compounded Interest
(as defined in the Indenture) and Additional Interest), premium and/or principal
on the Debentures held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class of
preferred securities representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in Annex I (the "Preferred
Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Common Securities.") The Trust shall issue no securities
or other interests in the assets of the Trust other than the Preferred
Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a Regular
Trustee. Such signature shall be the manual or facsimile signature of any
present or any future Regular Trustee. In case any Regular Trustee of the Trust
who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) A Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Institutional Trustee. The signature
shall be conclusive
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evidence that the Security has been authenticated under this Declaration.
The Institutional Trustee may appoint an authenticating agent acceptable
to the Trust to authenticate Securities. An authenticating agent may
authenticate Securities whenever the Institutional Trustee may do so. Each
reference in this Declaration to authentication by the Institutional Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Institutional Trustee to deal with the Sponsor or an Affiliate.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration and
the receipt of the consideration therefor, the Securities so issued shall be
deemed to be validly issued, fully paid and non-assessable.
(f) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
SECTION 7.2 Paying Agent.
The Trust shall appoint an agent (the "Paying Agent"), which shall
initially be Citibank, N.A., which shall make Distributions to the Securities
Holders from the Institutional Trustee Account and shall report the amounts of
such Distributions to the Regular Trustees and the Institutional Trustee. Any
Paying Agent shall have the revocable power to withdraw funds from the
Institutional Trustee Account for the purpose of making the Distributions. The
Institutional Trustee shall be entitled to rely upon a certificate of the Paying
Agent stating the amount of such funds so to be withdrawn and that the same are
to be applied by the Paying Agent in accordance with this Section 7.2. The
Regular Trustees may revoke such power and remove the Paying Agent in their sole
discretion. The Paying
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Agent may choose any co-paying agent that is acceptable to the Regular Trustees.
The Paying Agent shall be permitted to resign upon 30 days' notice to the
Regular Trustees. In the event of the removal or resignation of the Paying
Agent, the Regular Trustees shall appoint a successor that is reasonably
acceptable to the Institutional Trustee to act as Paying Agent (which shall be a
bank, trust company or an Affiliate of the Sponsor). The Regular Trustee shall
cause such successor Paying Agent or any additional Paying Agent appointed to
execute and deliver to the Trustees an instrument in which such Paying Agent or
additional Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Securities Holders in trust for the benefit of the
Securities Holders entitled thereto until such sums shall be paid to such
Securities Holders. The Paying Agent shall return all unclaimed funds to the
Institutional Trustee and upon resignation or removal of a Paying Agent such
Paying Agent also shall return all funds in its possession to the Institutional
Trustee. The provisions of Sections 3.8(d), 3.9, 3.10 and 3.17 shall apply to
the Paying Agent appointed hereunder, and the Paying Agent shall be bound by the
requirements with respect to paying agents of securities issued pursuant to the
Trust Indenture Act. Any reference in this Declaration to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust.
(a) The Trust shall dissolve:
(i) on February 15, 2052, the expiration term of the Trust;
(ii) upon the bankruptcy of the Sponsor;
(iii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; the consent of at least a majority
in liquidation amount of the Securities affected thereby voting together
as a single
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class to file a certificate of cancellation with respect to the Trust or
the revocation of the Sponsor's charter and the expiration of 90 days
after the date of revocation without a reinstatement thereof;
(iv) upon the election by the Regular Trustees to dissolve the
Trust, following the occurrence of a Tax Event or a Regulatory Capital
Event in accordance with the terms of the Securities and the distribution
of all of the Debentures endorsed thereon to the Holders of Securities in
exchange for all of the Securities;
(v) upon the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor or the Trust;
(vi) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Securities;
or
(vii) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a), and upon the completion of the winding up of the Trust, one
of the Trustees (each of whom is hereby authorized to take such action) shall
file a certificate of cancellation with the Secretary of State of the State of
Delaware terminating the Trust.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. Any
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transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) The Sponsor may not transfer the Common Securities.
SECTION 9.2 Transfer of Certificates.
(a) The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Trust or the Sponsor
may reasonably require) in respect of any tax or other government charges that
may be imposed in relation to it. Upon surrender for registration of transfer of
any Certificate, the Regular Trustees shall cause one or more new Certificates
to be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
(b) Upon receipt by the Institutional Trustee of a Definitive Preferred
Security Certificate, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Institutional Trustee, requesting transfer
of such Definitive Preferred Security Certificate for a beneficial interest in a
Global Certificate, the Institutional Trustee shall cancel such Definitive
Preferred Security Certificate and cause, or direct the Clearing Agency to
cause, the aggregate number of Preferred Securities represented by the
appropriate Global Certificate to be increased accordingly. If no Global
Certificates are then outstanding, the Trust shall issue and the Institutional
Trustee shall authenticate, upon written order of
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any Regular Trustee, an appropriate number of Preferred Securities in global
form.
(c) Upon receipt by the Institutional Trustee from the Clearing Agency or
its nominee on behalf of any Person having a beneficial interest in a Global
Certificate of written instructions or such other form of instructions as is
customary for the Clearing Agency or the person designated by the Clearing
Agency, requesting transfer of a beneficial interest in a Global Certificate for
a Definitive Preferred Security Certificate, then the Institutional Trustee or
the securities custodian, at the direction of the Institutional Trustee, will
cause, in accordance with the standing instructions and procedures existing
between the Clearing Agency and the securities custodian, the aggregate
principal amount of the Global Certificate to be reduced on its books and
records and, following such reduction, the Trust will execute and the
Institutional Trustee will authenticate and deliver to the transferee a
Definitive Preferred Security Certificate.
Definitive Preferred Security Certificates issued in exchange for a
beneficial interest in a Global Certificate shall be registered in such names
and in such authorized denominations as the Clearing Agency, pursuant to
instructions from its Clearing Agency Participants or indirect participants or
otherwise, shall instruct the Institutional Trustee. The Institutional Trustee
shall deliver such Preferred Securities to the persons in whose names such
Preferred Securities are so registered in accordance with the instructions of
the Clearing Agency.
(d) Notwithstanding any other provisions of this Declaration, a Global
Certificate may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or another nominee of the Clearing Agency or by
the Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the
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Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities, the
Preferred Securities Certificates, on original issuance, will be issued in the
form of one or more, fully registered, global Preferred Security Certificates
(each a "Global Certificate"), to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Global Certificates shall initially
be registered on the books and records of the Trust in the name of Cede & Co.,
the nominee of DTC, and no Preferred Security Beneficial Owner will receive a
definitive Preferred Security Certificate representing such Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 9.7. Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
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(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants.
Clearing Agency Participants shall have no rights under this Declaration
with respect to any Global Certificate held on their behalf by the Clearing
Agency or by the Institutional Trustee as the custodian of the Clearing Agency
or under such Global Certificate, and the Clearing Agency may be treated by the
Trust, the Institutional Trustee and any agent of the Trust or the Institutional
Trustee as the absolute owner of such Global Certificate for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Trust, the Institutional Trustee or any agent of the Trust or the Institutional
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Clearing Agency or impair, as between the
Clearing Agency and its Clearing Agency Participants, the operation of customary
practices of such Clearing Agency governing the exercise of the rights of a
holder of a beneficial interest in any Global Certificate.
At such time as all beneficial interests in a Global Certificate have
either been exchanged for Definitive Preferred Security Certificates to the
extent permitted by this Declaration or redeemed, repurchased or canceled in
accordance with the terms of this Declaration, such Global Certificate shall be
returned to the Clearing Agency for cancellation or retained and canceled by the
Institutional Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Certificate is exchanged for Definitive Preferred Security
Certificates, or if Definitive Preferred Security Certificates are exchanged for
a beneficial interest in a Global Certificate, Preferred Securities represented
by such Global Certificate shall be reduced or increased and an adjustment shall
be made on the books and records of the Institutional Trustee (if it is then the
securities custodian for such Global Certificate) with respect to
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such Global Certificate, by the Institutional Trustee or the securities
custodian, to reflect such reduction or increase.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security Holders
is required under this Declaration, unless and until Definitive Preferred
Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
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(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Preferred Security Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the instructions
of the Clearing Agency. Neither the Trustees nor the Trust shall be liable
for any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on, said
instructions of the Clearing Agency. The Definitive Preferred Security
Certificates shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the Regular Trustees,
as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends
or endorsements as the Regular Trustees may deem appropriate, or as may be
required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which Preferred Securities may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless,
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that
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may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of an ownership
interest in the relevant Securities, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
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ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Debenture Issuer shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders of the
Securities shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or
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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 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees and expenses), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo
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contendere or its equivalent, shall not, of itself, create a presumption
that the Company Indemnified Person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in
its favor by reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees and expenses) actually
and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the Trust
unless and only to the extent that the Court of Chancery of Delaware or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court)
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shall be made by the Debenture Issuer only as authorized in the specific
case upon a determination that indemnification of the Company Indemnified
Person is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority vote
of a quorum consisting of such Regular Trustees who were not parties to
such action, suit or proceeding, (2) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion, or (3) by the
Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by the Debenture Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) by the
Debenture Issuer that, based upon the facts known to the Regular Trustees,
counsel or the Debenture Issuer at the time such determination is made,
such Company Indemnified Person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to the best interests
of the Trust, or, with respect to any criminal proceeding, that such
Company Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in instances
where the Regular Trustees, independent legal counsel or Debenture Issuer
reasonably determine that such person deliberately breached his duty to
the Trust or its Common or Preferred Security Holders.
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(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the
Debenture Issuer or Preferred Security Holders of the Trust or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office. All rights to indemnification under
this Section 10.4(a) shall be deemed to be provided by a contract between
the Debenture Issuer and each Company Indemnified Person who serves in
such capacity at any time while this Section 10.4(a) is in effect. Any
repeal or modification of this Section 10.4(a) shall not affect any rights
or obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not
the Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or is
or was serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in the
same position under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or
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ratified, continue as to a person who has ceased to be a Company
Indemnified Person and shall inure to the benefit of the heirs, executors
and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense including taxes (other
than taxes based on the income of such Fiduciary Indemnified Person) incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration or the trust or trusts hereunder,
including the costs and expenses (including reasonable legal fees and expenses)
of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to
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recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Institutional Trustee may engage or
be interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year,
or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail, each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes.
(b) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(c) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority, an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law,
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and any other annual income tax returns required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
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ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may only be amended by a written
instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is
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permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without the
consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders of
a Majority in liquidation amount of the Common Securities and;
(f) the rights of the Holders of the Common Securities under Article V to
increase or decrease the number of, and appoint and remove Trustees shall not be
amended without the consent of the Holders of a Majority in liquidation amount
of the Common Securities; and
(g) Sections 12.1(a)(ii) and 12.1(b) shall not be amended without the
consent of the Institutional Trustee and Section 12.1(a)(iii) shall not be
amended without the consent of the Delaware Trustee; and
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(h) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor, provided such amendment does not have a material adverse effect
on the rights, preferences or privileges of the Holders;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) to modify, eliminate or add to any provision of the Declaration
to such extent as may be necessary to eliminate or reduce the adverse
effects resulting from the occurrence of a Tax Event or Regulatory Capital
Event, provided such amendment does not have a material adverse effect on
the rights, preferences or privileges of the Holders.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the 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
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shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Security Certificates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be counted for purposes
of determining whether the required percentage set forth in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least seven days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at
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a meeting. No proxy shall be valid after the expiration of 11 months from
the date thereof unless otherwise provided in the proxy. Every proxy shall
be revocable at the pleasure of the Holder of Securities executing it.
Except as otherwise provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the General Corporation
Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional
Trustee.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at
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the time of the Successor Institutional Trustee's acceptance of its appointment
as Institutional Trustee that:
(a) the Institutional Trustee is a Delaware banking corporation with
trust powers and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Institutional Trustee. The Declaration
has been duly executed and delivered by the Institutional Trustee, and it
constitutes a legal, valid and binding obligation of the Institutional
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in
equity or at law);
(c) the execution, delivery and performance of this Declaration by
the Institutional Trustee does not conflict with or constitute a breach of
the charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with
or notice to, any Delaware State or federal banking authority is required
for the execution, delivery or performance by the Institutional Trustee,
of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware
Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
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(a) The Delaware Trustee is duly organized, validly existing and in
good standing under the laws of the State of Delaware, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with
or notice to, any federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee, of this Declaration.
(d) The Delaware Trustee is a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
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Citicorp Capital XIV
c/o Citicorp
399 Park Avenue
New York, New York 10043
Attention: Treasurer
Telecopy: (212) 527-2765
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of
to the Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Department
Telecopy: (302) 651-1576
(c) if given to the Institutional Trustee, at the Institutional
Trustee's mailing address set forth below (or such other address as the
Institutional Trustee may give notice of to the Holders of the
Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Trustee
Administration
Telecopy: (302) 651-1576
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(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
Citicorp
399 Park Avenue
New York, New York 10043
Attention: Treasurer
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be governed
by and interpreted in accordance with the laws of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to the
principles of conflict of laws of the State of Delaware or any other
jurisdiction that would call for the application of the law of any jurisdiction
other than the State of Delaware; provided, however, that there shall not be
applicable to the Trust, the Trustees or this Declaration any provision of the
laws (statutory or common) of the State of Delaware pertaining to trusts that
relate to or regulate, in a manner inconsistent with the terms hereof (a) the
filing with any court or governmental body or agency of trustee accounts or
schedules of trustee fees and charges, (b) affirmative requirements to post
bonds for trustees, officers, agents or employees of a trust, (c) the necessity
for obtaining court or other governmental approval concerning the acquisition,
holding or disposition of real or personal property, (d) fees or other sums
payable to trustees, officers, agents or employees of a trust, (e) the
allocation of receipts and expenditures to income or principal, (f) restrictions
or
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limitations on the permissible nature, amount or concentration of trust
investments or requirements relating to the titling, storage or other manner of
holding or investing trust assets or (g) the establishment of fiduciary or other
standards of responsibility or limitations on the acts or powers of trustees
that are inconsistent with the limitations or liabilities or authorities and
powers of the Trustees as set forth or referenced in this Declaration. Section
3540 of Title 12 of the Delaware Code shall not apply to the Trust.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
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SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
__________________________________
Peter Gallant, as Regular Trustee
__________________________________
John F. Rice, as Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:_________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By:_________________________
Name:
Title:
CITICORP,
as Sponsor
By:_________________________
Name: John F. Rice
Title: Vice President
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ANNEX I
TERMS OF
[____]% CAPITAL SECURITIES
[____]% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of ___________, 199__ (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities ("Preferred Securities"
or "Capital Securities") and the Common Securities are set out below (each
capitalized term used but not defined herein has the meaning set forth in the
Declaration or, if not defined in such Declaration, as defined in the Prospectus
referred to below):
1. Designation and Number.
(a) Preferred Securities. ,000 Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of ,000,000
dollars ($ ,000,000) and a liquidation amount with respect to the assets of the
Trust of $1,000 per preferred security, are hereby designated for the purposes
of identification only as " % Capital Securities" (the "Preferred Securities").
The Preferred Security Certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange on
which the Preferred Securities are listed.
(b) Common Securities. Common Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of ,000 dollars ($
,000) and a liquidation amount with respect to the assets of the Trust of $1,000
per common security, are hereby designated for the purposes of identification
only as " % Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and
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additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate per
annum of % (the "Coupon Rate") of the stated liquidation amount of $1,000 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears for more than one
semiannual Distribution period will bear additional distributions thereon
compounded semiannually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full semiannual
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full semiannual Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 180-day semiannual Distribution period.
(b) Distributions on the Securities will be cumulative, will accrue from
___________, 199__, and will be payable semiannually in arrears, on February 15
and August 15 of each year, commencing on ,199 , except as otherwise described
below. The Debenture Issuer has the right under the Indenture to defer payments
of interest by extending the interest payment period from time to time on the
Debentures for a period not exceeding 10 consecutive semiannual Distribution
periods, including the first such semiannual Distribution period during such
period (each an "Extension Period"), during which Extension Period no interest
shall be due and payable on the Debentures, provided that no Extension Period
shall extend beyond the maturity date of the Debentures. As a consequence of
such deferral, Distributions will also be deferred. Despite such deferral,
semiannual Distributions will continue to accrue with additional distributions
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded semiannually during
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any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further extensions within such Extension Period, may
not exceed 10 consecutive semiannual Distribution periods, including the first
semiannual Distribution period during such Extension Period, or extend beyond
the maturity date of the Debentures. Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust on the relevant record
dates. While the Preferred Securities remain in book-entry only form, the
relevant record dates shall be one Business Day prior to the relevant payment
dates which payment dates correspond to the interest payment dates on the
Debentures. Subject to any applicable laws and regulations and the provisions of
the Declaration, each such payment in respect of the Preferred Securities will
be made as described under the heading "Description of the Preferred Securities
- -- Book-Entry Only Issuance -- The Depository Trust Company" in the Prospectus
Supplement dated __________, 199_, to the Prospectus dated December 17, 1996
(together, the "Prospectus"), of the Trust included in the Registration
Statement on Form S-3 of the Sponsor, the Trust and certain other business
trusts. The relevant record dates for the Common Securities shall be the same
record date as for the Preferred Securities. If the Preferred Securities shall
not continue to remain in book-entry only form, the relevant record dates for
the Preferred Securities shall conform to the rules of any securities exchange
on which the securities are listed and, if none, shall be selected by the
Regular Trustees, which dates shall be at least one Business Day but not more
than ten Business Days before the relevant payment dates, which payment dates
correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, will cease
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to be payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable to
the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the Securities is not a Business Day,
then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay).
(d) If at any time while the Institutional Trustee is the Holder of any
Debentures, the Debenture Issuer is required to pay any Additional Interest to
the Trust or the Institutional Trustee under the Debentures, the Payment Amount
with respect to Distributions on the Securities pursuant to Section 6.1 of the
Declaration shall include any such Additional Interest.
(e) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up or
liquidation of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, an amount equal to the aggregate of the stated liquidation amount of
$1,000 per Security plus accrued and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"), unless, in
connection with such dissolution, winding-up or termination, Debentures in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities
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in exchange for such Securities, after paying or making reasonable provision to
pay all claims and obligations of the Trust in accordance with Section 3808(e)
of the Business Trust Act.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part, whether at
maturity or upon redemption (either at the option of the Debenture Issuer at any
time on or after February 15, 200 or pursuant to a Tax Event or Regulatory
Capital Event at any time prior to February 15, 200 ), the proceeds from such
repayment or redemption shall be simultaneously applied to redeem, at the
Securities Redemption Price, Securities having an aggregate liquidation amount
equal to the aggregate principal amount of the Debentures so repaid or redeemed;
provided that holders will be given not less than 30 nor more than 60 days
notice of such redemption of Securities.
(b) The "Securities Redemption Price" for each $1,000 in stated
liquidation amount of Securities shall be:
(i) in the case of redemption of the Securities upon the maturity of
the Debentures, the liquidation amount of $1,000 per Security, plus
accrued and unpaid Distributions thereon to but excluding the date of
redemption; and
(ii) in the case of redemption of the Securities upon any redemption
of the Debentures by the Debenture Issuer (either at the option of the
Debenture Issuer at any time on or after February 15, 200 or pursuant to a
Tax Event or Regulatory Capital Event at any time prior to February 15,
200 ), equal to the applicable Redemption Price (as defined in the
Indenture) payable with respect to each $1,000 principal amount of
Debentures so redeemed in accordance with the terms of the Debentures.
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If, at any time, a Regulatory Capital Event shall occur and be continuing,
the Sponsor may (i) cause the Trust to be dissolved, with the result that after
satisfaction of liabilities to creditors, if any, Debentures with an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, the Securities, would be
distributed to the Holders of the Securities in liquidation of such holders'
interests in the Trust on a pro rata basis within 90 days following the
occurrence of such Regulatory Capital Event or (ii) within 90 days following the
occurrence of such Regulatory Capital Event, redeem the Debentures, in whole or
in part, upon not less than 30 nor more than 60 days' notice, for cash, with the
result that, following such redemption, the Securities will be redeemed by the
Trust at the Securities Redemption Price; provided, however, that if at the time
there is available to the Sponsor of the Trust the opportunity to eliminate
within such 90- day period, the Regulatory Capital Event by taking some
ministerial action, such as filing a form or making an election or pursuing some
other similar reasonable measure that has no adverse effect on the Trust, the
Sponsor or the holders of the Securities, then the Sponsor or the Trust will
pursue such measure in lieu of distribution or redemption of the Debentures.
(c) "Regulatory Capital Event" means a determination by the Sponsor, based
on an opinion of counsel experienced in such matters (who may be an employee of
the Sponsor or any of its affiliates), that, as a result of any amendment to,
clarification of or change (including any announced prospective change) in
applicable laws or regulations or official interpretations thereof or policies
with respect thereto, which amendment, clarification or change is effective
after the date of this Prospectus Supplement, there is more than an
insubstantial risk that the Preferred Securities will no longer constitute Tier
1 capital of the Sponsor (or its equivalent) for purposes of the capital
adequacy guidelines of the Board of Governors of the Federal Reserve System or
its successor as the Sponsor's primary federal banking regulator.
"Tax Event" means the Regular Trustees shall have received an opinion (a
"Dissolution Tax Opinion") of a nationally recognized independent tax counsel
experienced in such matters
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("Tax Counsel") to the effect that, as a result of (a) any amendment to,
clarification of or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after such date), there is more than an
insubstantial risk that (i) the Trust would be subject to United States federal
income tax with respect to income accrued or received on the Debentures, (ii)
interest payable to the Trust on the Debentures would not be deductible by the
Sponsor for United States federal income tax purposes or (iii) the Trust would
be subject to more than a de minimis amount of other taxes, duties or other
governmental charges, provided that any such change, clarification or amendment
becomes effective on or after the date of this Prospectus Supplement.
If, at any time, a Tax Event shall occur and be continuing, the Sponsor
may cause the Trust to be dissolved, with the result that after satisfaction of
liabilities to creditors, if any, Debentures with an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the distribution rate of, and accrued and unpaid interest equal to
accrued and unpaid distributions on, the Securities, would be distributed to the
holders of the Securities in liquidation of such holders' interests in the Trust
on a Pro Rata basis within 90 days following the occurrence of such Tax Event;
provided that such dissolution and distribution shall be conditioned on (i) the
Regular Trustees' receipt of an opinion of Tax Counsel (a "No Recognition
Opinion"), which opinion may rely on published revenue rulings of the Internal
Revenue Service, to the effect that the holders of the Securities will not
recognize any gain or loss for United States federal income tax purposes as a
result of such dissolution and distribution of Debentures and (ii) the Sponsor
being unable to avoid such Tax Event within such 90-day period by taking some
ministerial action or pursuing some other reasonable measure that will have no
adverse effect on the Trust, the Sponsor or the Holders of the Securities.
Furthermore, if after receipt of a Dissolution Tax Opinion by the Regular
Trustees (i) the Sponsor has received an opinion (a
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"Redemption Tax Opinion") of Tax Counsel that, as a result of a Tax Event, there
is more than an insubstantial risk that the Sponsor would be precluded from
deducting the interest on the Debentures for United States federal income tax
purposes, even after the Debentures were distributed to the holders of
Securities in liquidation of such Holders' interests in the Trust as described
above, or (ii) the Regular Trustees shall have been informed by such Tax Counsel
that it cannot deliver a No Recognition Opinion to the Trust, the Sponsor shall
have the right, within 90 days following the occurrence of such Tax Event, to
redeem the Debentures, in whole or in part, upon not less than 30 nor more than
60 days' notice, for cash, with the result that, following such redemption, the
Securities will be redeemed by the Trust at the Securities Redemption Price;
provided, however, that if at the time there is available to the Sponsor or the
Trust the opportunity to eliminate, within such 90-day period, the Tax Event by
taking some ministerial action, such as filing a form or making an election or
pursuing some other similar reasonable measure that has no adverse effect on the
Trust, the Sponsor or the Holders of the Securities, then the Sponsor or the
Trust will pursue such measure in lieu of redemption of the Debentures.
(d) In the case of an optional redemption, if fewer than all the
outstanding Securities are to be so redeemed, the Common Securities and the
Preferred Securities will be redeemed Pro Rata and the Preferred Securities to
be redeemed will be as described in Section 4(g)(ii) below.
(e) On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) The Depository Trust Company (the
"Depository") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Preferred Securities, will receive a registered
global certificate or certificates representing the Debentures to be delivered
upon such distribution and any certificates representing Securities, except for
certificates representing Preferred Securities held by the Depository or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Debentures having an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the Coupon Rate of, and accrued and unpaid interest equal to
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accrued and unpaid Distributions on such Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or reissue.
(f) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or before the date of
redemption.
(g) The procedure with respect to redemptions and distributions of
Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities
to be redeemed or exchanged not fewer than 30 nor more than 60 days before
the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 4(g)(i), a
Redemption/ Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of
record by the Depository or its nominee (or any successor Clearing Agency
or its nominee), the distribution of the proceeds of such redemption will
be made to each Clearing Agency Participant (or Person on whose behalf
such nominee
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holds such securities) in accordance with the procedures applied by such
agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are to be redeemed as set out in this Section 4 (which notice
will be irrevocable), then (A) while the Preferred Securities are in
book-entry only form, with respect to the Preferred Securities, by 12:00
noon, New York City time, on the redemption date, provided that the
Debenture Issuer has paid the Institutional Trustee a sufficient amount of
cash in connection with the related redemption or maturity of the
Debentures, the Institutional Trustee will deposit irrevocably with the
Depository or its nominee (or successor Clearing Agency or its nominee)
funds sufficient to pay the applicable Securities Redemption Price with
respect to the Preferred Securities and will give the Depository
irrevocable instructions and authority to pay the Securities Redemption
Price to the Holders of the Preferred Securities, and (B) with respect to
Preferred Securities issued in definitive form and Common Securities,
provided that the Debenture Issuer has paid the Institutional Trustee a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Institutional Trustee will pay the
relevant Securities Redemption Price to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books
and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds deposited
as required, if applicable, then immediately prior to the close of
business on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue on the Securities so called
for redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such Securities
to receive the Securities Redemption Price, but without interest on such
Securities Redemption Price. Neither the Regular Trustees nor the Trust
shall be required to register or cause to be registered the transfer of
any Securities that have been so called for redemption. If any date fixed
for redemption of Securities is not a Business Day, then payment of the
Securities Redemption Price payable
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on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Securities Redemption Price in respect of
any Securities is improperly withheld or refused and not paid either by
the Institutional Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the actual date of
payment, in which case the Securities Redemption Price shall include such
additional accrued Distributions.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, the Depository or its nominee (or any successor Clearing
Agency or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holder
thereof, and (B) in respect of the Common Securities to the Holder
thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws and banking laws),
provided the acquiror is not the Holder of the Common Securities or the
obligor under the Indenture, the Sponsor or any of its subsidiaries may at
any time and from time to time purchase outstanding Preferred Securities
by tender, in the open market or by private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise required
by law and the Declaration, the Holders of the Preferred Securities will have no
voting rights.
(b) Subject to the requirements set forth in this paragraph, the Holders
of a majority in aggregate liquidation amount of the Preferred Securities,
voting separately as a class
I-11
<PAGE>
may direct the time, method, and place of conducting any proceeding for any
remedy available to the Institutional Trustee, or exercise any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee, as holder of the Debentures, to (i)
exercise the remedies available under the Indenture, conduct any proceeding for
any remedy available to the Debenture Trustee, or exercise any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii) waive
any past default and its consequences that is waivable under Section 2.6 of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable, provided, however,
that, where a consent under the Indenture would require the consent or act of
the Holders of greater than a majority of the Holders in principal amount of
Debentures affected thereby, (a "Super Majority"), the Institutional Trustee may
only give such consent or take such action at the written direction of the
Holders of at least the proportion in liquidation amount of the Preferred
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. The Institutional Trustee shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Preferred Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Institutional Trustee
or the Debenture Trustee as set forth above, the Institutional Trustee shall not
take any action in accordance with the directions of the Holders of the
Preferred Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Institutional Trustee fails to
enforce its rights under the Declaration, any Holder of Preferred Securities may
institute a legal proceeding directly against any person to enforce the
Institutional Trustee's rights under the Declaration without first instituting a
legal proceeding against the Institutional Trustee or any other person. If a
Declaration Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay interest or principal
on the Debentures on the date such interest or principal is otherwise payable
(or in the case of redemption, on the redemption date), then a holder of
Preferred Securities
I-12
<PAGE>
may directly institute a proceeding for enforcement of payment to such Holder of
the principal of or interest on the Debentures having a principal amount equal
to the aggregate liquidation amount of the Preferred Securities of such holder
(a "Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the holders of
the Common Securities Holder will be subrogated to the rights of such holder of
Preferred Securities to the extent of any payment made by the Issuer to such
holder of Preferred Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall
not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding, unless all of the Preferred
Securities are owned by the sponsor or any such Affiliate.
I-13
<PAGE>
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c), 7(a) and 8 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace any Trustee
or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the Event of
Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 2.6 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable, provided that, where a consent or
action under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Debentures affected thereby (a
"Super Majority"), the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Pursuant to this Section 6(c), the Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Institutional Trustee or the
Debenture Trustee as set forth above, the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Common
I-14
<PAGE>
Securities under this paragraph unless the Institutional Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Institutional Trustee fails to enforce
its rights under the Declaration, any Holder of Common Securities may institute
a legal proceeding directly against any Person to enforce the Institutional
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given at
a separate meeting of Holders of Common Securities convened for such purpose, at
a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the Declaration,
if any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of any or all of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single
I-15
<PAGE>
class will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities affected thereby; provided, that, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the Preferred Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of a
Majority in liquidation amount of such class of Securities.
(b) In the event the consent of the Institutional Trustee as the holder of
the Debentures is required under the Indenture with respect to any amendment,
modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where the taking of any such action under the
Indenture would require the consent of the holders of greater than a majority in
aggregate principal amount of the Debentures (a "Super Majority"), the
Institutional Trustee may only give such consent at the direction of the Holders
of at least the proportion in liquidation amount of the Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding; provided, further, that where the taking of any such
action under the Indenture would require the consent of every holder of the
Debentures, the consent of all holders of Securities shall be required;
provided, further, that the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Securities under this
Section 7(b) unless the Institutional Trustee has obtained an opinion of
nationally recognized independent tax counsel in such matters to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
I-16
<PAGE>
8. Pro Rata.
A reference in these terms of the Securities to any payment, distribution
or treatment as being "Pro Rata" shall mean pro rata to each Holder of
Securities according to the aggregate liquidation amount of the Securities held
by the relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu with the Common Securities and
payment thereon shall be made Pro Rata with the Common Securities, except that,
if an Event of Default under the Declaration occurs and is continuing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall be made
until the Holders of the Preferred Securities shall be paid in full the
Distributions, redemption, liquidation and other payments to which they are
entitled.
10. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
I-17
<PAGE>
The Holders of the Securities shall have no preemptive rights to subscribe
for any additional securities.
12. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate)
and the Indenture (including any supplemental indenture) to a Holder without
charge on written request to the Sponsor at its principal place of business.
The Securities shall be governed by and interpreted in accordance with the
laws of the State of Delaware, and all rights and remedies shall be governed by
such laws without regard to principles of conflict of laws.
I-18
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
This Preferred Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary. This
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 is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Securities
CUSIP NO. __________
Certificate Evidencing Preferred Securities
of
Citicorp Capital XIV
% Capital Securities
(liquidation amount $1,000 per Capital Security)
A1-1
<PAGE>
Citicorp Capital XIV, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that ______________ (the
"Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the % Capital Securities (liquidation amount $1,000 per Capital
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of ___________, 199__, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of __________, 199 .
CITICORP CAPITAL XIV
By:________________________________
Name:
Title: Regular Trustee
A1-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated __________, ____
The Wilmington Trust Company,
as Institutional Trustee
By:__________________________
Authorized Signatory
or
Citibank, N.A.
as Authenticating Agent
By:__________________________
Authorized Signatory
A1-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate
per annum of % (the "Coupon Rate") of the stated liquidation amount of $1,000
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than one semiannual Distribution period will bear interest thereon
compounded semiannually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full semiannual Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full semiannual Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 180-day semiannual Distribution period.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semiannually in arrears, on February 15 and August 15 of
each year, commencing on _______________________________________________ ,199__,
to the holders of record on the relevant record dates (as specified in the
Declaration) next preceding such payment dates. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 10 consecutive semiannual interest periods, including the first such
semiannual Distribution period during such extension period (each an "Extension
Period"), provided that no Extension Period shall extend beyond the date of the
maturity of the Debentures. As a consequence of such deferral, Distributions
will also be deferred. Despite such deferral, semiannual Distributions will
continue to accrue with interest thereon (to the extent permitted by applicable
law) at the Coupon Rate compounded semiannually during any such Extension
Period. Prior to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together with all such
previous and further
A1-4
<PAGE>
extensions within such Extension Period, may not exceed 10 consecutive
semiannual interest periods, including the first semiannual interest period
during such Extension Period, or extend beyond the maturity date of the
Debentures. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Upon the occurrence and continuation of a Tax Event, (x) the Sponsor shall
have the right, in certain circumstances described in Annex I to the
Declaration, to liquidate the Trust within 90 days following the occurrence of
such Tax Event and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust and (y) prior to February 15, 200 , the
Debenture Issuer shall have the right, in certain circumstances described in
Annex I to the Declaration, to redeem the Debentures in whole or in part within
90 days following the occurrence of such Tax Event and, following such
redemption, cause Securities with an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed to be redeemed by the
Trust.
Upon the occurrence and continuation of a Regulatory Capital Event, (x)
the Sponsor shall have the right to liquidate the Trust within 90 days following
the occurrence of such Regulatory Capital Event and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust and (y)
prior to February 15, 200 , the Debenture Issuer shall have the right to redeem
the Debentures in whole or in part within 90 days following the occurrence of
such Regulatory Capital Event and, following such redemption, cause Securities
with an aggregate liquidation amount equal to the aggregate principal amount of
the Debentures so redeemed to be redeemed by the Trust.
The Preferred Securities shall be redeemable as provided in the
Declaration.
A1-5
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________ agent to transfer
this Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee*: ___________________________________
- --------
* Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities and Exchange Act of 1934, as
amended.
A1-6
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
Citicorp Capital XIV
___________________________ % Common Securities
(liquidation amount $1,000 per Common Security)
Citicorp Capital XIV, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that Citicorp (the
"Holder") is the registered owner of common securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the %
Common Securities (liquidation amount $1,000 per Common Security) (the "Common
Securities"). The Common Securities are transferable on the books and records of
the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are 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 ___________, 199__, as the same may be amended from time
to time (the "Declaration"), including the designation of the terms of the
Common Securities as set forth in Annex I to the Declaration. Capitalized terms
used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Common Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of the
Declaration, the Common Securities Guarantee and the Indenture (including any
supplemental indenture) to a Holder without charge
A2-1
<PAGE>
upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ___ day
of , 199 .
CITICORP CAPITAL XIV
By:________________________________
Name:
Title: Regular Trustee
A2-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the within-mentioned
Declaration.
Dated __________, ____
The Wilmington Trust Company,
as Institutional Trustee
By:__________________________
Authorized Signatory
or
Citibank, N.A.,
as Authenticating Agent
By:__________________________
Authorized Signatory
A2-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of % (the "Coupon Rate") of the stated liquidation amount of $1,000 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Institutional Trustee. Distributions in arrears for more than
one semiannual Distribution period will bear interest thereon compounded
semiannually at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full semiannual Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full semiannual
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 180-day
semiannual Distribution period.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semiannually in arrears, on February 15 and August 15 of
each year, commencing on ______________________________________-- , 199 , to
Holders of record fifteen (15) days prior to such payment dates, which payment
dates shall correspond to the interest payment dates on the Debentures. The
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period from time to time on the Debentures for
a period not exceeding 10 consecutive calendar semiannual interest periods,
including the first such quarter during such extension period (each an
"Extension Period"), provided that no Extension Period shall extend beyond the
date of the maturity of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, semiannual
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded semiannually during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further
A2-4
<PAGE>
extensions within such Extension Period, may not exceed 10 consecutive calendar
semiannual interest periods, including the first semiannual interest period
during such Extension Period, or extend beyond the maturity date of the
Debentures. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Upon the occurrence and continuation of a Tax Event, (x) the Sponsor shall
have the right, in certain circumstances described in Annex I to the
Declaration, to liquidate the Trust within 90 days following the occurrence of
such Tax Event and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust and (y) prior to February 15, 200 , the
Debenture Issuer shall have the right, in certain circumstances described in
Annex I to the Declaration, to redeem the Debentures in whole or in part within
90 days following the occurrence of such Tax Event and, following such
redemption, cause Securities with an aggregate liquidation amount equal to the
aggregate amount of the Debentures so redeemed to be redeemed by the Trust.
Upon the occurrence and continuation of a Regulatory Capital Event, (x)
the Sponsor shall have the right to liquidate the Trust within 90 days following
the occurrence of such Regulatory Capital Event and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust and (y)
prior to February 15, 200 , the Debenture Issuer shall have the right to redeem
the Debentures in whole or in part within 90 days following the occurrence of
such Regulatory Capital Event and, following such redemption, cause Securities
with an aggregate liquidation amount equal to the aggregate amount of the
Debentures so redeemed to be redeemed by the Trust.
The Common Securities shall be redeemable as provided in the Declaration.
A2-5
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert assignee's social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints ______________________________________________________
_______________________________________________________________________________
_____________________________________________ agent to transfer this Common
Security Certificate on the books of the Trust. The agent may substitute another
to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee*: ___________________________________
- --------
* Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities and Exchange Act of 1934, as
amended.
A2-6
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EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
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EXHIBIT C
UNDERWRITING AGREEMENT
C-1
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PREFERRED SECURITIES GUARANTEE AGREEMENT
Citicorp Capital X
Dated as of ___________________, 199__
====================================
<PAGE>
Page
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation................. 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............... 5
SECTION 2.2 Lists of Holders of Securities................. 6
SECTION 2.3 Reports by the Preferred Guarantee
Trustee........................................ 6
SECTION 2.4 Periodic Reports to Preferred Guarantee
Trustee........................................ 6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent...................................... 6
SECTION 2.6 Events of Default; Waiver...................... 7
SECTION 2.7 Event of Default; Notice....................... 7
SECTION 2.8 Conflicting Interests.......................... 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred
Guarantee Trustee.............................. 8
SECTION 3.2 Certain Rights of Preferred Guarantee
Trustee........................................ 10
SECTION 3.3 Not Responsible for Recitals or Issuance
of Preferred Securities Guarantee.............. 12
SECTION 3.4 Compensation and Reimbursement................. 12
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility....... 13
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustee.................... 14
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Page
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee...................................... 15
SECTION 5.2 Waiver of Notice and Demand.................... 15
SECTION 5.3 Obligations Not Affected....................... 15
SECTION 5.4 Rights of Holders.............................. 16
SECTION 5.5 Guarantee of Payment........................... 17
SECTION 5.6 Subrogation.................................... 17
SECTION 5.7 Independent Obligations........................ 17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions..................... 17
SECTION 6.2 Ranking........................................ 18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.................................... 18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.................................... 19
SECTION 8.2 Indemnification................................ 19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns......................... 20
SECTION 9.2 Amendments..................................... 20
SECTION 9.3 Notices........................................ 20
SECTION 9.4 Benefit........................................ 21
SECTION 9.5 Governing Law.................................. 21
ii
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of _______________________, is executed and delivered by Citicorp, a Delaware
corporation (the "Guarantor"), and Wilmington Trust Company, a national banking
association duly organized and existing under the laws of the United States, as
trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of Citicorp Capital X, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of_____________________, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof _____________ preferred securities, having an
aggregate liquidation amount of $______________, designated the ______%
Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to acquire the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
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NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee has
the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the context
otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
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"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a day on which federal or state
banking institutions in the Borough of Manhattan, The City of New York, are
authorized or obligated by law, executive order or regulation to close.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 101 Barclay Street, 21 West,
New York, New York 10286.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities of
the Guarantor designated the_______% Junior Subordinated Deferrable Interest
Debentures due ___ 15, ____ held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Preferred Securities to
the extent the Issuer shall have funds available therefor, (ii) the redemption
price, including all accrued and unpaid Distributions to the date of redemption
(the "Redemption Price") to the extent the Issuer has funds available therefor,
with respect to any Preferred Securities called for redemption by
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the Issuer, and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Issuer (other than in connection with the distribution of
Debentures to the Holders in exchange for Preferred Securities as provided in
the Declaration), the lesser of (a) the aggregate of the liquidation amount and
all accrued and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent the Issuer shall have funds available therefor, and (b)
the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an Event of Default (as defined in the Indenture) has
occurred and is continuing, no Guarantee Payments under the Common Securities
Guarantee with respect to the Common Securities shall be made until the Holders
of Preferred Securities shall be paid in full the Guarantee Payments to which
they are entitled under this Preferred Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee or of any Affiliate of the Preferred Guarantee
Trustee.
"Indenture" means the Indenture dated as of December 17, 1996, among the
Guarantor (the "Debenture Issuer") and Wilmington Trust Company, as trustee, and
any indenture supplemental thereto pursuant to which certain subordinated debt
securities of the Debenture Issuer are to be issued to the Property Trustee of
the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or
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otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Preferred Securities.
"Officers' Certificate" means a certificate signed by the Chairman, a Vice
Chairman, a Vice President, the Chief Auditor, the Secretary or an Assistant
Secretary of the Guarantor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Preferred
Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
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"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee Trustee" means Wilmington Trust Company, a national
banking association duly organized and existing under the laws of the United
States, until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trust Securities" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts
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with the duties imposed by Section 310 to 317, inclusive, of the Trust Indenture
Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holders of the Preferred Securities ("List of
Holders") as of such date, (i) within one Business Day after January 1 and June
30 of each year, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Preferred Guarantee Trustee by the Guarantor. The
Preferred Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Preferred Guarantee 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 Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
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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 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall have
received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee
Trustee
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Preferred Securities,
and the Preferred Guarantee Trustee shall not transfer this Preferred Securities
Guarantee to any Person except a Holder of Preferred Securities exercising his
or her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Preferred Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to a Responsible Officer of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such
of the rights and powers vested in it by this Preferred Securities Guarantee,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
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(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants or obligations shall
be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee 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 Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee 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 the
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Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee 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 Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters 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 Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
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(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Preferred Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Guarantee 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 Preferred Guarantee Trustee; provided
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee 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 Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Preferred Securities Guarantee, both of which shall
be conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action
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hereunder, the Preferred Guarantee Trustee (i) may request instructions
from the Holders of a Majority in liquidation amount of the Preferred
Securities, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall be
fully and conclusively protected in relying on or acting in accordance
with such instructions.
(xi) The Preferred Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee 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
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
SECTION 3.4 Compensation and Reimbursement
The Guarantor agrees:
(a) To pay the Preferred Guarantee Trustee from time to time such
reasonable compensation as the Guarantor and the Preferred Guarantee Trustee
shall from time to time agree in writing for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); and
(b) Except as otherwise expressly provided herein, to reimburse the
Preferred Guarantee Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Preferred Guarantee Trustee
in accordance with the provisions of this Preferred Securities Guarantee
(including the reasonable compensation and expenses of its agents and counsel),
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except any such expense, disbursement or advance that may be attributable to its
negligence or bad faith.
The provisions of this Section shall survive the termination of this
Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(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 Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
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SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustee
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except during an
event of default.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or until
its removal or resignation. The Preferred Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of removal or resignation, the Preferred Guarantee
Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued to
the date of such termination, removal or resignation.
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(g) The Guarantor shall give notice of each resignation and each removal
of the Preferred Guarantee Trustee and each appointment of a Successor Preferred
Guarantee Trustee to all Holders in the manner provided in Section 9.3 hereof.
Each notice shall include the name of the Successor Preferred Guarantee Trustee
and the address of its corporate trust office.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption
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Price, Liquidation Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or to direct the exercise of any
trust or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce such Preferred
Securities Guarantee, any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. Notwithstanding the foregoing, if the
Company has failed to make
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a guarantee payment, a holder of Preferred Securities may directly institute a
proceeding against the Company for enforcement of the Preferred Securities
Guarantee for such payment. The Guarantor waives any right or remedy to require
that any action be brought first against the Issuer or any other person or
entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Preferred Securities Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Preferred Securities Guarantee, if, at the time
of any such payment, any amounts are due and unpaid under this Preferred
Securities Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default or an event of default under the Declaration
or the Guarantor has exercised its option to defer interest payments on the
Debentures, then (a) the Guarantor shall not declare or pay any dividends on,
make any distribution with respect to, or redeem, purchase, acquire for
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value or make a liquidation payment with respect to any of its capital stock
(other than (i) purchases or acquisitions of shares of Common Stock in
connection with the satisfaction by the Guarantor of its obligations under any
employee benefit plans or other contractual obligations (other than a
contractual obligation ranking pari passu with or junior in right of payment to
the Debentures) entered into prior to the date of issuance of the Debentures,
(ii) as a result of a reclassification of the Guarantor's capital stock or the
exchange or conversion of one class or series of the Guarantor's capital stock
for another class or series of the Guarantor's capital stock or (iii) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock of the
Guarantor or the security being converted or exchanged) and (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Guarantor that
rank pari passu with or junior in right of payment to the Debentures.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate (i) upon full payment
of the Redemption Price of all Preferred Securities, (ii) upon the distribution
of the Debentures to the Holders of all of the Preferred Securities or (iii)
upon full payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Preferred Securities must restore
payment of any sums paid under the Preferred Securities or under this Preferred
Securities Guarantee.
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Preferred Securities
Guarantee 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
Preferred Securities Guarantee 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 negligence or willful misconduct with respect to such acts
or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, 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 Preferred Securities might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any and all loss, liability, damage,
claim or expense incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The obligation to indemnify as set forth in this Section 8.2
shall survive the termination of this Preferred Securities Guarantee.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
This Preferred Securities Guarantee may be amended only by an instrument
in writing signed by the Guarantor, provided that, except with respect to any
changes that do not adversely affect the rights of Holders (in which case no
consent of Holders will be required), this Preferred Securities Guarantee may
only be amended with the prior approval of the Holders of at least a Majority in
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all the
outstanding Preferred Securities; and provided, further, that no amendment that
affects the rights, powers, duties, obligations or immunities of the Preferred
Guarantee Trustee shall be effective unless approved in writing by the Preferred
Guarantee Trustee. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders of the Securities apply to the giving of such
approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
Wilmington Trust Company
Rodney Square North
9th Floor
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee
Administration
Telecopy: (302) 651-8882
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(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
Citibank, N.A.
Office of Corporate Finance
153 East 53rd Street, 6th floor
New York, New York 10043
Attention: Gregory C. Ehlke, Vice President
Telecopy: (212) 527-2765
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
CITICORP, as Guarantor
By:_________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as
Preferred Guarantee Trustee
By:_________________________
Name:
Title:
23
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PREFERRED SECURITIES GUARANTEE AGREEMENT
Citicorp Capital XI
Dated as of ___________________, 199__
====================================
<PAGE>
Page
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation................. 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............... 5
SECTION 2.2 Lists of Holders of Securities................. 6
SECTION 2.3 Reports by the Preferred Guarantee
Trustee........................................ 6
SECTION 2.4 Periodic Reports to Preferred Guarantee
Trustee........................................ 6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent...................................... 6
SECTION 2.6 Events of Default; Waiver...................... 7
SECTION 2.7 Event of Default; Notice....................... 7
SECTION 2.8 Conflicting Interests.......................... 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred
Guarantee Trustee.............................. 8
SECTION 3.2 Certain Rights of Preferred Guarantee
Trustee........................................ 10
SECTION 3.3 Not Responsible for Recitals or Issuance
of Preferred Securities Guarantee.............. 12
SECTION 3.4 Compensation and Reimbursement................. 12
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility....... 13
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustee.................... 14
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Page
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee...................................... 15
SECTION 5.2 Waiver of Notice and Demand.................... 15
SECTION 5.3 Obligations Not Affected....................... 15
SECTION 5.4 Rights of Holders.............................. 16
SECTION 5.5 Guarantee of Payment........................... 17
SECTION 5.6 Subrogation.................................... 17
SECTION 5.7 Independent Obligations........................ 17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions..................... 17
SECTION 6.2 Ranking........................................ 18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.................................... 18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.................................... 19
SECTION 8.2 Indemnification................................ 19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns......................... 20
SECTION 9.2 Amendments..................................... 20
SECTION 9.3 Notices........................................ 20
SECTION 9.4 Benefit........................................ 21
SECTION 9.5 Governing Law.................................. 21
ii
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of _______________________, is executed and delivered by Citicorp, a Delaware
corporation (the "Guarantor"), and Wilmington Trust Company, a national banking
association duly organized and existing under the laws of the United States, as
trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of Citicorp Capital XI, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of_____________________, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof _____________ preferred securities, having an
aggregate liquidation amount of $______________, designated the ______%
Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to acquire the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
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NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee has
the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the context
otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
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"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a day on which federal or state
banking institutions in the Borough of Manhattan, The City of New York, are
authorized or obligated by law, executive order or regulation to close.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 101 Barclay Street, 21 West,
New York, New York 10286.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities of
the Guarantor designated the_______% Junior Subordinated Deferrable Interest
Debentures due ___ 15, ____ held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Preferred Securities to
the extent the Issuer shall have funds available therefor, (ii) the redemption
price, including all accrued and unpaid Distributions to the date of redemption
(the "Redemption Price") to the extent the Issuer has funds available therefor,
with respect to any Preferred Securities called for redemption by
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the Issuer, and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Issuer (other than in connection with the distribution of
Debentures to the Holders in exchange for Preferred Securities as provided in
the Declaration), the lesser of (a) the aggregate of the liquidation amount and
all accrued and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent the Issuer shall have funds available therefor, and (b)
the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an Event of Default (as defined in the Indenture) has
occurred and is continuing, no Guarantee Payments under the Common Securities
Guarantee with respect to the Common Securities shall be made until the Holders
of Preferred Securities shall be paid in full the Guarantee Payments to which
they are entitled under this Preferred Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee or of any Affiliate of the Preferred Guarantee
Trustee.
"Indenture" means the Indenture dated as of December 17, 1996, among the
Guarantor (the "Debenture Issuer") and Wilmington Trust Company, as trustee, and
any indenture supplemental thereto pursuant to which certain subordinated debt
securities of the Debenture Issuer are to be issued to the Property Trustee of
the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or
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otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Preferred Securities.
"Officers' Certificate" means a certificate signed by the Chairman, a Vice
Chairman, a Vice President, the Chief Auditor, the Secretary or an Assistant
Secretary of the Guarantor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Preferred
Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
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"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee Trustee" means Wilmington Trust Company, a national
banking association duly organized and existing under the laws of the United
States, until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trust Securities" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts
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with the duties imposed by Section 310 to 317, inclusive, of the Trust Indenture
Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holders of the Preferred Securities ("List of
Holders") as of such date, (i) within one Business Day after January 1 and June
30 of each year, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Preferred Guarantee Trustee by the Guarantor. The
Preferred Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Preferred Guarantee 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 Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
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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 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall have
received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee
Trustee
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Preferred Securities,
and the Preferred Guarantee Trustee shall not transfer this Preferred Securities
Guarantee to any Person except a Holder of Preferred Securities exercising his
or her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Preferred Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to a Responsible Officer of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such
of the rights and powers vested in it by this Preferred Securities Guarantee,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
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(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants or obligations shall
be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee 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 Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee 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 the
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Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee 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 Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters 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 Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
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(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Preferred Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Guarantee 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 Preferred Guarantee Trustee; provided
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee 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 Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Preferred Securities Guarantee, both of which shall
be conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action
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hereunder, the Preferred Guarantee Trustee (i) may request instructions
from the Holders of a Majority in liquidation amount of the Preferred
Securities, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall be
fully and conclusively protected in relying on or acting in accordance
with such instructions.
(xi) The Preferred Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee 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
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
SECTION 3.4 Compensation and Reimbursement
The Guarantor agrees:
(a) To pay the Preferred Guarantee Trustee from time to time such
reasonable compensation as the Guarantor and the Preferred Guarantee Trustee
shall from time to time agree in writing for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); and
(b) Except as otherwise expressly provided herein, to reimburse the
Preferred Guarantee Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Preferred Guarantee Trustee
in accordance with the provisions of this Preferred Securities Guarantee
(including the reasonable compensation and expenses of its agents and counsel),
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except any such expense, disbursement or advance that may be attributable to its
negligence or bad faith.
The provisions of this Section shall survive the termination of this
Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(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 Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
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SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustee
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except during an
event of default.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or until
its removal or resignation. The Preferred Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of removal or resignation, the Preferred Guarantee
Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued to
the date of such termination, removal or resignation.
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(g) The Guarantor shall give notice of each resignation and each removal
of the Preferred Guarantee Trustee and each appointment of a Successor Preferred
Guarantee Trustee to all Holders in the manner provided in Section 9.3 hereof.
Each notice shall include the name of the Successor Preferred Guarantee Trustee
and the address of its corporate trust office.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption
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Price, Liquidation Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or to direct the exercise of any
trust or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce such Preferred
Securities Guarantee, any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. Notwithstanding the foregoing, if the
Company has failed to make
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a guarantee payment, a holder of Preferred Securities may directly institute a
proceeding against the Company for enforcement of the Preferred Securities
Guarantee for such payment. The Guarantor waives any right or remedy to require
that any action be brought first against the Issuer or any other person or
entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Preferred Securities Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Preferred Securities Guarantee, if, at the time
of any such payment, any amounts are due and unpaid under this Preferred
Securities Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default or an event of default under the Declaration
or the Guarantor has exercised its option to defer interest payments on the
Debentures, then (a) the Guarantor shall not declare or pay any dividends on,
make any distribution with respect to, or redeem, purchase, acquire for
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value or make a liquidation payment with respect to any of its capital stock
(other than (i) purchases or acquisitions of shares of Common Stock in
connection with the satisfaction by the Guarantor of its obligations under any
employee benefit plans or other contractual obligations (other than a
contractual obligation ranking pari passu with or junior in right of payment to
the Debentures) entered into prior to the date of issuance of the Debentures,
(ii) as a result of a reclassification of the Guarantor's capital stock or the
exchange or conversion of one class or series of the Guarantor's capital stock
for another class or series of the Guarantor's capital stock or (iii) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock of the
Guarantor or the security being converted or exchanged) and (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Guarantor that
rank pari passu with or junior in right of payment to the Debentures.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate (i) upon full payment
of the Redemption Price of all Preferred Securities, (ii) upon the distribution
of the Debentures to the Holders of all of the Preferred Securities or (iii)
upon full payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Preferred Securities must restore
payment of any sums paid under the Preferred Securities or under this Preferred
Securities Guarantee.
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Preferred Securities
Guarantee 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
Preferred Securities Guarantee 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 negligence or willful misconduct with respect to such acts
or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, 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 Preferred Securities might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any and all loss, liability, damage,
claim or expense incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The obligation to indemnify as set forth in this Section 8.2
shall survive the termination of this Preferred Securities Guarantee.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
This Preferred Securities Guarantee may be amended only by an instrument
in writing signed by the Guarantor, provided that, except with respect to any
changes that do not adversely affect the rights of Holders (in which case no
consent of Holders will be required), this Preferred Securities Guarantee may
only be amended with the prior approval of the Holders of at least a Majority in
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all the
outstanding Preferred Securities; and provided, further, that no amendment that
affects the rights, powers, duties, obligations or immunities of the Preferred
Guarantee Trustee shall be effective unless approved in writing by the Preferred
Guarantee Trustee. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders of the Securities apply to the giving of such
approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
Wilmington Trust Company
Rodney Square North
9th Floor
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee
Administration
Telecopy: (302) 651-8882
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(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
Citibank, N.A.
Office of Corporate Finance
153 East 53rd Street, 6th floor
New York, New York 10043
Attention: Gregory C. Ehlke, Vice President
Telecopy: (212) 527-2765
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
CITICORP, as Guarantor
By:_________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as
Preferred Guarantee Trustee
By:_________________________
Name:
Title:
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PREFERRED SECURITIES GUARANTEE AGREEMENT
Citicorp Capital XII
Dated as of ___________________, 199__
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Page
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation................. 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............... 5
SECTION 2.2 Lists of Holders of Securities................. 6
SECTION 2.3 Reports by the Preferred Guarantee
Trustee........................................ 6
SECTION 2.4 Periodic Reports to Preferred Guarantee
Trustee........................................ 6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent...................................... 6
SECTION 2.6 Events of Default; Waiver...................... 7
SECTION 2.7 Event of Default; Notice....................... 7
SECTION 2.8 Conflicting Interests.......................... 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred
Guarantee Trustee.............................. 8
SECTION 3.2 Certain Rights of Preferred Guarantee
Trustee........................................ 10
SECTION 3.3 Not Responsible for Recitals or Issuance
of Preferred Securities Guarantee.............. 12
SECTION 3.4 Compensation and Reimbursement................. 12
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility....... 13
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustee.................... 14
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Page
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee...................................... 15
SECTION 5.2 Waiver of Notice and Demand.................... 15
SECTION 5.3 Obligations Not Affected....................... 15
SECTION 5.4 Rights of Holders.............................. 16
SECTION 5.5 Guarantee of Payment........................... 17
SECTION 5.6 Subrogation.................................... 17
SECTION 5.7 Independent Obligations........................ 17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions..................... 17
SECTION 6.2 Ranking........................................ 18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.................................... 18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.................................... 19
SECTION 8.2 Indemnification................................ 19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns......................... 20
SECTION 9.2 Amendments..................................... 20
SECTION 9.3 Notices........................................ 20
SECTION 9.4 Benefit........................................ 21
SECTION 9.5 Governing Law.................................. 21
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of _______________________, is executed and delivered by Citicorp, a Delaware
corporation (the "Guarantor"), and Wilmington Trust Company, a national banking
association duly organized and existing under the laws of the United States, as
trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of Citicorp Capital XII, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of_____________________, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof _____________ preferred securities, having an
aggregate liquidation amount of $______________, designated the ______%
Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to acquire the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
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NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee has
the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the context
otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
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"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a day on which federal or state
banking institutions in the Borough of Manhattan, The City of New York, are
authorized or obligated by law, executive order or regulation to close.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 101 Barclay Street, 21 West,
New York, New York 10286.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities of
the Guarantor designated the_______% Junior Subordinated Deferrable Interest
Debentures due ___ 15, ____ held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Preferred Securities to
the extent the Issuer shall have funds available therefor, (ii) the redemption
price, including all accrued and unpaid Distributions to the date of redemption
(the "Redemption Price") to the extent the Issuer has funds available therefor,
with respect to any Preferred Securities called for redemption by
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the Issuer, and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Issuer (other than in connection with the distribution of
Debentures to the Holders in exchange for Preferred Securities as provided in
the Declaration), the lesser of (a) the aggregate of the liquidation amount and
all accrued and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent the Issuer shall have funds available therefor, and (b)
the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an Event of Default (as defined in the Indenture) has
occurred and is continuing, no Guarantee Payments under the Common Securities
Guarantee with respect to the Common Securities shall be made until the Holders
of Preferred Securities shall be paid in full the Guarantee Payments to which
they are entitled under this Preferred Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee or of any Affiliate of the Preferred Guarantee
Trustee.
"Indenture" means the Indenture dated as of December 17, 1996, among the
Guarantor (the "Debenture Issuer") and Wilmington Trust Company, as trustee, and
any indenture supplemental thereto pursuant to which certain subordinated debt
securities of the Debenture Issuer are to be issued to the Property Trustee of
the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or
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otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Preferred Securities.
"Officers' Certificate" means a certificate signed by the Chairman, a Vice
Chairman, a Vice President, the Chief Auditor, the Secretary or an Assistant
Secretary of the Guarantor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Preferred
Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
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"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee Trustee" means Wilmington Trust Company, a national
banking association duly organized and existing under the laws of the United
States, until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trust Securities" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts
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with the duties imposed by Section 310 to 317, inclusive, of the Trust Indenture
Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holders of the Preferred Securities ("List of
Holders") as of such date, (i) within one Business Day after January 1 and June
30 of each year, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Preferred Guarantee Trustee by the Guarantor. The
Preferred Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Preferred Guarantee 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 Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
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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 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall have
received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee
Trustee
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Preferred Securities,
and the Preferred Guarantee Trustee shall not transfer this Preferred Securities
Guarantee to any Person except a Holder of Preferred Securities exercising his
or her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Preferred Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to a Responsible Officer of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such
of the rights and powers vested in it by this Preferred Securities Guarantee,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
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(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants or obligations shall
be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee 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 Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee 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 the
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Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee 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 Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters 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 Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
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(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Preferred Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Guarantee 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 Preferred Guarantee Trustee; provided
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee 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 Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Preferred Securities Guarantee, both of which shall
be conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action
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hereunder, the Preferred Guarantee Trustee (i) may request instructions
from the Holders of a Majority in liquidation amount of the Preferred
Securities, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall be
fully and conclusively protected in relying on or acting in accordance
with such instructions.
(xi) The Preferred Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee 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
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
SECTION 3.4 Compensation and Reimbursement
The Guarantor agrees:
(a) To pay the Preferred Guarantee Trustee from time to time such
reasonable compensation as the Guarantor and the Preferred Guarantee Trustee
shall from time to time agree in writing for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); and
(b) Except as otherwise expressly provided herein, to reimburse the
Preferred Guarantee Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Preferred Guarantee Trustee
in accordance with the provisions of this Preferred Securities Guarantee
(including the reasonable compensation and expenses of its agents and counsel),
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except any such expense, disbursement or advance that may be attributable to its
negligence or bad faith.
The provisions of this Section shall survive the termination of this
Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(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 Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
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SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustee
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except during an
event of default.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or until
its removal or resignation. The Preferred Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of removal or resignation, the Preferred Guarantee
Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued to
the date of such termination, removal or resignation.
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(g) The Guarantor shall give notice of each resignation and each removal
of the Preferred Guarantee Trustee and each appointment of a Successor Preferred
Guarantee Trustee to all Holders in the manner provided in Section 9.3 hereof.
Each notice shall include the name of the Successor Preferred Guarantee Trustee
and the address of its corporate trust office.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption
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Price, Liquidation Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or to direct the exercise of any
trust or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce such Preferred
Securities Guarantee, any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. Notwithstanding the foregoing, if the
Company has failed to make
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a guarantee payment, a holder of Preferred Securities may directly institute a
proceeding against the Company for enforcement of the Preferred Securities
Guarantee for such payment. The Guarantor waives any right or remedy to require
that any action be brought first against the Issuer or any other person or
entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Preferred Securities Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Preferred Securities Guarantee, if, at the time
of any such payment, any amounts are due and unpaid under this Preferred
Securities Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default or an event of default under the Declaration
or the Guarantor has exercised its option to defer interest payments on the
Debentures, then (a) the Guarantor shall not declare or pay any dividends on,
make any distribution with respect to, or redeem, purchase, acquire for
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value or make a liquidation payment with respect to any of its capital stock
(other than (i) purchases or acquisitions of shares of Common Stock in
connection with the satisfaction by the Guarantor of its obligations under any
employee benefit plans or other contractual obligations (other than a
contractual obligation ranking pari passu with or junior in right of payment to
the Debentures) entered into prior to the date of issuance of the Debentures,
(ii) as a result of a reclassification of the Guarantor's capital stock or the
exchange or conversion of one class or series of the Guarantor's capital stock
for another class or series of the Guarantor's capital stock or (iii) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock of the
Guarantor or the security being converted or exchanged) and (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Guarantor that
rank pari passu with or junior in right of payment to the Debentures.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate (i) upon full payment
of the Redemption Price of all Preferred Securities, (ii) upon the distribution
of the Debentures to the Holders of all of the Preferred Securities or (iii)
upon full payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Preferred Securities must restore
payment of any sums paid under the Preferred Securities or under this Preferred
Securities Guarantee.
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Preferred Securities
Guarantee 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
Preferred Securities Guarantee 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 negligence or willful misconduct with respect to such acts
or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, 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 Preferred Securities might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any and all loss, liability, damage,
claim or expense incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The obligation to indemnify as set forth in this Section 8.2
shall survive the termination of this Preferred Securities Guarantee.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
This Preferred Securities Guarantee may be amended only by an instrument
in writing signed by the Guarantor, provided that, except with respect to any
changes that do not adversely affect the rights of Holders (in which case no
consent of Holders will be required), this Preferred Securities Guarantee may
only be amended with the prior approval of the Holders of at least a Majority in
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all the
outstanding Preferred Securities; and provided, further, that no amendment that
affects the rights, powers, duties, obligations or immunities of the Preferred
Guarantee Trustee shall be effective unless approved in writing by the Preferred
Guarantee Trustee. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders of the Securities apply to the giving of such
approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
Wilmington Trust Company
Rodney Square North
9th Floor
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee
Administration
Telecopy: (302) 651-8882
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(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
Citibank, N.A.
Office of Corporate Finance
153 East 53rd Street, 6th floor
New York, New York 10043
Attention: Gregory C. Ehlke, Vice President
Telecopy: (212) 527-2765
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
CITICORP, as Guarantor
By:_________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as
Preferred Guarantee Trustee
By:_________________________
Name:
Title:
23
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PREFERRED SECURITIES GUARANTEE AGREEMENT
Citicorp Capital XIII
Dated as of ___________________, 199__
====================================
<PAGE>
Page
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation................. 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............... 5
SECTION 2.2 Lists of Holders of Securities................. 6
SECTION 2.3 Reports by the Preferred Guarantee
Trustee........................................ 6
SECTION 2.4 Periodic Reports to Preferred Guarantee
Trustee........................................ 6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent...................................... 6
SECTION 2.6 Events of Default; Waiver...................... 7
SECTION 2.7 Event of Default; Notice....................... 7
SECTION 2.8 Conflicting Interests.......................... 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred
Guarantee Trustee.............................. 8
SECTION 3.2 Certain Rights of Preferred Guarantee
Trustee........................................ 10
SECTION 3.3 Not Responsible for Recitals or Issuance
of Preferred Securities Guarantee.............. 12
SECTION 3.4 Compensation and Reimbursement................. 12
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility....... 13
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustee.................... 14
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Page
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee...................................... 15
SECTION 5.2 Waiver of Notice and Demand.................... 15
SECTION 5.3 Obligations Not Affected....................... 15
SECTION 5.4 Rights of Holders.............................. 16
SECTION 5.5 Guarantee of Payment........................... 17
SECTION 5.6 Subrogation.................................... 17
SECTION 5.7 Independent Obligations........................ 17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions..................... 17
SECTION 6.2 Ranking........................................ 18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.................................... 18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.................................... 19
SECTION 8.2 Indemnification................................ 19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns......................... 20
SECTION 9.2 Amendments..................................... 20
SECTION 9.3 Notices........................................ 20
SECTION 9.4 Benefit........................................ 21
SECTION 9.5 Governing Law.................................. 21
ii
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of _______________________, is executed and delivered by Citicorp, a Delaware
corporation (the "Guarantor"), and Wilmington Trust Company, a national banking
association duly organized and existing under the laws of the United States, as
trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of Citicorp Capital XIII, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of_____________________, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof _____________ preferred securities, having an
aggregate liquidation amount of $______________, designated the ______%
Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to acquire the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
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NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee has
the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the context
otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
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"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a day on which federal or state
banking institutions in the Borough of Manhattan, The City of New York, are
authorized or obligated by law, executive order or regulation to close.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 101 Barclay Street, 21 West,
New York, New York 10286.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities of
the Guarantor designated the_______% Junior Subordinated Deferrable Interest
Debentures due ___ 15, ____ held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Preferred Securities to
the extent the Issuer shall have funds available therefor, (ii) the redemption
price, including all accrued and unpaid Distributions to the date of redemption
(the "Redemption Price") to the extent the Issuer has funds available therefor,
with respect to any Preferred Securities called for redemption by
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the Issuer, and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Issuer (other than in connection with the distribution of
Debentures to the Holders in exchange for Preferred Securities as provided in
the Declaration), the lesser of (a) the aggregate of the liquidation amount and
all accrued and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent the Issuer shall have funds available therefor, and (b)
the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an Event of Default (as defined in the Indenture) has
occurred and is continuing, no Guarantee Payments under the Common Securities
Guarantee with respect to the Common Securities shall be made until the Holders
of Preferred Securities shall be paid in full the Guarantee Payments to which
they are entitled under this Preferred Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee or of any Affiliate of the Preferred Guarantee
Trustee.
"Indenture" means the Indenture dated as of December 17, 1996, among the
Guarantor (the "Debenture Issuer") and Wilmington Trust Company, as trustee, and
any indenture supplemental thereto pursuant to which certain subordinated debt
securities of the Debenture Issuer are to be issued to the Property Trustee of
the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or
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otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Preferred Securities.
"Officers' Certificate" means a certificate signed by the Chairman, a Vice
Chairman, a Vice President, the Chief Auditor, the Secretary or an Assistant
Secretary of the Guarantor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Preferred
Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
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"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee Trustee" means Wilmington Trust Company, a national
banking association duly organized and existing under the laws of the United
States, until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trust Securities" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts
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with the duties imposed by Section 310 to 317, inclusive, of the Trust Indenture
Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holders of the Preferred Securities ("List of
Holders") as of such date, (i) within one Business Day after January 1 and June
30 of each year, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Preferred Guarantee Trustee by the Guarantor. The
Preferred Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Preferred Guarantee 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 Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
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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 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall have
received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee
Trustee
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Preferred Securities,
and the Preferred Guarantee Trustee shall not transfer this Preferred Securities
Guarantee to any Person except a Holder of Preferred Securities exercising his
or her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Preferred Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to a Responsible Officer of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such
of the rights and powers vested in it by this Preferred Securities Guarantee,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
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(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants or obligations shall
be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee 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 Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee 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 the
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Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee 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 Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters 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 Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
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(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Preferred Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Guarantee 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 Preferred Guarantee Trustee; provided
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee 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 Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Preferred Securities Guarantee, both of which shall
be conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action
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hereunder, the Preferred Guarantee Trustee (i) may request instructions
from the Holders of a Majority in liquidation amount of the Preferred
Securities, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall be
fully and conclusively protected in relying on or acting in accordance
with such instructions.
(xi) The Preferred Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee 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
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
SECTION 3.4 Compensation and Reimbursement
The Guarantor agrees:
(a) To pay the Preferred Guarantee Trustee from time to time such
reasonable compensation as the Guarantor and the Preferred Guarantee Trustee
shall from time to time agree in writing for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); and
(b) Except as otherwise expressly provided herein, to reimburse the
Preferred Guarantee Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Preferred Guarantee Trustee
in accordance with the provisions of this Preferred Securities Guarantee
(including the reasonable compensation and expenses of its agents and counsel),
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except any such expense, disbursement or advance that may be attributable to its
negligence or bad faith.
The provisions of this Section shall survive the termination of this
Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(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 Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
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SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustee
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except during an
event of default.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or until
its removal or resignation. The Preferred Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of removal or resignation, the Preferred Guarantee
Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued to
the date of such termination, removal or resignation.
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(g) The Guarantor shall give notice of each resignation and each removal
of the Preferred Guarantee Trustee and each appointment of a Successor Preferred
Guarantee Trustee to all Holders in the manner provided in Section 9.3 hereof.
Each notice shall include the name of the Successor Preferred Guarantee Trustee
and the address of its corporate trust office.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption
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Price, Liquidation Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or to direct the exercise of any
trust or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce such Preferred
Securities Guarantee, any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. Notwithstanding the foregoing, if the
Company has failed to make
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a guarantee payment, a holder of Preferred Securities may directly institute a
proceeding against the Company for enforcement of the Preferred Securities
Guarantee for such payment. The Guarantor waives any right or remedy to require
that any action be brought first against the Issuer or any other person or
entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Preferred Securities Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Preferred Securities Guarantee, if, at the time
of any such payment, any amounts are due and unpaid under this Preferred
Securities Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default or an event of default under the Declaration
or the Guarantor has exercised its option to defer interest payments on the
Debentures, then (a) the Guarantor shall not declare or pay any dividends on,
make any distribution with respect to, or redeem, purchase, acquire for
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value or make a liquidation payment with respect to any of its capital stock
(other than (i) purchases or acquisitions of shares of Common Stock in
connection with the satisfaction by the Guarantor of its obligations under any
employee benefit plans or other contractual obligations (other than a
contractual obligation ranking pari passu with or junior in right of payment to
the Debentures) entered into prior to the date of issuance of the Debentures,
(ii) as a result of a reclassification of the Guarantor's capital stock or the
exchange or conversion of one class or series of the Guarantor's capital stock
for another class or series of the Guarantor's capital stock or (iii) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock of the
Guarantor or the security being converted or exchanged) and (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Guarantor that
rank pari passu with or junior in right of payment to the Debentures.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate (i) upon full payment
of the Redemption Price of all Preferred Securities, (ii) upon the distribution
of the Debentures to the Holders of all of the Preferred Securities or (iii)
upon full payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Preferred Securities must restore
payment of any sums paid under the Preferred Securities or under this Preferred
Securities Guarantee.
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Preferred Securities
Guarantee 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
Preferred Securities Guarantee 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 negligence or willful misconduct with respect to such acts
or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, 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 Preferred Securities might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any and all loss, liability, damage,
claim or expense incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The obligation to indemnify as set forth in this Section 8.2
shall survive the termination of this Preferred Securities Guarantee.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
This Preferred Securities Guarantee may be amended only by an instrument
in writing signed by the Guarantor, provided that, except with respect to any
changes that do not adversely affect the rights of Holders (in which case no
consent of Holders will be required), this Preferred Securities Guarantee may
only be amended with the prior approval of the Holders of at least a Majority in
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all the
outstanding Preferred Securities; and provided, further, that no amendment that
affects the rights, powers, duties, obligations or immunities of the Preferred
Guarantee Trustee shall be effective unless approved in writing by the Preferred
Guarantee Trustee. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders of the Securities apply to the giving of such
approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
Wilmington Trust Company
Rodney Square North
9th Floor
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee
Administration
Telecopy: (302) 651-8882
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(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
Citibank, N.A.
Office of Corporate Finance
153 East 53rd Street, 6th floor
New York, New York 10043
Attention: Gregory C. Ehlke, Vice President
Telecopy: (212) 527-2765
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
CITICORP, as Guarantor
By:_________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as
Preferred Guarantee Trustee
By:_________________________
Name:
Title:
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PREFERRED SECURITIES GUARANTEE AGREEMENT
Citicorp Capital XIV
Dated as of ___________________, 199__
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation................. 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............... 5
SECTION 2.2 Lists of Holders of Securities................. 6
SECTION 2.3 Reports by the Preferred Guarantee
Trustee........................................ 6
SECTION 2.4 Periodic Reports to Preferred Guarantee
Trustee........................................ 6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent...................................... 6
SECTION 2.6 Events of Default; Waiver...................... 7
SECTION 2.7 Event of Default; Notice....................... 7
SECTION 2.8 Conflicting Interests.......................... 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred
Guarantee Trustee.............................. 8
SECTION 3.2 Certain Rights of Preferred Guarantee
Trustee........................................ 10
SECTION 3.3 Not Responsible for Recitals or Issuance
of Preferred Securities Guarantee.............. 12
SECTION 3.4 Compensation and Reimbursement................. 12
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility....... 13
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustee.................... 14
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ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee...................................... 15
SECTION 5.2 Waiver of Notice and Demand.................... 15
SECTION 5.3 Obligations Not Affected....................... 15
SECTION 5.4 Rights of Holders.............................. 16
SECTION 5.5 Guarantee of Payment........................... 17
SECTION 5.6 Subrogation.................................... 17
SECTION 5.7 Independent Obligations........................ 17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions..................... 17
SECTION 6.2 Ranking........................................ 18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.................................... 18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.................................... 19
SECTION 8.2 Indemnification................................ 19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns......................... 20
SECTION 9.2 Amendments..................................... 20
SECTION 9.3 Notices........................................ 20
SECTION 9.4 Benefit........................................ 21
SECTION 9.5 Governing Law.................................. 21
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of _______________________, is executed and delivered by Citicorp, a Delaware
corporation (the "Guarantor"), and Wilmington Trust Company, a national banking
association duly organized and existing under the laws of the United States, as
trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of Citicorp Capital XIV, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of_____________________, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof _____________ preferred securities, having an
aggregate liquidation amount of $______________, designated the ______%
Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to acquire the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
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NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee has
the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the context
otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
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"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a day on which federal or state
banking institutions in the Borough of Manhattan, The City of New York, are
authorized or obligated by law, executive order or regulation to close.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 101 Barclay Street, 21 West,
New York, New York 10286.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities of
the Guarantor designated the_______% Junior Subordinated Deferrable Interest
Debentures due ___ 15, ____ held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Preferred Securities to
the extent the Issuer shall have funds available therefor, (ii) the redemption
price, including all accrued and unpaid Distributions to the date of redemption
(the "Redemption Price") to the extent the Issuer has funds available therefor,
with respect to any Preferred Securities called for redemption by
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the Issuer, and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Issuer (other than in connection with the distribution of
Debentures to the Holders in exchange for Preferred Securities as provided in
the Declaration), the lesser of (a) the aggregate of the liquidation amount and
all accrued and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent the Issuer shall have funds available therefor, and (b)
the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an Event of Default (as defined in the Indenture) has
occurred and is continuing, no Guarantee Payments under the Common Securities
Guarantee with respect to the Common Securities shall be made until the Holders
of Preferred Securities shall be paid in full the Guarantee Payments to which
they are entitled under this Preferred Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee or of any Affiliate of the Preferred Guarantee
Trustee.
"Indenture" means the Indenture dated as of December 17, 1996, among the
Guarantor (the "Debenture Issuer") and Wilmington Trust Company, as trustee, and
any indenture supplemental thereto pursuant to which certain subordinated debt
securities of the Debenture Issuer are to be issued to the Property Trustee of
the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or
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otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Preferred Securities.
"Officers' Certificate" means a certificate signed by the Chairman, a Vice
Chairman, a Vice President, the Chief Auditor, the Secretary or an Assistant
Secretary of the Guarantor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Preferred
Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
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"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee Trustee" means Wilmington Trust Company, a national
banking association duly organized and existing under the laws of the United
States, until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trust Securities" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts
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with the duties imposed by Section 310 to 317, inclusive, of the Trust Indenture
Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holders of the Preferred Securities ("List of
Holders") as of such date, (i) within one Business Day after January 1 and June
30 of each year, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Preferred Guarantee Trustee by the Guarantor. The
Preferred Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Preferred Guarantee 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 Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
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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 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall have
received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee
Trustee
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Preferred Securities,
and the Preferred Guarantee Trustee shall not transfer this Preferred Securities
Guarantee to any Person except a Holder of Preferred Securities exercising his
or her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Preferred Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to a Responsible Officer of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such
of the rights and powers vested in it by this Preferred Securities Guarantee,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
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(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants or obligations shall
be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee 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 Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee 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 the
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Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee 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 Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters 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 Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
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(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Preferred Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Guarantee 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 Preferred Guarantee Trustee; provided
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee 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 Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Preferred Securities Guarantee, both of which shall
be conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action
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hereunder, the Preferred Guarantee Trustee (i) may request instructions
from the Holders of a Majority in liquidation amount of the Preferred
Securities, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall be
fully and conclusively protected in relying on or acting in accordance
with such instructions.
(xi) The Preferred Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee 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
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
SECTION 3.4 Compensation and Reimbursement
The Guarantor agrees:
(a) To pay the Preferred Guarantee Trustee from time to time such
reasonable compensation as the Guarantor and the Preferred Guarantee Trustee
shall from time to time agree in writing for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); and
(b) Except as otherwise expressly provided herein, to reimburse the
Preferred Guarantee Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Preferred Guarantee Trustee
in accordance with the provisions of this Preferred Securities Guarantee
(including the reasonable compensation and expenses of its agents and counsel),
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except any such expense, disbursement or advance that may be attributable to its
negligence or bad faith.
The provisions of this Section shall survive the termination of this
Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(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 Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
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SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustee
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except during an
event of default.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or until
its removal or resignation. The Preferred Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of removal or resignation, the Preferred Guarantee
Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued to
the date of such termination, removal or resignation.
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(g) The Guarantor shall give notice of each resignation and each removal
of the Preferred Guarantee Trustee and each appointment of a Successor Preferred
Guarantee Trustee to all Holders in the manner provided in Section 9.3 hereof.
Each notice shall include the name of the Successor Preferred Guarantee Trustee
and the address of its corporate trust office.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption
16
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Price, Liquidation Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or to direct the exercise of any
trust or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce such Preferred
Securities Guarantee, any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. Notwithstanding the foregoing, if the
Company has failed to make
17
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a guarantee payment, a holder of Preferred Securities may directly institute a
proceeding against the Company for enforcement of the Preferred Securities
Guarantee for such payment. The Guarantor waives any right or remedy to require
that any action be brought first against the Issuer or any other person or
entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Preferred Securities Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Preferred Securities Guarantee, if, at the time
of any such payment, any amounts are due and unpaid under this Preferred
Securities Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default or an event of default under the Declaration
or the Guarantor has exercised its option to defer interest payments on the
Debentures, then (a) the Guarantor shall not declare or pay any dividends on,
make any distribution with respect to, or redeem, purchase, acquire for
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value or make a liquidation payment with respect to any of its capital stock
(other than (i) purchases or acquisitions of shares of Common Stock in
connection with the satisfaction by the Guarantor of its obligations under any
employee benefit plans or other contractual obligations (other than a
contractual obligation ranking pari passu with or junior in right of payment to
the Debentures) entered into prior to the date of issuance of the Debentures,
(ii) as a result of a reclassification of the Guarantor's capital stock or the
exchange or conversion of one class or series of the Guarantor's capital stock
for another class or series of the Guarantor's capital stock or (iii) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock of the
Guarantor or the security being converted or exchanged) and (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Guarantor that
rank pari passu with or junior in right of payment to the Debentures.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate (i) upon full payment
of the Redemption Price of all Preferred Securities, (ii) upon the distribution
of the Debentures to the Holders of all of the Preferred Securities or (iii)
upon full payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Preferred Securities must restore
payment of any sums paid under the Preferred Securities or under this Preferred
Securities Guarantee.
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Preferred Securities
Guarantee 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
Preferred Securities Guarantee 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 negligence or willful misconduct with respect to such acts
or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, 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 Preferred Securities might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any and all loss, liability, damage,
claim or expense incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The obligation to indemnify as set forth in this Section 8.2
shall survive the termination of this Preferred Securities Guarantee.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
This Preferred Securities Guarantee may be amended only by an instrument
in writing signed by the Guarantor, provided that, except with respect to any
changes that do not adversely affect the rights of Holders (in which case no
consent of Holders will be required), this Preferred Securities Guarantee may
only be amended with the prior approval of the Holders of at least a Majority in
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all the
outstanding Preferred Securities; and provided, further, that no amendment that
affects the rights, powers, duties, obligations or immunities of the Preferred
Guarantee Trustee shall be effective unless approved in writing by the Preferred
Guarantee Trustee. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders of the Securities apply to the giving of such
approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
Wilmington Trust Company
Rodney Square North
9th Floor
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee
Administration
Telecopy: (302) 651-8882
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(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
Citibank, N.A.
Office of Corporate Finance
153 East 53rd Street, 6th floor
New York, New York 10043
Attention: Gregory C. Ehlke, Vice President
Telecopy: (212) 527-2765
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
CITICORP, as Guarantor
By:_________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as
Preferred Guarantee Trustee
By:_________________________
Name:
Title:
23
January 27, 1998
Citicorp
399 Park Avenue
New York, NY 10043
Ladies and Gentlemen:
This opinion is being provided by the undersigned, as an Associate General
Counsel of Citibank, N.A. I have acted as counsel to Citicorp in connection with
the filing with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), of a
Pre-Effective Amendment No. 2 on Form S-3 to the Registration Statement on Form
S-4, File No. 333- 21143, which also constitutes Post-Effective Amendment No. 1
to the Registration Statement on Form S-3, File No. 333-32065 (together, the
"Registration Statement"), for the purpose of registering under the Securities
Act Citicorp's common stock, par value $1.00 per share ("Common Stock"), series
of preferred stock ("Preferred Stock"), which may be issuable in the form of
depositary receipts representing depositary shares ("Depositary Shares"), series
of notes, which may be issued as senior notes, subordinated notes or junior
subordinated notes (the "Notes"), warrants (the "Warrants"), guarantees of
capital securities of certain trusts (the "Guarantees") and certain other
securities.
I or attorneys under my supervision have examined originals or copies, certified
or otherwise identified to my satisfaction, of such corporate records of
Citicorp and other documents, agreements and instruments, and have made such
investigations of law, as I have deemed appropriate as a basis for the opinions
expressed below. In arriving at the opinions expressed below, I have assumed
that the signatures on all documents that I have examined are genuine.
On the basis of the foregoing, I am of the opinion that, when the Registration
Statement has been filed and has become effective under the Securities Act:
(1) When shares of Common Stock or Preferred Stock or Depositary Shares have
been duly issued and sold in the manner contemplated by the Registration
Statement (including upon exercise of any Warrant or the conversion of any
Note or share of Preferred Stock), such shares will be legally issued,
fully paid and non-assessable and the Depositary Shares so issued will be
entitled to the rights under, and the benefits of, the deposit agreement
under which they have been issued.
(2) When the Notes have been duly issued and sold in the manner contemplated
by the Registration Statement (including upon exercise of any Warrant),
and assuming due authentication thereof by the trustee or by the
authenticating agent, if any, in accordance with
<PAGE>
Citicorp
Page 2
July 22, 1997
the provisions of the indenture under which such Notes have been issued,
the Notes will constitute valid and legally binding obligations of
Citicorp, enforceable in accordance with their terms, subject, as to
enforceability, to bankruptcy, insolvency, reorganization and other
similar laws relating to or affecting creditors' rights generally and to
general equity principles.
(3) When the Warrants have been duly issued and sold in the manner
contemplated by the Registration Statement, and assuming due
countersignature thereof by the warrant agent in accordance with the
provisions of the applicable warrant agreement, the Warrants will
constitute valid and legally binding obligations of Citicorp, enforceable
in accordance with their terms, subject, as to enforceability, to
bankruptcy, insolvency, reorganization and other similar laws relating to
or affecting creditors' rights generally and to general equity principles.
(4) When the Guarantees have been duly issued and delivered in the manner
contemplated by the Registration Statement, the Guarantees will constitute
valid and legally binding obligations of Citicorp, enforceable in
accordance with their terms, subject, as to enforceability, to bankruptcy,
insolvency, reorganization and other similar laws relating to or affecting
creditors' rights generally and to general equity principles.
The opinions expressed herein are limited to the laws of the State of New York,
the General Corporation Law of the State of Delaware and the federal laws of the
United States of America.
I hereby consent to the use and filing of this opinion as an exhibit to the
Registration Statement and to the reference to this opinion under the heading
"Validity of Securities" in any prospectus filed in connection with the
Registration Statement. In giving such consent, I do not thereby admit that I
come within the category of persons whose consent is required under Section 7 of
the Securities Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Stephen E. Dietz
[Letterhead of Morris, Nichols, Arsht & Tunnell]
January 28, 1998
The Citicorp Trusts
(as defined below)
c/o Citicorp
399 Park Avenue
New York, New York 10043
Re: The Citicorp Trusts (as defined below)
--------------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel to Citicorp Capital III,
Citicorp Capital IV, Citicorp Capital V, Citicorp Capital VI, Citicorp Capital
VII, Citicorp Capital VIII, Citicorp Capital IX, Citicorp Capital X, Citicorp
Capital XI, Citicorp Capital XII, Citicorp Capital XIII, and Citicorp Capital
XIV, each a Delaware statutory business trust (collectively referred to herein
as the "Citicorp Trusts" and each individually as a "Citicorp Trust"), in
connection with certain matters relating to the creation of the Citicorp Trusts
and the proposed issuance of Preferred Securities therein to beneficial owners
pursuant to and as described in Pre-Effective Amendment No. 2 on Form S-3 to
Registration Statement No.333-21143 (and the Prospectus forming a part thereof)
on Form S-4 filed with the Securities and Exchange Commission (the "Commission")
on February 5, 1997, which also constitutes Post-Effective Amendment No. 1 to
Registration Statement No. 333-32065 (and Prospectus forming a part thereof) on
Form S-3 (the "Form S-3 Registration Statement") filed with the Commission on
July 25, 1997 (collectively, the "Registration Statment"). Capitalized terms
used herein and not otherwise herein defined are used as defined the form of
Amended and Restated Declaration of Trust attached as an exhibit to the Form S-3
Registration Statement.
In rendering this opinion, we have examined copies of the following
documents in the forms provided to us: the Certificate of Trust of Citicorp
Capital III and Citicorp Capital IV, each as filed in the Office of the
Secretary of State of Delaware (the "State Office") on October 25, 1996, the
Certificates of Trust of Citicorp Capital V, Citicorp Capital VI, Citicorp
Capital VII, Citicorp Capital VIII and Citicorp Capital IX, each as filed in the
State Office on January 23, 1997,
<PAGE>
The Citicorp Trusts
c/o Citicorp
January 28, 1998
Page 2
and the Certificate of Trust of each other Citicorp Trust, each as filed in the
State Office on January 30, 1997 (the Certificate of Trust of each Citicorp
Trust is referred to herein as a "Certificate"); the Declaration of Trust of
Citicorp Capital III and Citicorp Capital IV, each dated as of October 25, 1996,
the Declaration of Trust of Citicorp Capital V, Citicorp Capital VI, Citicorp
Capital VII, Citicorp Capital VIII and Citicorp Capital IX, each dated as of
January 21, 1996 and the Declaration of Trust of each other Citicorp Trust, each
dated as of January 27, 1997 (the Declaration of Trust of each Citicorp Trust is
referred to herein as an "Original Governing Instrument"); the Indenture dated
as of December 17, 1996 between Citicorp and Wilmington Trust Company, as
Trustee, and the form of Supplemental Indenture to be entered into in connection
therewith; the form of Preferred Securities Guarantee to be made by Citicorp
with respect to each Citicorp Trust; and the Registration Statement. In such
examinations, we have assumed the genuineness of all signatures, the conformity
to original documents of all documents submitted to us as drafts or copies or
forms of documents to be executed and the legal capacity of natural persons to
complete the execution of documents. We have further assumed for purposes of
this opinion: (i) the due information, organization or creation, valid existence
and good standing of the Citicorp Trusts and each entity that is a party to any
of the documents reviewed by us under the laws of the jurisdiction of its
respective formation, organization or creation; (ii) the due authorization,
execution and delivery by, or on behalf of, each of the parties thereto of the
above referenced documents with respect to each Citicorp Trust; (iii) that
Citicorp, Wilmington Trust Company and the appropriate Regular Trustees will
duly authorize, execute and deliver an amended and restated declaration of trust
for each Citicorp Trust in the form of the Amended and Restated Declaration of
Trust Attached as an exhibit to the Form S-3 Registration Statement (each a
"Governing Instrument") and all other documents contemplated thereby or by the
Registration Statement to be executed in connection with the creation of each
Citicorp Trust and the issuance by each such Citicorp Trust of Preferred
Securities, in each case prior to the first issuance of Preferred Securities;
(iv) that the Preferred Securities of each Citicorp Trust will be offered and
sold pursuant to a prospectus and prospectus supplement thereto (collectively,
the "Prospectus") forming a part of the Registration Statement that will be
consistent with, and accurately describe, the terms of the applicable Governing
Instrument and Preferred Securities Guarantee relating to each such Citicorp
Trust and all other relevant documents; (v) that no event has or will occur
subsequent to the filing of any Certificate that would cause a dissolution or
liquidation of any Citicorp Trust under the applicable Original Governing
Instrument or the applicable Governing Instrument; (vi) that the activities of
each Citicorp Trust have been and will be conducted in accordance with its
Original Governing Instrument or Governing Instrument, as applicable, and the
Delaware Business Trust Act, 12 Del. C. Section 3801 et seq. (The "Delaware
Act"); (vii) that each Holder of Preferred Securities of each Citicorp Trust
will make payment of the required consideration therefor and receive a Preferred
Securities Certificate in consideration thereof in accordance with the terms and
conditions of the applicable Governing Instrument and as described in the
Prospectus, and that the Preferred Securities of each Citicorp Trust are
otherwise issued and sold to the Preferred Securities Holders of such Citicorp
Trust in accordance with the terms, conditions, requirements and
<PAGE>
The Citicorp Trusts
c/o Citicorp
January 28, 1998
Page 3
procedures set forth in the applicable Governing Instrument and as described in
the Prospectus; and (viii) that the documents examined by us, or contemplated
hereby, express the entire understanding of the parties thereto with respect to
the subject matter thereof and have not been, and, prior to the issuance of
Preferred Securities by each Citicorp Trust, will not be, modified, supplemented
or otherwise amended, except as herein referenced. No opinion is expressed with
respect to the requirements of, or compliance with, federal or state securities
or blue sky laws. Further, we express no opinion with respect to the
Registration Statement or any other offering materials relating to the Preferred
Securities offered by any Citicorp Trust and we assume no responsibility for
their contents. As to any fact material to our opinion, other than those
assumed, we have relied without independent investigation on the above
referenced documents and on the accuracy, as of the date hereof, of the matters
therein contained.
Based on and subject to the foregoing, and limited in all respects
to matters of Delaware law, it is our opinion that, upon issuance, the Preferred
Securities of each Citicorp Trust will constitute validly issued and, subject to
the terms of the applicable Governing Instrument, fully paid and non-assessable
beneficial interests in the assets of such Citicorp Trust. We note that pursuant
to the Governing Instrument, each Citicorp Trust may withhold amounts otherwise
distributable to a Holder of Securities in such Citicorp Trust and pay over such
amounts to the applicable jurisdictions in accordance with federal, state and
local law and any amounts withheld will be deemed to have been distributed to
such Holder and that, pursuant to the Governing Instrument, the Preferred
Security Holders of each Citicorp Trust may be obligated to make payments or
provide indemnity or security under the circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "VALIDITY OF
SECURITIES" in the Prospectus forming a part thereof. In giving this consent, we
do not thereby admit that we come within the category of persons whose consent
is required under Section 7 of the Securities Act of 1933, as amended, or the
rules and regulations of the Commission thereunder. This opinion speaks only as
of the date hereof and is based on our understandings and assumptions as to
present facts, and our review of the above referenced documents and the
application of Delaware law as the same exist on the date hereof, and we
undertake no obligation to update or supplement this opinion after the date
hereof for the benefit of any person or entity with respect to any facts or
circumstances that may hereafter come to our attention or any changes in facts
or law that may hereafter occur or take effect. This opinion is intended solely
for the benefit of the addressees hereof in connection with the matters
contemplated hereby and may not be relied upon by any other person or entity or
for any other purpose without our prior written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
The Board of Directors
Citicorp:
We consent to the incoporation by reference of our report dated January 27, 1997
relating to the consolidated balance sheets of Citicorp and subsidiaries as of
December 31, 1996 and 1995, the related consolidated statements of income,
changes in stockholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1996, and the related consolidated balance
sheets of Citibank, N.A. and subsidiaries as of December 31, 1996 and 1995, in
the Registration Statement on Form S-3, and to the reference to our firm under
the heading "Experts" in the Registration Statement. Our report with respect to
these consolidated financial statements, which contains an added explanatory
paragraph, is included in the 1996 Citicorp Annual Report and Form 10-K.
/S/ KPMG Peat Marwick LLP
New York, New York
Jnauary 28, 1998
