SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: April 4, 1997 Date of Earliest Event Reported: April 3, 1997
_____________ _____________
EQUITABLE OF IOWA COMPANIES
_______________________________________________________________________________
(Exact Name of Registrant as Specified in Its Charter)
Iowa
_______________________________________________________________________________
(State or Other Jurisdiction of Incorporation)
0-8590 42-1083593
______________________________ _____________________________________
(Commission File Number) (I.R.S. Employer Identification No.)
604 Locust Street, P.O. Box 1635, Des Moines, IA 50306
_______________________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
(515) 245-6911
______________________________________________________________________________
(Registrant's Telephone Number, Including Area Code)
ITEM 5. Other Events.
On April 3, 1997 Equitable of Iowa Companies (the "Company")
participated in the sale of $50 million of capital securities (the "Capital
Securities") issued by Equitable of Iowa Companies Capital Trust II (the
"Trust"), a newly created subsidiary business trust of the Company. Each
Capital Security will pay cumulative cash distributions at an annual rate of
8.424% of the stated $1,000 liquidation amount per security, payable semi-
annually commencing October 1, 1997.
The Trust exists for the sole purpose of issuing the Capital Securities
and investing the proceeds thereof in an equivalent amount of 8.424%
Subordinated Deferrable Interest Debentures (the "Subordinated Debentures")
issued by the Company. The Subordinated Debentures will mature on April 1,
2027 (the "Stated Maturity Date").
The Trust will invest the proceeds from the sale of the Capital Securities
in the Subordinated Debentures. It is anticipated that the Company will use
the proceeds from the sale of the Subordinated Debentures to the Trust for
general corporate purposes, including, but not limited to, investments in its
subsidiaries.
So long as no event of default with respect to the Subordinated Debentures
has occurred and is continuing, the Company has the right to defer payments of
interest on the Subordinated Debentures at any time and from time to time for
a period not exceeding 10 consecutive semi-annual periods with respect to each
deferral period (each, an "Extension Period"), provided that no Extension
Period may extend beyond the Stated Maturity Date. Upon the termination of any
such Extension Period and the payment of all amounts then due, the Company may
elect to begin a new Extension Period, subject to certain requirements. If and
for so long as interest payments on the Subordinated Debentures are so deferred,
distributions on the Capital Securities also will be deferred and the Company
will not be permitted, subject to certain exceptions, to declare or pay any cash
distributions with respect to the Company's capital stock (which includes
common, preferred and preference stock) or to make any payment with respect to
debt securities of the Company that rank pari passu with or junior to the
Subordinated Debentures. During an Extension Period, interest on the
Subordinated Debentures will continue to accrue (and the amount of distributions
to which holders of the trust securities are entitled will continue to
accumulate) at the rate of 8.424% per annum, compounded semi-annually.
The Company will, through certain guarantees, the Subordinated Debentures,
the Indenture, and the Amended and Restated Declaration of Trust, taken
together, fully, irrevocably and unconditionally guarantee all of the Trust's
obligations under the Capital Securities.
The Capital Securities will be subject to mandatory redemption, in whole
but not in part, (i) on the Stated Maturity Date upon repayment of the
Subordinated Debentures at a redemption price equal to the principal amount
of the Subordinated Debentures, plus accrued and unpaid interest (the "Maturity
Redemption Price") and (ii) at any time before the Stated Maturity Date
contemporaneously with the optional prepayment of the Subordinated Debentures.
The Subordinated Debentures will be prepayable prior to the Stated
Maturity Date at the option of the Company in whole but not in part, if as a
result of a change in law, the interest payable by the Company on the
Subordinated Debentures is not tax deductible for Federal income tax purposes
or the Trust is deemed to be an "investment company" for purposes of the
Investment Company Act of 1940. Under certain circumstances the prepayment
of the Subordinated Debentures is subject to the payment of a premium over par.
In addition, the Company has the right to liquidate the Trust and distribute
the Subordinated Debentures to the holders of the Capital Securities.
The Capital Securities were sold in a private placement to qualified
institutional buyers, and have not been registered under the Securities Act
of 1993, as amended (the "Act"), and may not be offered or resold in the United
States without registration under, or an applicable exemption from the
registration requirements of the Act and applicable state securities laws.
The Company and the Trust have agreed to file a registration statement
relating to an exchange offer pursuant to which another series of capital
securities of the Trust, guarantee and series of subordinated debentures of the
Company each covered by such registration statement and having the same terms
(but without certain transfer restrictions) as the Capital Securities, and the
existing guarantee and the Subordinated Debentures, respectively (the "Exchange
Securities"), would be offered in exchange for the Capital Securities, the
existing guarantee and the Subordinated Debentures, respectively (the "Exchange
Offer"). Under certain circumstances, in lieu of effecting the registration of
the Exchange Securities, the Company and the Trust will file a shelf
registration statement registering the resale of the Capital Securities, the
guarantee and the Subordinated Debentures. This filing is not an offer to
sell or the solicitation of an offer to buy. Any offering will be made only by
means of a prospectus.
Copies of certain agreements relating to the Capital Securities are
attached hereto as Exhibits and are incorporated by reference herein. The
description above does not purport to be complete and is subject to, and
qualified in its entirety by reference to, such Exhibits.
ITEM 7. Financial Statements and Exhibits.
7(c) Exhibits
1 Purchase Agreement dated March 31, 1997 relating to the
Capital Securities
4.1 Indenture dated March 31, 1997 relating to the Subordinated
Debentures of Equitable of Iowa Companies, including therein
the Form of Subordinated Deferrable Interest Debenture
4.2 Certificate of Trust
4.3 Amended and Restated Declaration of Trust of Equitable of
Iowa Companies Capital Trust II dated March 31, 1997,
including therein the Form of Capital Security
4.4 Registration Rights Agreement dated April 3, 1997
4.5 Series A Capital Securities Guarantee Agreement dated April
3, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EQUITABLE OF IOWA COMPANIES
Date: April 4, 1997 By /s/ John A. Merriman
_____________________________
John A. Merriman,
General Counsel and Secretary
EXHIBIT INDEX
Exhibit No. Description
___________ ___________
1 Purchase Agreement dated March 31, 1997 relating to the Capital
Securities
4.1 Indenture dated March 31, 1997 relating to the Subordinated
Debentures of Equitable of Iowa Companies, including therein the
Form of Subordinated Deferrable Interest Debenture
4.2 Certificate of Trust
4.3 Amended and Restated Declaration of Trust of Equitable of Iowa
Companies Capital Trust II dated March 31, 1997, including therein
the Form of Capital Security
4.4 Registration Rights Agreement dated April 3, 1997
4.5 Series A Capital Securities Guarantee Agreement dated April 3, 1997
EXHIBIT 1
$50,000,000 in Aggregate Liquidation Amount
EQUITABLE OF IOWA COMPANIES CAPITAL TRUST II
(A Delaware Trust)
8.424% Series A Capital Securities
(Liquidation Amount $1,000 per Capital Security)
PURCHASE AGREEMENT
__________________
March 31, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
5500 Sears Tower
Chicago, IL 60606
Ladies and Gentlemen:
Equitable of Iowa Companies Capital Trust II (the "Trust"), a
statutory business trust organized under the Business Trust Act (the
"Delaware Act") of the State of Delaware (Chapter 38, Title 12, of the
Delaware Code, 12 Del. C. Sections 3801 et seq.) and Equitable of Iowa
Companies, an Iowa corporation (the "Company" and, together with the Trust,
the "Offerors"), confirm their agreement with Merrill Lynch & Co. and Merrill
Lynch, Pierce Fenner & Smith Incorporated (collectively, "Merrill Lynch" or
the "Initial Purchaser"), with respect to the issue and sale by the Trust and
the purchase by the Initial Purchaser of $50,000,000 in aggregate liquidation
amount of the 8.424% Series A Capital Securities (Liquidation Amount $1,000
per Capital Security) representing undivided beneficial interests in the
assets of the Trust (the "Series A Capital Securities").
The Series A Capital Securities will be guaranteed by the Company,
to the extent set forth in the Offering Memorandum (as defined below), with
respect to distributions and amounts payable upon liquidation or redemption
and otherwise under the Series A Capital Guarantee of the Company pursuant to
the Series A Capital Securities Guarantee Agreement (together, the "Series A
Capital Securities Guarantee") to be dated as of the Closing Time (as defined
in Section 2(b) hereof) between the Company and First National Bank of
Chicago, as trustee (the "Guarantee Trustee").
The entire proceeds from the sale of the Series A Capital
Securities will be combined with the entire proceeds from the sale by the
Trust to the Company of its common securities (the "Common Securities") and
will be used by the Trust to purchase $51,550,000 in aggregate principal
amount of 8.424% Series A Subordinated Deferrable Interest Debentures due
April 1, 2027 (the "Series A Subordinated Debentures") issued by the Company.
The Series A Capital Securities and the Common Securities will be issued
pursuant to the Amended and Restated Declaration of Trust, to be dated as of
or prior to the Closing Time (the "Declaration"), among the Company, as
Sponsor, Fred S. Hubbell, Paul E. Larson and John A. Merriman as
administrative trustees (the "Administrative Trustees"), First National Bank
of Chicago, as property trustee (the "Property Trustee"), and First Chicago
Delaware Inc., as Delaware trustee (the "Delaware Trustee" and, together with
the Property Trustee and the Administrative Trustees, the "Trustees"). The
Common Securities will be guaranteed by the Company, to the extent set forth
in the Offering Memorandum, with respect to distributions and payments upon
liquidation and redemption pursuant to the terms of the Common Securities
Guarantee Agreement(together, the "Common Securities Guarantee") to be dated
as of the Closing Time between the Company and the Trust. The Series A
Subordinated Debentures will be issued pursuant to an indenture, dated as of
March 31, 1997 (together with other amendments or supplements thereto, the
"Indenture") between the Company and First National Bank of Chicago as
trustee (the "Debenture Trustee"). The Series A Capital Securities issued in
book-entry form will be issued to Cede & Co. as nominee of The Depository
Trust Company ("DTC") pursuant to a letter agreement, to be dated as of the
Closing Time (the "DTC Agreement"), among the Trust, the Property Trustee and
DTC.
The Series A Capital Securities, the Series A Capital Securities
Guarantee and the Series A Subordinated Debentures are collectively referred
to herein as the "Series A Securities". Capitalized terms used herein without
definition have the respective meanings specified in the Offering Memorandum.
The Series A Capital Securities will be subject to the registration
rights set forth in a registration rights agreement (the "Registration Rights
Agreement"), to be executed on and dated as of the Closing Time substantially
in the form of Exhibit A. Pursuant to the Registration Rights Agreement, the
Trust and the Company will agree, among other things, to file with the
Securities and Exchange Commission (the "Commission") (i) a registration
statement (the "Exchange Offer Registration Statement") under the Securities
Act of 1933, as amended (the "1933 Act") relating to the 8.424% Series B
Capital Securities (Liquidation Amount $1,000 per Capital Security) (the
"Series B Capital Securities"), the Series B Capital Securities Guarantee of
the Company pursuant to the Series B Capital Securities Guarantee Agreement
(together, the "Series B Capital Securities Guarantee"), and the 8.424%
Series B Subordinated Deferrable Interest Debentures due April 1, 2027 (the
"Series B Subordinated Debentures" and, collectively with the Series B
Capital Securities and the Series B Capital Securities Guarantee, the "Series
B Securities"), to be offered in exchange for the Series A Securities (such
offer to exchange being referred to herein as the "Exchange Offer") and/or
(ii) a shelf registration statement pursuant to Rule 415 under the 1933 Act
(the "Shelf Registration Statement") relating to the resale by certain
holders of the Series A Securities.
The Series A Securities and the Series B Securities are jointly
referred to as the "Securities"; the Series A Capital Securities and the
Series B Capital Securities are jointly referred to as the "Capital
Securities"; the Series A Subordinated Debentures and the Series B
Subordinated Debentures are jointly referred to as the "Subordinated
Debentures"; and the Series A Capital Securities Guarantee and the Series B
Capital Securities Guarantee are jointly referred to as the "Capital
Securities Guarantees." The Indenture, the Declaration, the Registration
Rights Agreement, the DTC Agreement, the Series A Capital Securities
Guarantee and this Agreement are hereinafter referred to collectively as the
"Operative Documents."
The Offerors understand that the Initial Purchaser proposes to make
an offering of the Series A Capital Securities (as guaranteed by the Series A
Capital Securities Guarantee) on the terms and in the manner set forth herein
and agree that the Initial Purchaser may resell in accordance with applicable
law, subject to the conditions set forth herein, all or a portion of the
Capital Securities to purchasers ("Subsequent Purchasers") at any time after
the date of this Agreement. The Series A Capital Securities are to be offered
and sold through the Initial Purchaser without being registered under the
1933 Act, in reliance upon exemptions therefrom. Pursuant to the terms of
the Series A Capital Securities, investors that acquire Series A Capital
Securities may only resell or otherwise transfer such Capital Securities if
such Capital Securities are hereafter registered under the 1933 Act or if an
exemption from the registration requirements of the 1933 Act is available
(including the exemption afforded by Rule 144A ("Rule 144A") of the rules and
regulations promulgated by the Commission under the 1933 Act (the "1933 Act
Regulations")).
The Offerors will deliver to the Initial Purchaser, as soon as
practicable, but not later than April 1, 1997, copies of an offering
memorandum for use by the Initial Purchaser in connection with its
solicitation of purchases of, or offering of, the Series A Capital Securities
(the "Offering Memorandum"). "Offering Memorandum" means, with respect to
any date or time referred to in this Agreement, the most recent offering
memorandum (or any amendment or supplement to such document), including
exhibits thereto and any documents incorporated therein by reference, which
has been prepared and delivered by the Offerors to the Initial Purchaser in
connection with its solicitation of purchases of, or offering of, the Series
A Capital Securities.
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included," "specified"
or "stated" in the Offering Memorandum (including other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which are incorporated by reference in the
Offering Memorandum; and all references in this Agreement to amendments or
supplements to the Offering Memorandum shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of 1934, as
amended (the "1934 Act") which is incorporated by reference in the Offering
Memorandum.
SECTION 1. Representations and Warranties.
(a) The Offerors jointly and severally represent and warrant to
the Initial Purchaser as of the date hereof and as of the Closing Time referred
to in Section 2(b) hereof, and agree with the Initial Purchaser as follows:
(i) The Offerors have not, directly or indirectly, solicited
any offer to buy or offered to sell, and will not, directly or indirectly,
solicit any offer to buy or offer to sell, in the United States or to any
United States citizen or resident, any security which is or would be integrated
with the sale of the Series A Capital Securities in a manner that would require
the Series A Capital Securities to be registered under the 1933 Act.
(ii) The Offering Memorandum as of its date does not, and as of
the Closing Time will not, include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therin, in the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties in this
subsection shall not apply to any statements contained in or omitted from the
Offering Memorandum made in reliance upon and in conformity with information
furnished to the Offerors in writing by the Initial Purchaser expressly for use
in the Offering Memorandum.
(iii) Each of the Capital Securities, the Capital Securities
Guarantees and the Subordinated Debentures satisfy the eligibility requirements
of Rule 144A(d)(3) under the 1933 Act.
(iv) The documents incorporated or deemed to be incorporated by
reference in the Offering Memorandum at the time they were or hereafter are
filed with the Commission complied and will comply in all material respects
with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
with the other information in the Offering Memorandum, at the date thereof
and at the Closing Time, do not and will not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(v) The accountants who certified the financial statements and
supporting schedules included or incorporated by reference in the Offering
Memorandum are independent auditors with respect to the Company under Rule
101 of the AICPA's Code of Professional Conduct and its interpretations and
rulings.
(vi) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's authorization; and (ii) assets are
safeguarded and transactions are recorded to permit preparation of financial
statements in conformity with generally accepted accounting principles and,
as of the Closing Time, the Company will continue to maintain such a system.
(vii) The consolidated financial statements, together with the
related schedules and notes thereto included in the Offering Memorandum,
present fairly in all material respects the financial position of the Company
and its Subsidiaries (as defined below) at the dates indicated and the
consolidated statement of income, stockholders' equity and cash flows of the
Company and its Subsidiaries for the periods specified; said consolidated
financial statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved except as noted therein. The supporting schedules, if any,
included in the Offering Memorandum present fairly the information required
to be stated therein. The selected financial data included in the Offering
Memorandum present fairly the information shown therein and have been
compiled on a basis consistent with that of the consolidated audited
financial statements included in the Offering Memorandum except as noted
therein.
(viii) Since the date as of which information is given in the
Offering Memorandum, and except as otherwise described or stated therein, (A)
there has been no material adverse change and no development which could
reasonably be expected to result in a material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Trust (a "Trust Material Adverse Effect") or the Company and
its Subsidiaries (as defined below) considered as one enterprise (a "Company
Material Adverse Effect," together with a Trust Material Adverse Effect, a
"Material Adverse Effect"), whether or not arising in the ordinary course of
business, (B) there have been no transactions entered into by the Trust or
the Company or any of its Subsidiaries which are material with respect to the
Trust or the Company and its Subsidiaries considered as one enterprise, other
than those in the ordinary course of business and (C) there has not been any
material change in the long term debt of the Company.
(ix) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of Iowa,
with corporate power and authority to own, lease and operate its properties and
to conduct its business as presently conducted and as described in the Offering
Memorandum, to enter into and perform its obligations under each of the
Operative Documents, to hold the Common Securities issued by the Trust, to
issue and to deliver the Subordinated Debentures, the Capital Securities and
the Capital Securities Guarantees; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except where
the failure to so qualify or be in good standing would not have a Company
Material Adverse Effect.
(x) Each of the corporations of which a majority of the
outstanding voting equity securities are owned, directly or indirectly, by the
Company ("Subsidiaries") has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own, lease and
operate its properties and to conduct its business as presently conducted and
as described in the Offering Memorandum, and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the failure
to so qualify or be in good standing would not have a Company Material
Adverse Effect.
(xi) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Offering Memorandum under the caption
"Capitalization of the Company"; since the date indicated in the Offering
Memorandum there has been no change in the consolidated capitalization of the
Company and its Subsidiaries (other than changes in outstanding Common Stock
resulting from employee benefit plan or dividend reinvestment and stock
purchanse plan transactions); and all of the issued and outstanding capital
stock of the Company have been duly authorized and validly issued, are fully
paid and non-assessable and conform to the descriptions thereof contained in
the Offering Memorandum.
(xii) Each of Equitable Life Insurance Company of Iowa
(Equitable Life"), USG Annuity & Life Company ("USG"), Golden American Life
Insurance Company ("Golden American") and First Golden American Life Insurance
Company of New York ("First Golden"), and each other Subsidiary of the Company,
if any, which is engaged in the business of insurance or reinsurance
(collectively, the "Insurance Subsidiaries") holds such insurance licenses,
certificates and permits from governmental authorities (including, without
limitation, from the insurance regulatory agencies of the various
jurisdictions where it conducts business (the "Insurance Licenses")) as are
necessary to the conduct of its business as described in the Offering
Memorandum; the Company and each Insurance Subsidiary have fulfilled and
performed all obligations necessary to maintain the Insurance Licenses;
except as disclosed in the Offering Memorandum, there is no pending or, to
the knowledge of the Company, threatened action, suit, proceeding or
investigation that could reasonably be expected to result in the revocation,
termination or suspension of any Insurance License; except as disclosed in
the Offering Memorandum, no insurance regulatory agency or body has issued,
or commenced any proceeding for the issuance of, any order or decree
impairing, restricting or prohibiting the payment of dividends by any
Insurance Subsidiary to its parent.
(xiii) Except as disclosed in the Offering Memorandum, the Company
and the Insurance Subsidiaries have made no material changes in their insurance
reserving practices since the most recent audited financial statements
included or incorporated in the Offering Memorandum.
(xiv) All reinsurance treaties and arrangements to which any
Insurance Subsidiary is a party are in full force and effect and no Insurance
Subsidiary is in violation of or in default in the performance, observance or
fulfillment of, any obligation, agreement, covenant or condition contained
therein, except to the extent any such violation or default would not have a
material adverse effect on such Insurance Subsidiary; no Insurance Subsidiary
has received any notice from any of the other parties to such treaties,
contracts or agreements that such other party intends not to perform such
treaty and, to the best knowledge of the Company and the Insurance
Subsidiaries, the Company and the Insurance Subsidiaries have no reason to
believe that any of the other parties to such treaties or arrangements will
be unable to perform such treaty or arrangement except to the extent
adequately and properly reserved for in the consolidated financial statements
of the Company included in the Offering Memorandum.
(xv) The statutory financial statements of the Insurance
Subsidiaries from which certain ratios and other statistical data included or
incorporated in the Offering Memorandum have been derived, have for each
relevant period been prepared in conformity with statutory accounting
principles or practices required or permitted by the National Association of
Insurance Commissioners and by the appropriate Insurance Department of the
jurisdiction of domicile of each Insurance Subsidiary, and such statutory
accounting practices have been applied on a consistent basis throughout the
periods involved, except as may otherwise be indicated therein or in the notes
thereto, and present fairly the statutory financial position of the Insurance
Subsidiaries as of the dates thereof, and the statutory basis results of
operations of the Insurance Subsidiaries for the periods covered thereby.
(xvi) The Trust has been duly created and is validly existing and
in good standing as a business trust under the Delaware Act with the power and
authority to own its properties and to conduct its business as described in
the Offering Memorandum and to enter into and perform its obligations under
this Agreement, the Series A Capital Securities, the Common Securities, the
Declaration and the Registration Rights Agreement; the Trust is duly
qualified to transact business as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is necessary,
except to the extent that the failure to so qualify or be in good standing
would not have a Trust Material Adverse Effect; the Trust is not a party to
or otherwise bound by any agreement other than those described in the
Offering Memorandum; the Trust is and will under current law be classified
for United States federal income tax purposes as a grantor trust and not as
an association taxable as a corporation; and as of the Closing Time the Trust
is and will be treated as a subsidiary of the Company pursuant to generally
accepted accounting principles.
(xvii) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company against
payment therefor as described in the Offering Memorandum, will be validly
issued and will represent undivided common beneficial interests in the assets
of the Trust and will conform in all material respects to the description
therof contained in the Offering Memorandum; the issuance of the Common
Securities is not subject to preemptive or other similar rights; and, at the
Closing Time, all of the issued and outstanding Common Securities of the Trust
will be directly or indirectly owned by the Company, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equitable
right.
(xviii) This Agreement has been duly authorized and, at the Closing
Time will have been duly executed and delivered by the Company and the Trust;
(xix) The Declaration has been duly authorized by the Company
and, at theClosing Time, will have been duly executed and delivered by the
Company and the Administrative Trustees and assuming the due authorization,
execution and delivery of the Declaration by the Delaware Trustee and the
Property Trustee, the Declaration will, at the Closing Time, be a valid and
binding obligation of the Company and the Administrative Trustees, enforceable
against the Company and the Administrative Trustees in accordance with its
terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity) (the "Bankruptcy Exceptions"); and the
Declaration will conform in all material respects to the description thereof
in the Offering Memorandum.
(xx) The Series A Capital Securities have been duly authorized
and, when issued and delivered by the Trust pursuant to this Agreement against
payment therefore as provided herein, will be validly issued and fully paid and
nonassessable undivided beneficial interests in the assets of the Trust, and
will conform in all material respects to the description thereof in the
Offering Memorandum; the issuance of the Series A Capital Securities is not
subject to preemptive or other similar rights; and the Series B Capital
Securities have been duly authorized by the Trust and, in the event of the
consummation of the Exchange Offer, will be validly issued and fully paid and
nonassessable undivided common beneficial interests in the assets of the
Trust; and (subject to the terms of the Declaration) holders of Series A
Capital Securities will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
incorporated under the laws of the State of Delaware.
(xxi) Each of the Series A Capital Securities Guarantee, the
Series B Capital Securities Guarantee and the Common Guarantee has been duly
authorized by the Company and, at the Closing Time, the Series A Capital
Securities Guarantee will have been duly executed and delivered by the
Company and assuming due authorization, execution and delivery of the Series
A Capital Securities Guarantee by the Guarantee Trustee, will constitute a
valid and binding obligation of the Company, enforceable against the Company
in accordance with its terms, except to the extent that enforcement thereof
may be limited by the Bankruptcy Exceptions; and the Series A Capital
Securities Guarantee will conform in all material respects to the description
thereof in the Offering Memorandum. In the event the Exchange Offer is
consummated, the Series B Capital Securities Guarantee will have been duly
executed and delivered by the Company and (assuming due authorization,
execution and delivery of the Series B Capital Securities Guarantee by First
National Bank of Chicago as trustee, (the "Series B Capital Securities
Guarantee Trustee")), will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
to the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions; and the Series B Capital Securities Guarantee will have been duly
qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
(xxii) The Indenture has been duly authorized by the Company and,
at the Closing Time, will have been duly executed and delivered by the Company
and, assuming due authorization, execution and delivery of the Indenture by the
Debenture Trustee, will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
to the extent enforcement thereof may be limited by the Bankruptcy
Exceptions; the Indenture will conform in all material respects to the
description thereof in the Offering Memorandum. In the event the Exchange
Offer is consummated, the Indenture will have been duly qualified under the
Trust Indenture Act.
(xxiii) The issuance and delivery of the Subordinated Debentures
have been duly authorized by the Company and, at the Closing Time, the Series A
Subordinated Debentures will have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered
against payment therefor as described in the Offering Memorandum, will
constitute valid and binding obligations of the Company; and the Series B
Subordinated Debentures have been duly authorized by the Company and, when
duly executed by the Company and authenticated in the manner provided in the
Indenture, and delivered in exchange for the Series A Subordinated Debentures
will constitute valid and binding obligations of the Company, in each case
enforceable against the Company in accordance with their terms, except to the
extent enforcement thereof may be limited by the Bankruptcy Exceptions. The
Subordinated Debentures will conform in all material respects to the
description thereof in the Offering Memorandum; and the Subordinated
Debentures will be in the form contemplated by, and entitled to the benefits
of, the Indenture.
(xxiv) At the Closing Time, the Registration Rights Agreement will
have been duly authorized, executed and delivered by each of the Trust and the
Company and, assuming the due authorization, execution and delivery thereof
by the other parties thereto, will constitute the valid and binding
obligation of each of the Trust and the Company enforceable against each of
the Trust and the Company in accordance with the terms thereof, except to the
extent enforcement thereof may be limited by the Bankruptcy Exceptions; and
the Registration Rights Agreement will conform in all material respects to
the description thereof in the Offering Memorandum.
(xxv) The Series A Subordinated Debentures are subordinate and
junior in right of payment to all Senior Indebtedness (as defined in the
Indenture) of the Company.
(xxvi) Each of the Administrative Trustees of the Trust is an
officer of the Company and has been duly authorized by the Company to execute
and deliver the Declaration.
(xxvii) None of the Offerors is an "investment company" or a
"company controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxviii) None of the Company, any Subsidiary or the Trust is in
violation of its charter, bylaws, certificate or declaration of trust, as
applicable, or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument to which
it is a party or by which it may be bound or to which any of its properties or
assets may be subject, except for such violations or defaults that would not
have a Material Adverse Effect. The execution and delivery of the Operative
Documents, the issuance and delivery of the Series A Capital Securities, the
Series A Capital Securities Guarantee, the Series A Subordinated Debentures,
the Common Securities Guarantee and the consummation of the transactions
contemplated herein and therein have been duly authorized by all necessary
corporate action on the part of the Company and the Trust and do not and will
not result in any violation of the charter or by-laws of the Company or any
Subsidiary nor any violation of the Declaration or Trust Certificate, and do
not and will not conflict with, or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company, the Trust or any Subsidiary under (A) any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument to
which the Company, the Trust or any Subsidiary is a party or by which it may
be bound or to which any of its properties or assets may be subject (except
for such conflicts, breaches or defaults or liens, charges or encumbrances
that would not have a Material Adverse Effect) or (B) any existing applicable
law, rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company, the Trust or any Subsidiary or any of their
respective properties or assets.
(xxix) No order, license, consent, authorization or approval of,
or exemption by, or the giving of notice to, or the registration with any
federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, and no filing, recording,
publication or registration in any public office or any other place, was or
is now required in connection with the issuance and sale of the Series A
Capital Securities, the Common Securities, the Series A Subordinated
Debentures, the Series A Capital Securities Guarantee or the Common
Securities hereunder, except for such as may be required under the 1933 Act,
the 1934 Act or state securities or insurance laws.
(xxx) The Series A Capital Securities are eligible for resale
pursuant to Rule 144A and will not be, at the Closing Time, of the same class
(within the meaning of Rule 144A) as securities listed on a national securities
exchange registered under Section 6 of the 1934 Act or quoted on a U.S.
automated interdealer quotation system.
(xxxi) None of the Company, its affiliates (as such term is
defined in Rule 501(b) under the 1933 Act for any person or entity,
"Affiliates"), or any person acting on its or any of their behalf (other than
the Initial Purchaser or any person acting on behalf of the Initial Purchaser,
as to whom the Company makes no representation) has engaged, or will engage, in
connection with the offering of the Series A Capital Securities, in any form
of general solicitation or general advertising within the meaning of Section
502(c) under the 1933 Act.
(xxxii) Subject to compliance by the Initial Purchaser with the
representations and warranties set forth in Section 2 and the procedures set
forth in Section 6, it is not necessary on connection with the offer, sale
and delivery of the Series A Capital Securities to the Initial Purchaser and
each Subsequent Purchaser in the manner contemplated by this Agreement and
the Offering Memorandum to register the Series A Capital Securities under the
1933 Act and neither the Company nor the Trust shall take any action to cause
the resale of the Series A Capital Securities by the Initial Purchaser to
violate Section 5 of the 1933 Act.
(xxxiii) Other than as set forth in the Offering Memorandum, there
are no legal or governmental proceedings pending to which the Company or any of
its Subsidiaries is a party or of which any property of the Company or any of
its Subsidiaries is the subject which, if determined adversely to the Company
or any of its Subsidiaries, would individually or in the aggregate have a
material adverse effect on the consolidated position, stockholders' equity or
results of operations of the Company and its Subsidiaries considered as one
enterprise; and, to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others.
(b) Any certificate signed by any trustee of the Trust or any
officer of the Company and delivered to the Initial Purchaser or to counsel for
the Initial Purchaser shall be deemed a representation and warranty by the
Trust or the Company, as the case may be, to the Initial Purchaser as to the
matters covered thereby.
SECTION 2. Sale and Delivery to Initial Purchaser; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Trust
agrees to sell to the Initial Purchaser and the Initial Purchaser agrees to
purchase from the Trust, 50,000 of the Series A Capital Securities at a price
of $1,000 per Series A Capital Security.
(b) Deliveries of a certificate for the account of the Initial
Purchaser for the Series A Capital Securities shall be made at the office of
LeBoeuf, Lamb, Greene & MacRae, L.L.P., 125 West 55th Street, New York, New
York 10019 and payment of the purchase price for the Series A Capital
Securities shall be made by the Initial Purchaser to the Trust by wire
transfer of immediately available funds contemporaneous with closing at such
place as shall be agreed upon by the Initial Purchaser and the Offerors, at
10:00 a.m. (New York time) on April 3, 1997 or such other time not later than
ten business days after such date as shall be agreed upon by the Initial
Purchaser and the Offerors (such time and date of payment and delivery being
herein called the "Closing Time").
Certificates for the Series A Capital Securities shall be in such
denominations and registered in such names as the Initial Purchaser may
request in writing at least one business day before the Closing Time. The
certificates representing the Series A Capital Securities which are not
resold to institutional "accredited investors" shall be registered in the
name of Cede & Co. pursuant to the DTC Agreement and shall be made available
for examination and packaging by the Initial Purchaser in The City of New
York not later than 10:00 A.M. on the last business day prior to the Closing
Time.
(c) As compensation to the Initial Purchaser for its commitment
hereunder and in view of the fact that the proceeds of the sale of the Series
A Capital Securities will be used to purchase Series A Subordinated
Debentures of the Company, the Company hereby agrees to pay at the Closing
Time to the Initial Purchaser, $10 per Series A Capital Security to be
delivered by the Trust hereunder at the Closing Time.
(d) The Initial Purchaser represents and warrants to, and
agrees with, the Company that it is a Qualified Institutional Buyer (as defined
in Section 6(a)(i)) and an Institutional Accredited Investor (as defined in
Section 6(a)(i)).
SECTION 3. Covenants of the Offerors.
Each of the Offerors jointly and severally agrees with the Initial
Purchaser as follows:
(a) The Offerors, as promptly as possible, will furnish to
the Initial Purchaser, without charge, such number of copies of the Offering
Memorandum and any amendments and supplements thereto and documents
incorporated by reference therein as the Initial Purchaser may reasonably
request.
(b) The Offerors will immediately notify the Initial Purchaser,
and confirm such notice in writing, of (x) any filing made by the Offerors of
information relating to the offering of the Series A Capital Securities to
the Initial Purchaser with any securities exchange or any other regulatory
body in the United States or any other jurisdiction, and (y) prior to the
completion of the placement of the Series A Capital Securities by the Initial
Purchaser as evidenced by a notice in writing from the Initial Purchaser to
the Offerors, any material changes in or affecting the earnings, business
affairs or business prospects of the Trust, or the Company and its
Subsidiaries considered as one enterprise, which (i) make any statement in
the Offering Memorandum false or misleading or (ii) are not disclosed in the
Offering Memorandum. In such event or if during such time any event shall
occur as a result of which it is necessary, in the reasonable opinion of the
Company, its counsel or counsel for the Initial Purchaser, to amend or
supplement the Offering Memorandum in order that the Offering Memorandum not
include any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances then existing, the Company will forthwith amend or
supplement the Offering Memorandum by preparing and furnishing to the Initial
Purchaser an amendment or amendments of, or a supplement or supplements to,
the Offering Memorandum (in form and substance satisfactory in the reasonable
opinion of counsel for the Initial Purchaser) so that, as so amended or
supplemented, the Offering Memorandum will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances existing at the
time it is delivered to a Subsequent Purchaser, not misleading.
(c) The Offerors will advise the Initial Purchaser promptly of
any proposal to amend or supplement the Offering Memorandum and will not effect
such amendment or supplement without the consent of the Initial Purchaser,
which consent shall not be unreasonably withheld. Neither the consent of the
Initial Purchaser, nor the Initial Purchaser's delivery of any such amendment
or supplement, shall constitute a waiver of any of the conditions set forth
in Section 5 hereof.
(d) The Offerors shall take all reasonable action necessary to
enable Standard & Poor's Ratings Services, a division of McGraw Hill, Inc.
("S&P"), and Moody's Investors Service, Inc. ("Moody's") to provide their
respective credit ratings of the Series A Capital Securities.
(e) The Offerors will cooperate with the Initial Purchaser and
use reasonable efforts to permit the Series A Capital Securities to be eligible
for clearance and settlement through the facilities of DTC.
(f) The Trust will use the net proceeds received by it from the
sale of the Series A Capital Securities, and the Company will use the proceeds
received by it from the sale of the Series A Subordinated Debentures, in the
manners specified in the Offering Memorandum under "Use of Proceeds".
(g) The Offerors will endeavor, in cooperation with the Initial
Purchaser, to qualify, or confirm or perfect an exemption regarding, the
Securities for offering and sale under the applicable securities laws of such
states and other jurisdictions of the United States as the Initial Purchaser
may designate; provided, however, that the Offerors shall not be obligated to
qualify as a foreign corporation in any jurisdiction in which they are not so
qualified. In each jurisdiction in which the Series A Capital Securities
have been so qualified, the Offerors will file such statements and reports as
may be required by the laws of such jurisdiction to continue such
qualification in effect for so long as may be required in connection with
distribution of the Securities.
(h) Prior to 30 days after the date hereof, neither the Trust
nor the Company will, without the prior written consent of the Initial
Purchaser, directly or indirectly, issue, sell, offer or agree to sell, grant
any option for the sale of, or otherwise dispose of, Capital Securities, any
security convertible into exchangeable or exercisable for Capital Securities or
the Subordinated Debentures or any debt securities substantially similar
(including provisions with respect to the deferral of interest) to the
Subordinated Debentures or any equity security substantially similar to the
Capital Securities (except for the Securities issued pursuant to this
Agreement) or enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Capital Securities, whether such swap
transaction is to be settled by delivery of Capital Securities or such other
securities, in cash or otherwise; provided, however, that the foregoing
restrictions shall not apply to any disposal of the Subordinated Debentures
following any liquidation of the Trust.
(i) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-198,
An Act Relating to Disclosure of Doing Business with Cuba, and the Company
further agrees that if it commences engaging in business with the government of
Cuba or with any person or affiliate located in Cuba after the date of the
Offering Memorandum or if the information reported in the Offering
Memorandum, if any, concerning the Company's business with Cuba or with any
person or affiliate located in Cuba changes in any material way, the Company
will provide the Florida Department of Banking and Finance (the "Department")
notice of such business or change, as appropriate, in a form acceptable to
the Department.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and any filing of the Offering Memorandum (including
financial statements and any schedules or exhibits and any document
incorporated therein by reference) and of each amendment or supplement
thereto, (ii) the preparation, printing and delivery to the Initial Purchaser
of this Agreement, the Operative Documents and such other documents as may be
required in connection with the offering, purchase, sale and delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates
for the Series A Capital Securities, the Series A Capital Securities
Guarantee and the Series A Subordinated Debentures to the Initial Purchaser,
(iv) the fees and disbursements of the Company's counsel, accountants and
other advisors, (v) the qualification of the Securities under securities
laws in accordance with the provisions of Section 3(g), including filing fees
and the fees and disbursements of counsel for the Initial Purchaser in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any Legal Investment Survey, (vi) rating agency fees, (vii) the
fees and expenses of any trustee appointed under any of the Operative
Documents or the Capital Securities Guarantees, including the fees and
disbursements of counsel for such trustees in connection with the Operative
Documents, (viii) the printing and delivery to the Initial Purchaser of
copies of the Blue Sky Survey and any Legal Investment Survey and (ix) the
cost of qualifying the Capital Securities with the DTC.
(b) Termination of Agreement. If this Agreement is terminated
by the Initial Purchaser in accordance with the provisions of Section 5 or
Section 10(a)(i) hereof, the Company shall reimburse the Initial Purchaser for
all of its out-of-pocket expenses, including the reasonable fees and
disbursements of LeBoeuf, Lamb, Greene & MacRae L.L.P., counsel for the Initial
Purchaser.
SECTION 5. Conditions of Initial Purchaser's Obligations. The
obligations of the Initial Purchaser hereunder are subject to the accuracy of
the representations and warranties of the Offerors contained in Section 1
hereof or in certificates of any Trustee of the Trust, officer of the Company
or any of its subsidiaries delivered pursuant to the provisions hereof, to the
performance by the Offerors of their obligations hereunder, and to the
following further conditions:
(a) At the Closing Time the Initial Purchaser shall have
received:
(1) The favorable opinion, dated as of the Closing Time,
of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell & O'Brien, P.C., counsel
for the Company, in form and substance satisfactory to counsel for the Initial
Purchaser, to the effect that:
(i) Each of the Company and Equitable Life, Equitable
American Insurance Company, Equitable Investment Services, Inc. and Locust
Street Securities, Inc. has been duly incorporated and is validly existing
under the laws of the State of Iowa, USG has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Oklahoma, Golden American has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware and
each of EIC Variable, Inc. and First Golden has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of New York, in each case with corporate power and authority to carry
on the business in which it is engaged and to own, lease and operate its
properties and conduct its business as described in the Offering Memorandum;
(ii) The capital stock of the Company conforms in all
material respects to the description thereof in the Offering Memorandum;
(iii) The Trust is not required to be qualified and in
good standing as a foreign company in Iowa, except to the extent that the
failure to so qualify or be in good standing would not have a Trust Material
Adverse Effect; and the Trust is not a party to or otherwise bound by any
agreement other than those described in the Offering Memorandum;
(iv) The Declaration has been duly authorized,
executed and delivered by the Company and the Trustees and is a valid and
binding obligation of the Company, enforceable against the Company and each of
the Administrative Trustees in accordance with its terms, except as enforcement
thereof may be limited by the Bankruptcy Exceptions;
(v) All legally required proceedings in connection
with the authorization, issuance and validity of the Series A Securities and
the sale of the Series A Securities in accordance with this Agreement (other
than the filing of post-issuance reports, the non-filing of which would not
render the Series A Securities invalid) have been taken and all legally
required orders, consents or other authorizations or approvals of any other
public boards or bodies in connection with the authorization, issuance and
public boards or Series A Securities and the sale of the Series A Securities in
accordance with this Agreement (other than in connection with or in compliance
with the provisions of the securities or Blue Sky laws of any jurisdictions, as
to which no opinion need be expressed) have been obtained and are in full force
and effect;
(vi) Each of the Series A Capital Securities, the
Series A Capital Securities Guarantee and the Series A Subordinated Debenture
satisfies the eligibility requirements of Rule 144A(d)(3) under the 1933 Act.
(vii) Each of the documents incorporated by reference
in the Offering Memorandum at the time they were filed or last amended (other
than the financial statements and the notes thereto, the financial schedules,
and any other financial or statistical data included or incorporated by
reference therein, as to which such counsel need express no belief) complied as
to form in all material respects with the requirements of the 1934 Act and the
1934 Act Regulations, as applicable;
(vii) The Common Securities, the Capital Securities,
the Subordinated Debentures, the Capital Securities Guarantees, the Common
Securities Guarantee, the Declaration and the Indenture conform in all material
respects to the descriptions thereof contained in the Offering Memorandum;
(ix) The descriptions in the Offering Memorandum and
each amendment or supplement thereto of regulations, statutes, legal and
governmental proceedings and contracts and other documents are accurate in all
material respects and fairly present the information required to be shown and
such counsel does not know of any legal or governmental proceedings required to
be described in the Offering Memorandum or any amendment or supplement thereto
that are not so described (or the descriptions of which are not incorporated
by reference) or of any contracts or documents of a character required to be
described in the Offering Memorandum or any amendment or supplement thereto
that are not so described (or the descriptions of which are not incorporated
by reference).
(x) All of the issued and outstanding Common
Securities of the Trust are directly owned by the Company free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equitable
right;
(xi) This Agreement and the Registration Rights
Agreement have been duly authorized, executed and delivered by each of the
Trust and the Company and constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms,
except to the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions;
(xii) The Capital Securities Guarantees and the
Common Securities Guarantee have been duly authorized by the Company and the
Series A Guarantee has been duly executed and delivered by the Company and
assuming it is duly authorized, executed, and delivered by the Guarantee
Trustee, constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by Bankruptcy Exceptions. In the event the
Exchange Offer is consummated pursuant to the terms of such Exchange Offer, the
Series B Guarantee, assuming it is duly executed and delivered by the Company
and duly authorized, executed, and delivered by the Series B Guarantee Trustee,
will constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions
(xiii) The Indenture has been duly executed and
delivered by the Company and, assuming due authorization, execution, and
delivery thereof by the Debenture Trustee, is a valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions;
(xiv) The issuance and delivery of the Series A
Subordinated Debentures have been duly authorized by the Company and the
Series A Subordinated Debentures have been duly executed and delivered by the
Company and, when authenticated by the Debenture Trustee in the manner provided
for in the Indenture and delivered against payment therefor as provided in the
Offering Memorandum, constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by the Bankruptcy Exceptions;
(xv) The Series B Subordinated Debentures have been
duly authorized by the Company and when executed by the Company and
authenticated by the Debenture Trustee in the manner provided for in the
Indenture and delivered in exchange for the Series A Subordinated Debentures
pursuant to the terms of the Exchange Offer, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except to the extent that enforcement thereof may be limited by
the Bankruptcy Exceptions;
(xvi) Neither the Company nor the Trust is an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the 1940 Act;
(xvii) The execution, delivery and performance of this
Agreement, the Operative Documents and the issuance and delivery of the Capital
Securities, the Capital Securities Guarantees, the Common Securities Guarantee,
the Subordinated Debentures and the consummation of the transactions
contemplated herein and therein; and the compliance by each of the Offerors
with their respective obligations hereunder and thereunder do not and will not
conflict with, result in a breach of, or constitute a default under the charter
or by-laws of the Company or any of its Subsidiaries or the terms of any
indenture or other agreement or instrument known to such counsel and to which
the Company or any of its Subsidiaries is a party or bound, or result in a
violation of any statute or regulation, or any order or decree known to such
counsel to be applicable to the Company or any of its Subsidiaries of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or any of its Subsidiaries;
(xiii) Each Insurance Subsidiary holds such insurance
licenses, certificates and permits from governmental authorities (including,
without limitation, Insurance Licenses) which are necessary to the conduct of
its business as described in the Offering Memorandum; to the best knowledge of
such counsel, there is no pending or threatened action, suit, proceeding or
investigation that could reasonably be expected to result in the revocation,
termination or suspension of any Insurance License; and, except as disclosed
in the Offering Memorandum, to the knowledge of such counsel, no insurance
regulatory agency or body has issued, or commenced any proceeding for the
issuance of, any order or decree impairing, restricting or prohibiting the
payment of dividends by any Insurance Subsidiary to its parent; and
(xix) To the best knowledge of such counsel, all
reinsurance treaties and arrangements to which any Insurance Subsidiary is a
party are in full force and effect and no Insurance Subsidiary is in violation
of or in default in the performance, observance or fulfillment of, any
obligation, agreement, covenant or condition contained therein, except to the
extent any such violation or default would not have a material adverse effect
on such Insurance Subsidiary.
Moreover, such counsel shall confirm that nothing has come to such
counsel's attention that would lead such counsel to believe that the Offering
Memorandum (except for financial statements and related schedules included or
incorporated by reference therein as to which such counsel need not express
an opinion) as of the date thereof does not, and as of the Closing Time will
not, include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading (except such
counsel need express no opinion as to statements contained in or omitted from
such documents made in reliance upon and in conformity with information
furnished to the Offerors in writing by the Initial Purchaser expressly for
use in such documents).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of Delaware, Iowa and
the federal law of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
Initial Purchaser and (B) as to matters of Delaware Law, upon the opinion of
Richards, Layton & Finger, P.A., special Delaware counsel to the Offerors, in
which case the opinion shall state that such counsel believes that you and
such counsel are entitled to so rely.
(2) The Offerors shall have furnished to the Initial
Purchaser the opinion of Shaw, Pittman, Potts & Trowbridge, counsel for the
Offerors, covering matters set forth in subparagraphs (b)(1)(xi) (relating
solely to the enforceability of the Registration Rights Agreement), (xiii),
(xiv) and (xv) above.
(3) The favorable opinion, dated as of Closing Time, of
Richards, Layton & Finger, P.A., special Delaware counsel to the Offerors, in
form and substance satisfactory to counsel for the Initial Purchaser, to the
effect that:
(i) The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware Act, and all
filings required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have been made.
(ii) Under the Delaware Act and the Declaration, the
Trust has the power and authority to own property and conduct its business, all
as described in the Offering Memorandum.
(iii) The Declaration constitutes a valid and binding
obligation of the Company and the Trustees and is enforceable against the
Company and the Trustees in accordance with its terms, subject, as to
enforcement, to (i) bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation, fraudulent conveyance and other similar laws
relating to or affecting the rights and remedies of creditors generally,
(ii) principles of equity, including applicable law relating to fiduciary
duties (regardless of whether considered and applied in a proceeding in
equity or at law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification and contribution.
(iv) Under the Delaware Act and the Declaration, the
Trust has the power and authority to (i) execute and deliver, and to perform
its obligations under, this Agreement and the Registration Rights Agreement and
(ii) issue, and perform its obligations under, the Capital Securities and
Common Securities.
(v) Under the Delaware Act and the Declaration, the
execution and delivery by the Trust of this Agreement and the Registration
Rights Agreement, and the performance by the Trust of its obligations hereunder
and under the Registration Rights Agreement, have been duly authorized by all
necessary action on the part of the Trust.
(vi) The certificates for the Series A Capital
Securities are in due and proper form, the Series A Capital Securities have
been duly authorized by the Declaration and are duly and validly issued and,
subject to qualifications hereinafter expressed in this paragraph (vi), fully
paid and nonassessable undivided beneficial interests in the assets of the
Trust; the holders of the Series A Capital Securities, as beneficial owners of
the Trust, will 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; said counsel may note that
the holders of the Series A Capital Securities may be obligated to make
payments as set forth in the Declaration.
(vii) The certificates for the Series B Capital
Securities are in due and proper form and the Series B Capital Securities have
been duly authorized by the Declaration. The Series B Capital Securities
issuable in the Exchange Offer, when issued and delivered in such Exchange
Offer upon the terms and conditions thereof, will be duly and validly issued
subject to qualifications hereinafter expressed in this paragraph (vii), fully
paid and nonassessable undivided beneficial interests in the assets of the
Trust and the holders of the Series B Capital Securities, as beneficial owners
of the Trust, will 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; said counsel may note that
the holders of the Series B Capital Securities may be obligated to make
payments as set forth in the Declaration.
(viii) The Common Securities have been duly authorized
by the Declaration and are duly and validly issued and represent undivided
beneficial interests in the assets of the Trust.
(ix) Under the Delaware Act and the Declaration, the
issuance of the Capital Securities is not subject to preemptive rights.
(x) The issuance and sale by the Trust of the Capital
Securities and Common Securities, the purchase by the Trust of the Subordinated
Debentures, the execution, delivery and performance by the Trust of this
Agreement and the Registration Rights Agreement, the consummation by the Trust
of the transactions contemplated hereby and by the Registration Rights
Agreement and compliance by the Trust with its obligations hereunder and
thereunder will not violate (i) any of the provisions of the Certificate of
Trust or the Declaration or (ii) any applicable Delaware law or administrative
regulation.
(4) The favorable opinion, dated as of Closing Time, of
the law department of the First National Bank of Chicago, counsel of the First
National Bank of Chicago, as Property Trustee under the Declaration, and
Guarantee Trustee under the Capital Securities Guarantees, in form and
substance satisfactory to counsel for the Initial Purchaser, to the effect
that:
(i) The First National Bank of Chicago is a national
banking association with trust powers, duly organized, validly existing and in
good standing under the laws of the United States with all necessary power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of the Declaration and the Series A Guarantee.
(ii) The execution, delivery and performance by the
Property Trustee of the Declaration and the execution, delivery and performance
by the Guarantee Trustee of the Series A Guarantee have been duly authorized by
all necessary corporate action on the part of the Property Trustee and the
Guarantee Trustee, respectively. The Declaration and the Capital Securities
Series A Guarantee have been duly executed and delivered by the Property
Trustee and the Guarantee Trustee, respectively, and constitute the legal,
valid and binding obligations of the Property Trustee and the Guarantee
Trustee, respectively, enforceable against the Property Trustee and the
Guarantee Trustee, respectively, in accordance with their terms, except to the
extent the enforcement thereof may be limited by the Bankruptcy Exceptions.
(iii) The execution, delivery and performance of the
Declaration and the Series A Guarantee by the Property Trustee and the
Guarantee Trustee, respectively, do not conflict with or constitute a breach
of the Articles of Organization or Bylaws of the Property Trustee and the
Guarantee Trustee, respectively.
(iv) No consent, approval or authorization of, or
registration with or notice to, any state or federal banking authority is
required for the execution, delivery or performance by the Property Trustee
and the Guarantee Trustee of the Declaration and the Series A Guarantee.
(5) The opinion of Nyemaster, Goode, McLaughlin, Voigts,
West, Hansell & O'Brien, P.C., special tax counsel to the Offerors, that
(i) the Series A Subordinated Debentures will be classified for United States
federal income tax purposes as indebtedness of the Company, (ii) 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 and (iii) the discussion
set forth in the Offering Memorandum under the heading "Certain United States
Federal Income Tax Consequences" is a fair and accurate summary of the
matters addressed therein, based upon current law and the assumptions stated
or referred to therein. Such opinion may be conditioned on, among other
things, the initial and continuing accuracy of the facts, financial and other
information, covenants and representations set forth in certificates of
officers of the Company and the Trust and other documents deemed necessary
for such opinion.
(6) The favorable opinion, dated as of Closing Time, of
LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the Initial Purchaser, in
form and substance satisfactory to the Initial Purchaser with respect to the
incorporation and legal existence of the Company, the Capital Securities, the
Indenture, the Capital Securities Guarantee, this Agreement, the Registration
Rights Agreement and other related matters as the Initial Purchaser may
require. In giving its opinion, LeBoeuf, Lamb, Greene & MacRae, L.L.P. may
rely as to certain matters of Iowa and Delaware law upon the opinions of
Nyemaster, Goode, McLaughlin, Voigts, West, Hansell & O'Brien, P.C. and
Richards, Layton & Finger, P.A., counsel for the Offerors, which shall be
delivered in accordance with Section 5(a)(1) and 5(a)(3) hereto.
(b) At the Closing Time there shall not have been, since the
date hereof or since the respective dates as of which information is given in
the Offering Memorandum, any material adverse change, or any development or
event involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Trust, or the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Initial Purchaser shall have received a certificate of an executive officer of
the Company, and a certificate of an Administrative Trustee of the Trust, dated
as of the Closing Time, to the effect that except as disclosed in the
Offering Memorandum, (i) there has been no such material adverse change or
development or event, (ii) the representations and warranties in Section 1
hereof are true and correct with the same force and effect as though
expressly made at and as of the Closing Time, and (iii) the Offerors have
complied with all agreements and satisfied all conditions on their part to be
performed or satisfied at or prior to the Closing Time.
(c) At the time of the execution of this Agreement and at the
Closing Time, Ernst & Young LLP shall have furnished to the Initial Purchaser a
letter or letters, dated respectively as of the date of this Agreement and as
of the Closing Time, in form and substance satisfactory to the Initial
Purchaser, confirming that they are independent auditors with respect to the
Company under Rule 101 of the AICPA's Code of Professional Conduct and its
interpretations and rulings and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules incorporated in the Offering Memorandum and
reported on by them comply in form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(ii) on the basis of carrying out certain specified
procedures (but not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal matters of significance
with respect to the comments set forth in such letter; a reading of the minutes
of the meetings of the stockholders, directors and executive and audit
committees of the Company, Equitable Life, USG and Golden American; and
inquiries of certain officials of the Company who have responsibility for
financial and accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to the date of the most recent audited
financial statements included or incorporated into the Offering Memorandum,
nothing came to their attention which caused them to believe that there were
any changes, at a specified date not more than five business days prior to the
date of the letter, in the debt of the Company and its subsidiaries or capital
stock of the Company or, to the extent such information is available, there
were any decreases in the stockholders' equity of the Company, as compared with
the amounts shown on the most recent consolidated balance sheet incorporated in
the Offering Memorandum, or, to the extent such information is available,
there were any decreases, as compared with the corresponding period in the
preceding year, in net investment income, total revenues, income before
income taxes or net income of the Company and its subsidiaries, except in all
instances for changes or decreases set forth in such letter, in which case
the letter shall be accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed necessary by the
Initial Purchaser; and
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Offering Memorandum,
including, without limitation, the information set forth under the captions
"Ratio of Earnings to Fixed Charges" and such other captions as the Initial
Purchaser may reasonably request in the Offering Memorandum, the information
included or incorporated in Items 1, 5, 6, 7, 11 and 13 of the Company's most
recent Annual Report on Form 10-K, incorporated in the Offering Memorandum,
agrees with the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.
(d) At Closing Time, counsel for the Initial Purchaser shall
have been furnished with the Registration Rights Agreement, executed by the
Company and the Trust, and such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and sale of
the Series A Capital Securities as herein contemplated and related proceedings,
or in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions herein contained; and
all proceedings taken by the Offerors in connection with the issuance and sale
of the Series A Capital Securities as herein contemplated shall be satisfactory
in form and substance to the Initial Purchaser and counsel for the Initial
Purchaser.
(e) At Closing Time, the Series A Capital Securities shall be
"rated BBB-" or higher by Standard & Poor's Corporation ("S&P") or "Baa3" or
higher by Moody's Investors Services ("Moody's") and the Trust shall have
delivered to the Initial Purchaser a letter, dated the Closing Time, from S&P
or Moody's, or other evidence satisfactory to the Initial Purchaser, confirming
that the Series A Capital Securities have such ratings; and there shall not
have occurred any decrease in the ratings of the Series A Capital Securities
or any other security of the Company by either S&P or Moody's and neither S&P
nor Moody's shall have publicly announced that it has under surveillance or
review its rating of the Series A Capital Securities or any other security of
the Company; it being understood that the negative outlook in existence as of
the date hereof with respect to certain of the debt securities of the Company
shall not be deemed to be such a public announcement.
If any condition specified in this Section 5 shall not have
been fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Initial Purchaser by notice to the Offerors at any time at
or prior to Closing Time, and such termination shall be without liability of
any party to any other party except as provided in Section 4 and except that
Sections 7 and 9 shall survive any such termination and remain in full force
and effect.
SECTION 6. Subsequent Offers and Sales of the Series A Capital Securities.
(a) Offer and Sale Procedures. The Initial Purchaser and the
Offerors hereby establish and agree to observe the following procedures in
connection with the offer and sale of the Series A Securities:
(i) Offers and Sales Only to Institutional Accredited
Investors and Qualified Institutional Buyers. Offers and sales of the Series A
Capital Securities will be made only by the Initial Purchaser or an affiliate
thereof qualified to do so in the jurisdictions in which such offers or sales
are made. Each such offer or sale shall only be made (A) to persons whom the
offeror or seller reasonably believes to be qualified institutional buyers
(as defined in Rule 144A under the 1933 Act) ("Qualified Institutional
Buyers") or (B) to a limited number of other institutional accredited
investors (as such term is defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D) that the Initial Purchaser reasonably believe to be and, with
respect to sales and deliveries, that are accredited investors
("Institutional Accredited Investors").
(ii) No General Solicitation. The Series A Capital
Securities will be offered by approaching prospective Subsequent Purchasers on
an individual basis. No general solicitation or general advertising (within the
meaning of Rule 502(c) under the 1933 Act) will be used in connection with the
offering of the Series A Capital Securities.
(iii) Purchases by Non-Bank Fiduciaries. In the case of a
non-bank Subsequent Purchaser of a Series A Capital Security acting as a
fiduciary for one or more third parties, in connection with an offer and sale
to such purchaser pursuant to clause (a) above, each third party shall, in the
judgment of the Initial Purchaser, be an Institutional Accredited Investor or
a Qualified Institutional Buyer.
(iv) Subsequent Purchaser Notification. The Initial
Purchaser will take reasonable steps to inform, and cause each of its U.S.
affiliates to take reasonable steps to inform, persons acquiring Series A
Capital Securities from such Initial Purchaser or affiliate, as the case may
be, that the Series A Capital Securities (A) have not been and will not be
registered under the 1933 Act, (B) are being sold to them without registration
under the 1933 Act in reliance on Rule 144A or in accordance with another
exemption from registration under the 1933 Act, as the case may be, and (C) may
not be offered, sold or otherwise transferred except (1) to the Company and
(2) in accordance with (x) Rule 144A to a person whom the seller reasonably
believes is a Qualified Institutional Buyer that is purchasing such Securities
for its own account or for the account of a Qualified Institutional Buyer to
whom notice is given that the offer, sale or transfer is being made in reliance
on Rule 144A or (y) an exemption from registration under the 1933 Act
(including the exemption provided by Rule 144), if available.
(v) Minimum Amount. No sale of the Series A Capital
Securities to any one Subsequent Purchaser will be in blocks of less than
U.S.$100,000 liquidation amount.
(vi) Restrictions on Transfer. The transfer restrictions
and the other provisions of the Declaration, including the legend required
thereby, shall apply to the Series A Capital Securities except as otherwise
agreed by the Offerors and the Initial Purchaser. Following the sale of the
Series A Capital Securities by the Initial Purchaser to Subsequent Purchasers
pursuant to the terms hereof, the Initial Purchaser shall not be liable or
responsible to the Offerors for any losses, damages or liabilities suffered or
incurred by the Offerors, including any losses, damages or liabilities under
the 1933 Act, arising from or relating to any resale or transfer of any Capital
Security.
(vii) Delivery of Offering Memorandum. The Initial
Purchaser will deliver to each purchaser of the Series A Capital Securities
from the Initial Purchaser, in connection with its original distribution of the
Series A Capital Securities, a copy of the Offering Memorandum, as amended and
supplemented at the date of such delivery.
(b) Covenants of the Offerors. Each of the Offerors, jointly
and severally, covenants with the Initial Purchaser as follows:
(i) Due Diligence. In connection with the original
distribution of the Series A Capital Securities, the Offerors agree that, prior
to any offer or sale of the Series A Capital Securities by the Initial
Purchaser, the Initial Purchaser and counsel for the Initial Purchaser shall
have the right to make reasonable inquiries into the business of the Trust, the
Company and its subsidiaries. The Offerors also agree to provide answers to
inquiries from each prospective Subsequent Purchaser of Series A Capital
Securities who so requests concerning the Trust, Company and its subsidiaries
(to the extent that such information is available or can be acquired and made
available to each prospective Subsequent Purchaser without unreasonable effort
or expense and to the extent the provision thereof is not prohibited by
applicable law or contractual restriction) and the terms and conditions of the
offering of the Securities, as provided in the Offering Memorandum.
(ii) Integration. The Offerors agree that they will not and
will cause their affiliates not to make any offer or sale of securities of the
Offerors of any class if, as a result of the doctrine of "integration" referred
to in Rule 502 under the 1933 Act, such offer or sale would render invalid (for
the purpose of (i) the sale of the Series A Capital Securities by the Trust to
the Initial Purchaser, (ii) the resale of the Series A Capital Securities by
the Initial Purchaser to Subsequent Purchasers or (iii) the resale of the
Series A Capital Securities by such Subsequent Purchasers to others) the
exemption from the registration requirements of the 1933 Act provided by
Section 4(2) thereof or by Rule 144A thereunder,
(iii) Rule 144A Information. The Company agrees that, in
order to render the Series A Capital Securities eligible for resale pursuant to
Rule 144A under the 1933 Act, while any of the Series A Capital Securities
remain outstanding, the Company will make available, upon request, to any
holder of Series A Capital Securities or prospective purchasers of Series A
Capital Securities the information specified in Rule 144A(d)(4), unless such
information is furnished to the Commission pursuant to Section 13 or 15(d) of
the 1934 Act (such information, whether made available to holders or
prospective purchasers or furnished to the Commission, is herein referred to
as "Additional Information").
(iv) Restriction on Repurchases. Until the expiration of
three years (or such shorter period as may hereafter be referred to in
Rule 144(k) (or similar successor rule)) after the original issuance of the
Series A Capital Securities, the Offerors will not, and will cause their
affiliates not to, purchase or agree to purchase or otherwise acquire any
Series A Capital Securities which are "restricted securities" (as such term is
defined under Rule 144(a)(3) under the 1933 Act), whether as beneficial owner,
or otherwise unless, immediately upon any such purchase, the Offerors or any
affiliate shall submit such Series A Capital Securities to the Trustee for
cancellation; provided, that any affiliate which is an insurance company need
not deliver such securities to the Trustee for cancellation for so long as
such affiliate continues to hold such Series A Capital Securities for its own
account.
(c) Resale Pursuant to Rule 144A. The Initial Purchaser
understands that the Series A Capital Securities have not been and will not be
registered under the 1933 Act and may not be offered or sold except pursuant to
an exemption from the registration requirements of the 1933 Act. The Initial
Purchaser represents and agrees, that, except as permitted below, it has
offered and sold Series A Capital Securities and will offer and sell Series A
Capital Securities (i) as part of their distribution at any time and (ii)
otherwise until forty days after the later of the date upon which the
offering of the Series A Capital Securities commences and the Closing Time,
only in accordance with Rule 144A under the 1933 Act or to Institutional
Accredited Investors. Accordingly, neither the Initial Purchaser and its
affiliates nor any persons acting on their behalf have engaged or will engage
in any directed selling efforts with respect to Series A Capital Securities.
The Initial Purchaser represents and agrees that it has not entered and will
not enter into any contractual arrangements with respect to the distribution
of the Series A Capital Securities, except with its affiliates that are
Qualified Institutional Buyers or with the prior written consent of the
Offerors.
(d) Compliance with Other Laws. The Initial Purchaser
acknowledges that no action has been taken to permit a public offering of the
Series A Capital Securities in any jurisdiction outside of the United States
where action would be required for such purpose.
(e) No Offers or Sales outside the United States. The Initial
Purchaser agrees that it will not offer or sell any Series A Capital
Securities in any jurisdiction outside of the United States.
SECTION 7. Indemnification.
(a) The Offerors agree to jointly and severally indemnify and
hold harmless the Initial Purchaser and each person, if any, who controls any
Initial Purchaser within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of an untrue statement or alleged
untrue statement of a material fact contained in the Offering Memorandum, or
the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with the
written consent of the Offerors; and
(iii) against any and all expenses whatsoever, as incurred
(including fees and disbursements of counsel chosen by you), reasonably
incurred in investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent
that any such expense is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement does not apply to any
loss, liability, claim, damage or expense to the extent arising out of an
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Offerors by the Initial Purchaser expressly for use in the Offering
Memorandum;
(b) The Initial Purchaser severally agrees to indemnify and
hold harmless the Company, its directors and officers, the Trust, the
Administrative Trustees and each person, if any, who controls the Company or
the Trust within the meaning of Section 15 of the 1933 Act, against any and
all loss, liability, claim, damage and expense described in the indemnity
agreement in Section 7(a), as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in
the Offering Memorandum in reliance upon and in conformity with written
information furnished to the Company or the Trust by the Initial Purchaser
expressly for use in the Offering Memorandum.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of such action. In no event
shall the indemnifying party or parties be liable for the fees and expenses
of more than one counsel for all indemnified parties in connection with any
one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
(d) If at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 7(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement; provided
that an indemnifying party shall not be liable for any such settlement
effected without its consent if such indemnifying party (1) reimburses such
indemnified party in accordance with such request to the extent it considers
reasonable and (2) provides written notice to the indemnified party
substantiating the unpaid balance as unreasonable, in each case prior to the
date of such settlement.
SECTION 8. Contribution. In order to provide for just and equitable
contribution in circumstances under which the indemnity provided for in
Section 7 is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Offerors and the
Initial Purchaser shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
the Company, the Trust and the Initial Purchaser, as is incurred, in such
proportions that (a) the Initial Purchaser is responsible for the amount
represented by the total commission for the Initial Purchaser appearing on
the cover page of the Offering Memorandum, it being understood that such
amount shall not include any amounts received by the Initial Purchaser with
respect to the payment or reimbursement of any expenses or fees, including
attorney's fees and, (b) the Offerors are responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as the Initial Purchaser, and
each officer and director of the Company, each Administrative Trustee and
each person, if any, who controls the Company or the Trust within the meaning
of Section 15 of the 1933 Act shall have the same rights to contribution as
the Company and the Trust.
SECTION 9. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or trustees of the
Trust submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any Initial
Purchaser or controlling person, or by or on behalf of the Trust or the
Company, and shall survive delivery of the Series A Capital Securities to the
Initial Purchaser.
SECTION 10. Termination of Agreement.
(a) Termination; General. The Initial Purchaser may terminate
this Agreement, by notice to the Offerors, at any time at or prior to the
Closing Time (i) if there has occurred any material adverse change in the
financial markets in the United States or any outbreak of hostilities or
escalation thereof or other calamity or crisis the effect of which is such as
to make it, in your judgment, impracticable to market the Series A Capital
Securities or to enforce contracts for the sale of the Series A Capital
Securities, or (ii) if trading in any securities of the Company has been
suspended by the Commission or the New York Stock Exchange, or if trading
generally on either the American Stock Exchange or the New York Stock Exchange
or in the over-the-counter market has been suspended, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for securities
have been required, by any of such exchange or such system or by order of the
Commission or any other governmental authority or (iii) if a banking
moratorium has been declared by either federal, New York, Delaware or Iowa
authorities, or (iv) if there has been, since the date hereof or since the
respective dates as of which information is given in the Offering Memorandum,
any material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Trust or the
Company and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business.
(b) Liabilities. If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 7 and 8 shall survive such termination and remain in full force
and effect.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the Initial Purchaser shall be
directed to the Initial Purchaser c/o Merrill Lynch at 5500 Sears Tower,
Chicago, Illinois 60606, attention of David C. Sherwood, Director, with a
copy to LeBoeuf, Lamb, Greene & MacRae, L.L.P., 125 West 55th Street, New
York, New York 10019, Attention of Michael Groll, Esq.; notices to the
Offerors shall be directed to Equitable of Iowa Companies, 604 Locust Street,
P.O. Box 1635, Des Moines, Iowa 50306-1635, attention of Secretary/General
Counsel, with a copy to Nyemaster, Goode, McLaughlin, Voigts, West, Hansell &
O'Brien, P.C., 1900 Hub Tower, Des Moines, Iowa 50309, Attention of G.R.
Neumann, Esq.
SECTION 12. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Initial Purchaser and the Offerors and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchaser and the Offerors and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and
8 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Initial Purchaser
and the Offerors and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from the Initial Purchaser shall be deemed to be a successor by
reason merely of such purchase.
SECTION 13. Governing Law and Time. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable
to agreements made and to be performed in said State. Specified times of day
refer to New York City time unless otherwise indicated.
SECTION 14. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
Agreement between the Initial Purchaser and the Offerors in accordance with
its terms.
Very truly yours,
EQUITABLE OF IOWA COMPANIES
By: /s/ Paul E. Larson
_______________________________
Name: Paul E. Larson
Title: Executive Vice President
and Chief Financial Officer
EQUITABLE OF IOWA COMPANIES CAPITAL
TRUST II
By: /s/ Paul E. Larson
_______________________________
Title: Administrative Trustee
By: /s/ Fred S. Hubbell
_______________________________
Title: Administrative Trustee
By: /s/ John A. Merriman
_______________________________
Title: Administrative Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By:/s/ John P. Tullsen, Jr.
__________________________________
Authorized Signatory
EXHIBIT 4.1
EQUITABLE OF IOWA COMPANIES
______________________________________________________________________________
INDENTURE
Dated as of March 31, 1997
______________________________________________________________________________
The First National Bank of Chicago
as Trustee
______________________________________________________________________________
SUBORDINATED DEFERRABLE INTEREST DEBENTURES
CROSS REFERENCE SHEET
Showing the location of the provisions of the Trust Indenture Act of 1939 in
the Indenture dated as of March 31, 1997, between Equitable of Iowa Companies
and The First National Bank of Chicago, as Trustee:
ACT SECTION INDENTURE SECTION
310(a)(1) 6.09
(a)(2) 6.09
310(a)(3) N/A
(a)(4) N/A
310(a)(5) 6.09
310(b) 6.08, 6.10
310(c) N/A
311(a) and (b) 6.13
311(c) N/A
312(a) 4.01, 4.02(a)
312(b) and (c) 4.02(b), 4.02(c)
313(a) 4.04
313(b)(1) 4.04
313(b)(2) 4.04
313(c) 4.04
313(d) 4.04
314(a) 3.05
314(b) N/A
314(c)(1) and (2) 6.07, 13.06
314(c)(3) N/A
314(d) N/A
314(e) 13.06
314(f) N/A
315(a)(c) and (d) 6.01
315(b) 5.08
315(e) 5.09
316(a)(1) 5.07
316(a)(2) N/A
316(a) last sentence 7.04
316(b) 5.04
317(a) 5.05
317(b) 6.05
318(a) 13.08
______________________________________________________________________________
THIS CROSS REFERENCE SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
TABLE OF CONTENTS
ARTICLE I
___________
DEFINITIONS
SECTION 1.01. Definitions
Additional Interest
Adjusted Treasury Rate
Administrative Trustees
Affiliate
Authenticating Agent
Board of Directors
Board Resolution
Business Day
Capital Securities
Capital Securities Guarantee
Commission
Common Securities
Common Securities Guarantee
Company
Company Request/Company Order
Comparable Treasury Issue
Comparable Treasury Price
Compounded Interest
Declaration
Default
Deferred Interest
Definitive Securities
Delaware Trustee
Depositary
Direct Action
Dissolution Event
Distributions
Event of Default
Exchange Act
Exchange Offer
Extended Interest Payment Period
______________________________________________________________________________
THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED
TO BE PART OF THE INDENTURE.
Global Security
Indebtedness
Indebtedness Ranking Junior to the
Securities
Indebtedness Ranking on a Parity with
the Securities
Indenture
Interest Payment Date
Investment Company Event
Issue Date
Junior Subordinated Payment
Liquidated Damages
Maturity Date
Non Book-Entry Capital Securities
Officers
Officers' Certificate
Opinion of Counsel
Other Debentures
Other Guarantees
Outstanding
Person
Predecessor Security
Principal Office of the Trustee
Property Trustee
Purchase Agreement
Quotation Agent
Reference Treasury Dealer
Reference Treasury Dealer Quotations
Registration Rights Agreement
Responsible Officer
Restricted Security
Rule 144A
Securities
Securities Act
Securityholder/holder of Securities
Security Register
Senior Indebtedness
Series A Capital Securities
Series B Capital Securities
Series A Securities
Series B Securities
Special Event
Special Event Prepayment Price
Subsidiary
Tax Event
Trust
Trustee
Trust Indenture Act
Trust Securities
U.S. Government Obligations
ARTICLE II
__________
SECURITIES
SECTION 2.01. Designation and Forms Generally
SECTION 2.02. Execution and Authentication
SECTION 2.03. Form and Payment
SECTION 2.04. Legends
SECTION 2.05. Global Security
SECTION 2.06. Interest
SECTION 2.07. Transfer Restrictions; Transfer and Exchange
SECTION 2.08. Replacement Securities
SECTION 2.09. Ranking
SECTION 2.10. Temporary Securities
SECTION 2.11. Cancellation
SECTION 2.12. Defaulted Interest
SECTION 2.13. CUSIP Numbers
SECTION 2.14 Appointment of Trustee
ARTICLE III
___________
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium and Interest
SECTION 3.02. Offices for Notices and Payments, etc
SECTION 3.03. Appointments to Fill Vacancies in Trustee's
Office
SECTION 3.04. Provision as to Paying Agent
SECTION 3.05. Certificate to Trustee
SECTION 3.06. [Reserved]
SECTION 3.07. Limitation on Dividends and Payments
SECTION 3.08. Covenants as to the Trust
SECTION 3.09. Payment of Expenses
SECTION 3.10. Payment Upon Resignation or Removal
ARTICLE IV
__________
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists
SECTION 4.02. Preservation and Disclosure of Lists
SECTION 4.03. Reports by the Company
SECTION 4.04. Reports by the Trustee
ARTICLE V
_________
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.01. Events of Default
SECTION 5.02. Payment of Securities on Default; Suit
Therefor
SECTION 5.03. Application of Moneys Collected by Trustee
SECTION 5.04. Proceedings by Securityholders
SECTION 5.05. Proceedings by Trustee
SECTION 5.06. Remedies Cumulative and Continuing
SECTION 5.07. Direction of Proceedings and Waiver of
Defaults by Majority of Securityholders
SECTION 5.08. Notice of Defaults
SECTION 5.09. Undertaking to Pay Costs
ARTICLE VI
__________
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee
SECTION 6.02. Reliance on Documents, Opinions, etc
SECTION 6.03. No Responsibility for Recitals, etc
SECTION 6.04. Trustee, Authenticating Agent, Paying
Agents, Transfer Agents or Registrar May
Own Securities
SECTION 6.05. Moneys to Be Held in Trust
SECTION 6.06. Compensation and Expenses of Trustee
SECTION 6.07. Officers' Certificate as Evidence
SECTION 6.08. Conflicting Interest of Trustee
SECTION 6.09. Eligibility of Trustee
SECTION 6.10. Resignation or Removal of Trustee
SECTION 6.11. Acceptance by Successor Trustee
SECTION 6.12. Succession by Merger, etc
SECTION 6.13. Limitation on Rights of Trustee as a
Creditor
SECTION 6.14. Authenticating Agents
ARTICLE VII
___________
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders
SECTION 7.02. Proof of Execution by Securityholders
SECTION 7.03. Who Are Deemed Absolute Owners
SECTION 7.04. Securities Owned by Company Deemed Not
Outstanding
SECTION 7.05. Revocation of Consents; Future Holders
Bound
ARTICLE VIII
____________
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings
SECTION 8.02. Call of Meetings by Trustee
SECTION 8.03. Call of Meetings by Company or
Securityholders
SECTION 8.04. Qualifications for Voting
SECTION 8.05. Regulations
SECTION 8.06. Voting
ARTICLE IX
__________
AMENDMENTS
SECTION 9.01. Without Consent of Securityholders
SECTION 9.02. With Consent of Securityholders
SECTION 9.03. Compliance with Trust Indenture Act;
Effect of Supplemental Indentures
SECTION 9.04. Notation on Securities
SECTION 9.05. Evidence of Compliance of Supplemental
Indenture to Be Furnished Trustee
ARTICLE X
_________
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., Only on
Certain Terms
SECTION 10.02. Successor Person Substituted
ARTICLE XI
__________
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture
SECTION 11.02. Deposited Moneys and U.S. Government
Obligations to Be Held in Trust by Trustee
SECTION 11.03. Paying Agent to Repay Moneys Held
SECTION 11.04. Return of Unclaimed Moneys
SECTION 11.05. Defeasance Upon Deposit of Moneys or U.S.
Government Obligations
ARTICLE XII
___________
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Securities Solely Corporate
Obligations
ARTICLE XIII
____________
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors
SECTION 13.02. Official Acts by Successor Corporation
SECTION 13.03. Surrender of Company Powers
SECTION 13.04. Addresses for Notices, etc
SECTION 13.05. Governing Law
SECTION 13.06. Evidence of Compliance with Conditions
Precedent
SECTION 13.07. Business Days
SECTION 13.08. Trust Indenture Act to Control
SECTION 13.09. Table of Contents, Headings, etc
SECTION 13.10. Execution in Counterparts
SECTION 13.11. Separability
SECTION 13.12. Assignment
ARTICLE XIV
___________
PREPAYMENT OF SECURITIES -- SINKING FUND
SECTION 14.01. Special Event Prepayment
SECTION 14.02. [Reserved]
SECTION 14.03. No Sinking Fund
SECTION 14.04. Notice of Prepayment
SECTION 14.05. Payment of Securities Called for Prepayment
ARTICLE XV
__________
SUBORDINATION OF SECURITIES
SECTION 15.01. Agreement to Subordinate
SECTION 15.02. Default on Senior Indebtedness
SECTION 15.03. Prior Payment to Senior Indebtedness Upon
Acceleration of Securities
SECTION 15.04. Liquidation; Dissolution; Bankruptcy
SECTION 15.05. Subrogation
SECTION 15.06. Trustee to Effectuate Subordination
SECTION 15.07. Notice by the Company
SECTION 15.08. Rights of the Trustee; Holders of Senior
Indebtedness
SECTION 15.09. Subordination May Not Be Impaired
SECTION 15.10. Article Applicable to Paying Agents
ARTICLE XVI
___________
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 16.01. Extension of Interest Payment Period
SECTION 16.02. Notice of Extension
THIS INDENTURE, dated as of March 31, 1997, between Equitable of Iowa
Companies, an Iowa corporation (hereinafter sometimes called the "Company"),
and The First National Bank of Chicago, a national banking association, as
trustee (hereinafter sometimes called the "Trustee").
W I T N E S S E T H :
In consideration of the premises, and the purchase of the Securities by
the holders thereof, the Company covenants and agrees with the Trustee for
the equal and proportionate benefit of the respective holders from time to
time of the Securities, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes
of this Indenture shall have the respective meanings specified in this
Section 1.01. All other terms used in this Indenture which are defined in
the Trust Indenture Act, or which are by reference therein defined in the
Securities Act, shall (except as herein otherwise expressly provided or
unless the context otherwise requires) have the meanings assigned to such
terms in said Trust Indenture Act and in said Securities Act as in force at
the date of this Indenture as originally executed. All accounting terms
used herein and not expressly defined shall have the meanings assigned to
such terms in accordance with generally accepted accounting principles and
the term "generally accepted accounting principles" means such accounting
principles as are generally accepted at the time of any computation. The
words "herein", "hereof" and "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section
or other subdivision. Headings are used for convenience of reference only
and do not affect interpretation. The singular includes the plural and vice
versa.
"Additional Interest" shall have the meaning set forth in Section
2.06(c).
"Adjusted Treasury Rate" means, with respect to any prepayment date, the
rate per annum equal to (i) the yield, under the heading which represents the
average for the immediately prior week, appearing in the most recently
published statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Federal Reserve Board and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Maturity Date (if no maturity is within
three months before or after the Maturity Date, yields for the two published
maturities most closely corresponding to the Maturity Date shall be inter-
polated, and the Adjusted Treasury Rate shall be interpolated or extrapolated
from such yields on a straight-line basis, rounding to the nearest month) or
(ii) if such release (or any successor release) is not published during the
week preceding the calculation date or does not contain such yields, the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to
the Comparable Treasury Price for such prepayment date, in each case calculated
on the third Business Day preceding the prepayment date, plus in each case (a)
1.05% if such prepayment date occurs on or prior to April 2, 1998, and (b) .50%
in all other cases.
"Administrative Trustees" shall have the same meaning as set forth in
the Declaration.
"Affiliate" means, with respect to a specified Person, any Person
directly or indirectly controlling, controlled by, or under common control
with the specified Person. For the purposes of this definition, "control"
when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" shall mean any agent or agents of the Trustee
which at the time shall be appointed and acting pursuant to Section 6.14.
"Board of Directors" shall mean either the Board of Directors of the
Company or any duly authorized committee of that board.
"Board Resolution" shall mean a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Business Day" shall mean, with respect to any series of Securities, any
day other than a Saturday or a Sunday or a day on which banking institutions
in New York, New York are authorized or required by law or executive order
to close.
"Capital Securities" shall mean the 8.424% Capital Securities of the
Trust, each having a stated liquidation amount of $1,000, and representing
preferred undivided beneficial interests in the assets of the Trust.
References to "Capital Securities" shall include collectively any Series A
Capital Securities and Series B Capital Securities.
"Capital Securities Guarantee" shall mean any guarantee that the Company
may enter into with The First National Bank of Chicago, as guarantee trustee,
or other Persons that operates directly or indirectly for the benefit of
holders of Capital Securities of the Trust and shall include a Series A
Capital Securities Guarantee and a Series B Capital Securities Guarantee with
respect to the Series A Capital Securities and the Series B Capital
Securities, respectively.
"Commission" shall mean the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Common Securities" shall mean common undivided beneficial interests in
the assets of the Trust.
"Common Securities Guarantee" shall mean any guarantee that the Company
may enter into with any Person or Persons that operates directly or
indirectly for the benefit of holders of Common Securities of the Trust.
"Company" shall mean Equitable of Iowa Companies, an Iowa corporation,
and, subject to the provisions of Article X, shall include its successors and
assigns.
"Company Request" or " Company Order" shall mean a written request or
order signed in the name of the Company by the Chairman, the Chief Executive
Officer, the President, a Vice Chairman, a Vice President, the Secretary or
an Assistant Secretary of the Company, and delivered to the Trustee.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity date comparable to the
Maturity Date 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 with the Maturity Date. If
no United States Treasury security has a maturity date which is within a
period from three months before to three months after the Maturity Date, the
two most closely corresponding United States Treasury securities shall be
used as the Comparable Treasury Issue, and the Adjusted Treasury Rate shall
be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month.
"Comparable Treasury Price" means, with respect to any prepayment date
pursuant to Section 14.01, (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 prepayment date,
as set forth in the daily statistical release (or any successor release)
published by the Federal Reserve Bank of New York and designated "Composite
3:30 p.m. Quotations for U.S. Government Securities" or (ii) if such release
(or any successor release) is not published or does not contain such prices
on such Business Day, (A) the average of five Reference Treasury Dealer
Quotations for such prepayment date, after excluding the highest and lowest
such Reference Treasury Dealer Quotations, or (B) if the Trustee obtains
fewer than three such Reference Treasury Dealer Quotations, the average of
all such quotations.
"Compounded Interest" shall have the meaning set forth in Section 16.01.
"Declaration" means the Amended and Restated Declaration of Trust of the
Trust, dated as of March 31, 1997.
"Default" means any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Deferred Interest" shall have the meaning set forth in Section 16.01.
"Definitive Securities" shall mean those Securities issued in fully -
registered, certificated form not otherwise in global form.
"Delaware Trustee" shall have the same meaning as set forth in the
Declaration.
"Depositary" shall mean, with respect to Securities of any series for
which the Company shall determine that such Securities will be issued as a
Global Security, The Depository Trust Company, New York, New York, another
clearing agency or any successor registered as a clearing agency under the
Exchange Act or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to Section 2.05.
"Direct Action" shall have the meaning set forth in Section 5.04.
"Dissolution Event" means the liquidation of the Trust pursuant to the
Declaration, and the distribution of the Securities held by the Property
Trustee to the holders of the Trust Securities issued by the Trust pro rata
in accordance with the Declaration.
"Distributions" shall have the same meaning as set forth in the
Declaration.
"Event of Default" shall mean any event specified in Section 5.01,
continued for the period of time, if any, and after the giving of the notice,
if any, therein designated.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement (i) by the Company to exchange Series B
Securities for Series A Securities and to exchange a Series B Capital
Securities Guarantee for a Series A Capital Securities Guarantee and (ii) by
the Trust to exchange Series B Capital Securities for Series A Capital
Securities.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 16.01.
"Global Security" means, with respect to the Securities of any series, a
Security executed by the Company and delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction, all in accordance
with the Indenture, which shall be registered in the name of the Depositary
or its nominee.
"Indebtedness" shall mean (i) any obligation of, or any obligation
guaranteed by, the Company for which the Company is responsible or liable as
obligor or otherwise including principal, premium and interest (whether
accruing before or after filing of any petition in bankruptcy or any similar
proceedings by or against the Company and whether or not allowed as a claim
in bankruptcy or similar proceedings) for (A) indebtedness of the Company for
money borrowed, (B) indebtedness evidenced by securities, bonds, debentures,
notes or other similar written instruments, (C) any deferred obligation for
the payment of the purchase price or conditional sale obligation of property
or assets acquired other than in the ordinary course of business, (D) all
obligations of the Company for the reimbursement of any letter of credit,
banker's acceptance, security purchase facility or similar credit transaction,
(E) all obligations of the Company under "keep-well" agreements required by
insurance regulators or (F) any obligation referred to in (A) through (E) above
of other persons secured by any lien on any property or asset of the Company
and (ii) all indebtedness of the Company for obligations of the Company to make
payment in respect of derivative products such as interest and foreign exchange
rate contracts, commodity contracts (including future or options contracts),
swap agreements, cap agreements, repurchase and reverse repurchase agreements
and similar arrangements, whether outstanding on the date of execution of this
Indenture or thereafter created, assumed or incurred.
"Indebtedness Ranking Junior to the Securities" shall mean any
Indebtedness, whether outstanding on the date of execution of this Indenture
or thereafter created, assumed or incurred, which specifically by its terms
is subordinated and ranks junior to and not equally with or prior to the
Securities (and any other Indebtedness Ranking on a Parity with the
Securities) in right of payment upon the happening of any dissolution or
winding up or liquidation or reorganization or similar events of the Company.
The securing of any Indebtedness, otherwise constituting Indebtedness
Ranking Junior to the Securities, shall not be deemed to prevent such
Indebtedness from constituting Indebtedness Ranking Junior to the
Securities.
"Indebtedness Ranking on a Parity with the Securities" shall mean (i)
Indebtedness, whether outstanding on the date of execution of this Indenture
or thereafter created, assumed or incurred, which specifically by its terms
ranks equally with and not prior to the Securities in the right of payment
upon the happening of any dissolution or winding up or liquidation or
reorganization or similar events of the Company, and (ii) Indebtedness
represented by the Other Debentures. The securing of any Indebtedness,
otherwise constituting Indebtedness Ranking on a Parity with the Securities,
shall not be deemed to prevent such Indebtedness from constituting
Indebtedness Ranking on a Parity with the Securities.
"Indenture" shall mean this instrument as originally executed or, if
amended as herein provided, as so amended.
"Interest Payment Date" shall have the meaning set forth in Section 2.06.
"Investment Company Event" means the receipt by the Administrative
Trustees of an opinion of counsel to the Company experienced in such matters
to the effect that, as a result of the occurrence of any amendment to, or
change in law or regulation or a written change (including any announced
prospective change) in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority,
there is more than an insubstantial risk that the Trust is or will be
considered an "investment company" that is required to be registered under
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), which amendment, change or prospective change becomes effective or
would become effective, as the case may be, on or after the date of the
offering memorandum pursuant to which the Capital Securities are being
offered.
"Issue Date" means April 3, 1997.
"Junior Subordinated Payment" shall have the meaning set forth in
Section 15.04.
"Liquidated Damages" shall have the meaning set forth in the
Registration Rights Agreement.
"Maturity Date" shall mean April 1, 2027.
"Non Book-Entry Capital Securities" shall have the meaning set forth in
Section 2.05.
"Officers" shall mean any of the Chairman, a Vice Chairman, the Chief
Executive Officer, the President, a Vice President, the Comptroller, the
Secretary or an Assistant Secretary of the Company.
"Officers' Certificate" shall mean a certificate signed by two Officers
and delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion, acceptable to the
Trustee, of counsel, who may be an employee of the Company, and who shall be
acceptable to the Trustee.
"Other Debentures" means all subordinated debentures issued, or to be
issued, by the Company to trusts established, or to be established, by the
Company, in each case similar to the Trust, including, without limitation,
the 8.70% Subordinated Deferrable Interest Debentures due July 30, 2026 in
the principal amount of $128,866,000 issued by the Company on July 23, 1996
to Equitable of Iowa Companies Capital Trust.
"Other Guarantees" means all guarantees issued, or to be issued, by the
Company with respect to securities similar to the Capital Securities issued
by trusts established, or to be established, by the Company, in each case
similar to the Trust, including, without limitation, the Preferred Securities
Guarantee Agreement with respect to $125,000,000 of 8.70% Trust Originated
Preferred Securities due July 30, 2026 issued by Equitable of Iowa Companies
Capital Trust on July 23, 1996.
The term "outstanding", when used with reference to Securities, shall,
subject to the provisions of Section 7.04, mean, as of any particular time,
all Securities authenticated and delivered by the Trustee or the
Authenticating Agent under this Indenture, except
(a) Securities theretofore canceled by the Trustee or the
Authenticating Agent or delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or prepayment of
which moneys in the necessary amount shall have been deposited in trust with
the Trustee or with any paying agent (other than the Company) or shall have
been set aside and segregated in trust by the Company (if the Company shall
act as its own paying agent); provided that, if such Securities, or portions
thereof, are to be prepaid prior to maturity thereof, notice of such
prepayment shall have been given as in Article XIV provided, or provision
satisfactory to the Trustee shall have been made for giving such notice; and
(c) Securities in lieu of or in substitution for which other Securities
shall have been authenticated and delivered pursuant to the terms of Section
2.08 unless proof satisfactory to the Company and the Trustee is presented
that any such Securities are held by bona fide holders in due course.
"Person" shall mean any individual, corporation, estate, partnership,
joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 2.08 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
"Principal Office of the Trustee", or other similar term, shall mean the
office of the Trustee, at which at any particular time its corporate trust
business shall be principally administered, which office on the date hereof
is located at One First National Plaza - Suite 0126, Chicago, Illinois 60670-
0126; Attention: Corporate Trust Services Division.
"Property Trustee" shall have the same meaning as set forth in the
Declaration.
"Purchase Agreement" shall mean the Purchase Agreement dated March 31,
1997, among the Company, the Trust and the initial purchaser named therein.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"Reference Treasury Dealer" means (i) Merrill Lynch Government
Securities, Inc. and its successors; provided, however, that if the foregoing
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, and (ii) any other Primary Treasury Dealer
selected by the Trustee after consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date pursuant to Section 14.01,
the average, as determined by the Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m. New York City time on the third Business Day preceding
such prepayment date.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the Issue Date, by and among the Company, the Trust and the
initial purchaser named therein as such agreement may be amended, modified or
supplemented from time to time.
"Responsible Officer", when used with respect to the Trustee, shall mean
any officer within the Principal Office of the Trustee, including any vice
president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer or senior trust officer,
any trust officer or assistant trust officer, or any other officer or
assistant officer of the 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 his or her knowledge of and familiarity
with the particular subject.
"Restricted Security" shall mean Securities that bear or are required to
bear the Securities Act legends set forth in Exhibit A hereto.
"Rule 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or under any similar rule or regulation
hereafter adopted by the Commission.
"Securities" means, collectively, the Series A Securities and the Series
B Securities.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securityholder", "holder of Securities", or other similar terms, shall
mean any person in whose name at the time a particular Security is registered
on the register kept by the Company or the Trustee for that purpose in
accordance with the terms hereof.
"Security Register" shall mean (i) prior to a Dissolution Event, the
list of holders provided to the Trustee pursuant to Section 4.01, and (ii)
following a Dissolution Event, any security register maintained by a security
registrar for the Securities appointed by the Company following the execution
of a supplemental indenture providing for transfer procedures as provided for
in Section 2.07(a).
"Senior Indebtedness" shall mean all Indebtedness, whether outstanding
on the date of execution of this Indenture or thereafter created, assumed or
incurred, except Indebtedness Ranking on a Parity with the Securities or
Indebtedness Ranking Junior to the Securities, and any deferrals,
modifications, renewals, refinancings or extensions of such Senior
Indebtedness.
"Series A Capital Securities" shall have the same meaning as set forth
in the Declaration.
"Series B Capital Securities" shall have the same meaning as set forth
in the Declaration.
"Series A Securities" means the Company's 8.424% Series A Subordinated
Deferrable Interest Debentures due April 1, 2027, as authenticated and issued
under this Indenture.
"Series B Securities" means the Company's 8.424% Series B Subordinated
Deferrable Interest Debentures due April 1, 2027, as authenticated and issued
under this Indenture.
"Special Event" means a Tax Event or an Investment Company Event, as the
case may be.
"Special Event Prepayment Price" shall mean, with respect to any
prepayment of the Securities pursuant to Section 14.01 hereof, an amount in
cash equal to the greater of (i) 100% of the principal amount prepaid, or
(ii) the sum, as determined by a Quotation Agent, of the present values of
the principal amount of such Securities, together with scheduled payments of
interest from the prepayment date to the Maturity Date, in each case
discounted to the prepayment date on a semi-annual basis (assuming a 360-day
year of twelve 30-day months) at the Adjusted Treasury Rate, plus, in each
case, any accrued and unpaid interest thereon, including Compounded Interest
and Additional Interest, if any, to the date of such prepayment.
"Subsidiary" shall mean, with respect to any Person, (i) any corporation
at least a majority of whose outstanding voting stock is owned, directly or
indirectly, by such Person or by one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries, (ii) any general partnership,
joint venture or similar entity, at least a majority of whose outstanding
partnership or similar interests shall at the time be owned by such Person,
or by one or more of its Subsidiaries, or by such Person and one or more of
its Subsidiaries and (iii) any limited partnership of which such Person or
any of its Subsidiaries is a general partner. For the purposes of this
definition, "voting stock" means shares, interests, participations or other
equivalents in the equity interest (however designated) in such Person having
ordinary voting power for the election of a majority of the directors (or the
equivalent) of such Person, other than shares, interests, participations or
other equivalents having such power only by reason of the occurrence of a
contingency.
"Tax Event" shall mean the receipt by the Administrative Trustees of an
opinion of independent tax counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, 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 official administrative pronouncement or judicial decision inter-
preting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after March
31, 1997, there is more than an insubstantial risk that (i) the Trust is, or
as a result of the issuance of Series B Securities would be, or will be
within 90 days of the date of such opinion, subject to United States federal
income tax with respect to income received or accrued on the Securities, (ii)
interest payable by the Company on the Securities is not, or upon the
issuance of any of the Series B Securities would not be, or within 90 days of
the date of such opinion, will not be, deductible by the Company, in whole or
in part, for United States federal income tax purposes, or (iii) the Trust
is, or will be within 90 days of the date of such opinion, subject to more
than a de minimis amount of other taxes, duties or other governmental
charges.
"Trust" shall mean Equitable of Iowa Companies Capital Trust II, a
Delaware business trust created for the purpose of issuing its undivided
beneficial interests in connection with the issuance of Securities under this
Indenture.
"Trustee" shall mean the Person identified as "Trustee" in the first
paragraph hereof, and, subject to the provisions of Article VI hereof, shall
also include its successors and assigns as Trustee hereunder. The term
"Trustee" as used with respect to a particular series of the Securities shall
mean the trustee with respect to that series.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939 as in
force at the date of execution of this Indenture, except as provided in
Section 9.03.
"Trust Securities" shall mean, collectively, the Capital Securities and
the Common Securities.
"U.S. Government Obligations" shall mean securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case
under clauses (i) or (ii) are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank
or trust company as custodian with respect to any such U.S. Government
Obligation or a specific payment of interest on or principal of any such U.S.
Government Obligation held by such custodian for the account of the holder of
a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific
payment of interest on or principal of the U.S. Government Obligation
evidenced by such depository receipt.
ARTICLE II
SECURITIES
SECTION 2.01. Designation and Forms Generally.
There is hereby authorized a series of securities designated the "8.424%
Series A Subordinated Deferrable Interest Debentures due April 1, 2027" and a
series of securities designated the "8.424% Series B Subordinated Deferrable
Interest Debentures due April 1, 2027". The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit
A, the terms of which are incorporated in and made a part of this Indenture.
The Securities may have notations, legends or endorsements required by law,
stock exchange rule, agreements to which the Company is subject or usage.
Each Security shall be dated the date of its authentication. The Securities
shall be issued in denominations of $1,000 and integral multiples thereof.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities for the Company by manual or
facsimile signature in the manner set forth in Exhibit A. If an Officer
whose signature is on a Security no longer holds that office at the time the
Security is authenticated, the Security shall nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of an authorized officer of the Trustee. The signature of the
Trustee shall be conclusive evidence that the Security has been authenticated
under this Indenture. The form of Trustee's certificate of authentication to
be borne by the Securities shall be substantially as set forth in Exhibit A
hereto.
The Trustee shall, upon a Company Order, authenticate for original issue
up to, and the aggregate principal amount of Securities outstanding at any
time may not exceed, the sum of $51,550,000 aggregate principal amount of the
Securities, except as provided in Sections 2.07, 2.08, 2.10 and 14.05. The
series of Securities to be initially issued hereunder shall be the Series A
Securities.
SECTION 2.03. Form and Payment.
Except as provided in Section 2.05, the Securities shall be issued in
fully - registered, certificated form without interest coupons. Principal
of, premium, if any, and interest on the Securities issued in certificated
form will be payable, the transfer of such Securities will be registrable and
such Securities will be exchangeable for Securities bearing identical terms
and provisions at the office or agency of the Company maintained for such
purpose under Section 3.02; provided, however, that payment of interest with
respect to the Securities may be made at the option of the Company (i) by
check mailed to the holder at such address as shall appear in the Security
Register or (ii) by transfer to an account maintained by the Person entitled
thereto, provided that proper transfer instructions have been received in
writing by the relevant record date. Notwithstanding the foregoing, so long
as the holder of any Securities is the Property Trustee, the payment of the
principal of, premium, if any, and interest (including Compounded Interest
and Additional Interest, if any) on such Securities held by the Property
Trustee will be made at such place and to such account as may be designated
by the Property Trustee. Payment of principal of the Securities shall only
be made upon surrender of the Securities to the Trustee or paying agent.
SECTION 2.04. Legends.
(a) Except as permitted by subsection (b) of this Section 2.04 or as
otherwise determined by the Company in accordance with applicable law, each
Security shall bear the applicable legends relating to restrictions on
transfer pursuant to the securities laws in substantially the form set forth
on Exhibit A hereto.
(b) The Company shall issue and the Trustee shall authenticate Series B
Securities in exchange for Series A Securities accepted for exchange in the
Exchange Offer, which Series B Securities shall not bear the legends required
by subsection (a) above, in each case unless the holder of such Series A
Securities is either (1) a broker-dealer who purchased such Series A
Securities directly from the Company for resale pursuant to Rule 144A or any
other available exemption under the Securities Act, (2) a Person
participating in the distribution of the Series A Securities or (3) a Person
who is an affiliate (as defined in Rule 144 under the Securities Act) of the
Company.
SECTION 2.05. Global Security.
(a) In connection with a Dissolution Event,
(i) if any Capital Securities are held in book-entry form, the
related Definitive Securities shall be presented to the Trustee
(if an arrangement with the Depositary has been maintained) by
the Property Trustee in exchange for one or more Global
Securities (as may be required pursuant to Section 2.07) in an
aggregate principal amount equal to the aggregate principal
amount of all outstanding Securities, to be registered in the
name of the Depositary, or its nominee, and delivered by the
Trustee to the Depositary for crediting to the accounts of its
participants pursuant to the instructions of the Administrative
Trustees; the Company upon any such presentation shall execute
one or more Global Securities in such aggregate principal amount
and deliver the same to the Trustee for authentication and
delivery in accordance with this Indenture; and payments on the
Securities issued as a Global Security will be made to the
Depositary; and
(ii) if any Capital Securities are held in non-book entry,
certificated form, the related Definitive Securities may be
presented to the Trustee by the Property Trustee and any
Capital Security certificate which represents Capital Securities
other than Capital Securities in book-entry form ("Non Book-
Entry Capital Securities") will be deemed to represent
beneficial interests in Securities presented to the Trustee by
the Property Trustee having an aggregate principal amount equal
to the aggregate liquidation amount of the Non Book-Entry
Capital Securities until such Capital Security certificates are
presented to the Security Registrar for transfer or reissuance,
at which time such Capital Security certificates will be
canceled and a Definitive Security, registered in the name of
the holder of the Capital Security certificate or the
transferee of the holder of such Capital Security certificate,
as the case may be, with an aggregate principal amount equal to
the aggregate liquidation amount of the Capital Security
certificate canceled, will be executed by the Company and
delivered to the Trustee for authentication and delivery in
accordance with the Indenture. Upon the issuance of such
Securities, Securities with an equivalent aggregate principal
amount that were presented by the Property Trustee to the
Trustee will be deemed to have been canceled.
(b) The Global Securities shall represent the aggregate amount of
outstanding Securities from time to time endorsed thereon; provided that the
aggregate amount of outstanding Securities represented thereby may from time
to time be reduced or increased, as appropriate, to reflect exchanges and
prepayments. Any endorsement of a Global Security to reflect the amount of
any increase or decrease in the amount of outstanding Securities represented
thereby shall be made by the Trustee, in accordance with instructions given
by the Company as required by this Section 2.05.
(c) The Global Securities may be transferred, in whole but not in part,
only to the Depositary, another nominee of the Depositary, or to a successor
Depositary selected or approved by the Company or to a nominee of such
successor Depositary.
(d) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or the Depositary has ceased to
be a clearing agency registered under the Exchange Act, and a successor
Depositary is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such condition, as the case may be,
the Company will execute, and the Trustee, upon written notice from the
Company, will authenticate and make available for delivery the Definitive
Securities, in authorized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Security in exchange for such
Global Security. If there is an Event of Default, the Depositary shall have
the right to exchange the Global Security for Definitive Securities. In
addition, the Company may at any time determine that the Securities shall no
longer be represented by a Global Security. In the event of such an Event of
Default or such a determination, the Company shall execute, and subject to
Section 2.07, the Trustee, upon receipt of an Officers' Certificate
evidencing such determination by the Company, will authenticate and make
available for delivery the Definitive Securities, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security in exchange for such Global Security. Upon the
exchange of the Global Security for such Definitive Securities, in authorized
denominations, the Global Security shall be canceled by the Trustee. Such
Definitive Securities issued in exchange for the Global Security shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee. The Trustee shall deliver such
Definitive Securities to the Depositary for delivery to the Persons in whose
names such Definitive Securities are so registered.
(e) In the event the Securities are issued as Global Securities with
the Depositary: (i) the Trustee may deal with the Depositary as the
authorized representative of the beneficial owners of the book-entry
interests in the Securities; (ii) the rights of the such beneficial owners
shall be exercised only through the Depositary and shall be limited to those
established by law and agreement between such beneficial owners and the
Depositary and/or direct participants of the Depositary; (iii) the Depositary
will make book-entry transfers among the direct participants of the
Depositary and will receive and transmit distributions of principal and
interest on the Securities to such direct participants; and (iv) the direct
participants of the Depositary shall have no rights under this Indenture
under or with respect to any of the Securities held on their behalf by the
Depositary, and the Depositary may be treated by the Trustee and its agents,
employees, officers and directors as the absolute owner and holder of the
Securities for all purposes whatsoever.
SECTION 2.06. Interest.
(a) Each Security will bear interest at the rate of 8.424% per annum
(the "Coupon Rate") from the most recent date to which interest has been paid
or duly provided for or, if no interest has been paid or duly provided for,
from the Issue Date, until the principal thereof becomes due and payable, and
at the Coupon Rate on any overdue principal (and premium, if any) and (to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest, compounded semi-annually, payable
(subject to the provisions of Article XVI) semi-annually in arrears on April
1 and October 1 of each year (each, an "Interest Payment Date") commencing
on October 1, 1997, to the Person in whose name such Security or any
Predecessor Security is registered, at the close of business on the regular
record date for such interest installment, which shall be the fifteenth
(15th) day of the month preceding the month in which the relevant Interest
Payment Date falls. Notwithstanding the foregoing, any interest that is
payable on the Maturity Date shall be payable to the Person to whom principal
payable at the Maturity Date shall be payable.
(b) Interest will be computed on the basis of a 360-day year consisting
of twelve 30-day months and, for any period of less than a full calendar
month, the actual number of days elapsed in such month. In the event that
any Interest Payment Date falls on a day that is not a Business Day, then
payment of interest 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), 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 the
date such payment was originally payable.
(c) During such time as the Property Trustee is the holder of any
Securities, the Company shall pay any additional amounts on the Securities as
may be necessary in order that the amount of Distributions then due and
payable by the Trust on the outstanding Trust Securities shall not be reduced
as a result of any additional taxes, duties and other governmental charges to
which the Trust has become subject as a result of a Tax Event ("Additional
Interest").
(d) Pursuant to the Registration Rights Agreement, in certain limited
circumstances, the Company will be required to pay Liquidated Damages (as
defined in the Registration Rights Agreement) with respect to the Securities.
SECTION 2.07. Transfer Restrictions; Transfer and Exchange.
(a) Transfer Restrictions. The Series A Securities, and those Series B
Securities with respect to which any Person described in Section 2.04(b)(1),
(2) or (3) is the beneficial owner, may not be transferred except in
compliance with the legend contained in Exhibit A and may only be transferred
in blocks of Securities having an aggregate principal amount of not less than
$100,000, unless otherwise determined by the Company in accordance with
applicable law. Upon any distribution of the Securities following a
Dissolution Event, the Company and the Trustee shall enter into a
supplemental indenture pursuant to Section 9.01 to provide for the transfer
restrictions and procedures with respect to the Securities substantially
similar to those contained in the Declaration with respect to the Capital
Securities to the extent applicable in the circumstances existing at such
time.
(b) General Provisions Relating to Transfers and Exchanges. Upon
surrender for registration of transfer of any Security at the office or
agency of the Company maintained for that purpose pursuant to Section 3.02,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount.
At the option of the holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and
of a like aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the holder making the exchange
is entitled to receive.
Every Security presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security registrar duly executed, by the
holder thereof or his attorney duly authorized in writing.
All Definitive Securities and Global Securities issued upon any
registration of transfer or exchange of Definitive Securities or Global
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Definitive Securities or Global Securities surrendered upon such registration
of transfer or exchange.
No service charge shall be made to a holder for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in
connection therewith.
The Company shall not be required to (i) issue or register the transfer
or exchange of any Securities during a period beginning at the opening of
business 15 days before the day of mailing of a notice of prepayment under
Article XIV hereof and ending at the close of business on the day of such
mailing; or (ii) register the transfer or exchange of any Security to be
prepaid.
(c) Exchange of Series A Securities for Series B Securities. The
Series A Securities may be exchanged for Series B Securities pursuant to the
terms of the Exchange Offer. The Trustee shall make the exchange as follows:
The Company shall present the Trustee with an Officers' Certificate
certifying the following:
(A) upon issuance of the Series B Securities, the transactions
contemplated by the Exchange Offer have been consummated; and
(B) the principal amount of Series A Securities properly tendered
in the Exchange Offer that are represented by a Global Security and the
principal amount of Series A Securities properly tendered in the Exchange
Offer that are represented by Definitive Securities, the name of each holder
of such Definitive Securities, the principal amount properly tendered in the
Exchange Offer by each such holder and the name and address to which
Definitive Securities for Series B Securities shall be registered and sent
for each such holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel if requested by Trustee (x) to the effect that the Series
B Securities have been registered under Section 5 of the Securities Act and
the Indenture has been qualified under the Trust Indenture Act and (y) with
respect to the matters set forth in Section 3(o) of the Registration Rights
Agreement and (iii) a Company Order, shall authenticate (A) a Global Security
for Series B Securities in aggregate principal amount equal to the aggregate
principal amount of Series A Securities represented by a Global Security
indicated in such Officers' Certificate as having been properly tendered and
(B) Definitive Securities representing Series B Securities registered in the
names of, and in the principal amounts indicated in, such Officers'
Certificate.
If the principal amount of the Global Security for the Series B
Securities is less than the principal amount of the Global Security for the
Series A Securities, the Trustee shall make an endorsement on such Global
Security for Series A Securities indicating a reduction in the principal
amount represented thereby.
The Trustee shall deliver such Definitive Securities for Series B
Securities to the holders thereof as indicated in such Officers' Certificate.
SECTION 2.08. Replacement Securities.
If any mutilated Security is surrendered to the Trustee, or the Company
and the Trustee receive evidence to their satisfaction of the destruction,
loss or theft of any Security, the Company shall issue and the Trustee shall
authenticate a replacement Security if the Trustee's requirements for
replacements of Securities are met. An indemnity bond must be supplied by
the holder that is sufficient in the judgment of the Trustee and the Company
to protect the Company, the Trustee, any agent thereof or any Authenticating
Agent from any loss that any of them may suffer if a Security is replaced.
The Company or the Trustee may charge for its expenses in replacing a
Security.
Every replacement Security is an obligation of the Company and shall be
entitled to all of the benefits of this Indenture equally and proportionately
with all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement
of mutilated, destroyed, lost or stolen Securities.
SECTION 2.09. Ranking.
The Securities shall constitute an unsecured obligation of the Company
and rank (i) subordinate and junior in right of payment to all Senior
Indebtedness (to the extent and in the manner set forth in Article XV), (ii)
pari passu in right of payment with the Other Debentures and any other
Indebtedness of the Company which specifically by its terms ranks equal with
and not prior to the Securities, and (iii) senior to any Indebtedness Ranking
Junior to the Securities.
SECTION 2.10. Temporary Securities.
Pending the preparation of Definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise reproduced, in any authorized
denomination, substantially of the tenor of the Definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as conclusively evidenced by their execution of such
Securities.
If temporary Securities are issued, the Company shall cause Definitive
Securities to be prepared without unreasonable delay. The Definitive
Securities shall be printed, lithographed or engraved, or provided by any
combination thereof, or in any other manner permitted by the rules and
regulations of any applicable securities exchange, all as determined by the
officers executing such Definitive Securities. After the preparation of
Definitive Securities, the temporary Securities shall be exchangeable for
Definitive Securities upon surrender of the temporary Securities at the
office or agency maintained by the Company for such purpose pursuant to
Section 3.02 hereof, without charge to the holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall
execute, and the Trustee shall authenticate and make available for delivery,
in exchange therefor the same aggregate principal amount of Definitive
Securities of authorized denominations. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as Definitive Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall retain or dispose of canceled Securities in accordance
with its normal practices (subject to the record retention requirement of the
Exchange Act) unless the Company directs them to be returned to it. The
Company may not issue new Securities to replace Securities that have been
prepaid or paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12. Defaulted Interest.
Any interest on any Security that is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the holder on the relevant
regular record date; and such Defaulted Interest shall be paid by the
Company, at its election, as provided in clause (a) or clause (b) below:
(a) The Company may make payment of any Defaulted Interest on Securities
to the Persons in whose names such Securities (or their respective
Predecessor Securities) are registered at the close of business on a
special record date for the payment of such Defaulted Interest, which
shall be fixed in the following manner: the Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each such Security and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount
of money equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a special record
date for the payment of such Defaulted Interest which shall not be
more than 15 nor less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly
notify the Company of such special record date and, in the name and
at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the special record date
therefor to be mailed, first class postage prepaid, to each
Securityholder at his or her address as it appears in the Security
Register, not less than 10 days prior to such special record date.
Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names such
Securities (or their respective Predecessor Securities) are
registered on such special record date and shall be no longer payable
pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest on any
Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities
may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
SECTION 2.13. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of prepayment as a convenience to Securityholders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any
notice of prepayment and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such prepayment
shall not be affected by any defect in or omission of such numbers. The
Company will promptly notify the Trustee of any change in the CUSIP numbers.
SECTION 2.14. Appointment of Trustee.
The Trustee is hereby appointed by the Company to serve as the initial
registrar and transfer agent for the Securities and to serve as the initial
paying agent for the Securities.
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of the holders of the
Securities that it will duly and punctually pay or cause to be paid the
principal of and premium, if any, and interest on the Securities at the
place, at the respective times and in the manner provided herein. Except as
provided in Section 2.03, each installment of interest on the Securities may
be paid by mailing checks for such interest payable to the order of the
holder of the Security entitled thereto as they appear in the Security
Register. The Company further covenants to pay any and all amounts
including, without limitation, Liquidated Damages, if any, on the dates and
in the manner required under the Registration Rights Agreement.
SECTION 3.02. Offices for Notices and Payments, etc.
So long as any of the Securities remain outstanding, the Company will
maintain in the Borough of Manhattan, The City of New York, an office or
agency where the Securities may be presented for payment, an office or agency
where the Securities may be presented for registration of transfer and for
exchange as in this Indenture provided and an office or agency where notices
and demands to or upon the Company in respect of the Securities or of this
Indenture may be served. The Company will give to the Trustee written notice
of the location of any such office or agency and of any change of location
thereof. Until otherwise designated from time to time by the Company in a
notice to the Trustee, any such office or agency for all of the above
purposes shall be the office of the Trustee at The First National Bank of
Chicago, c/o First Chicago Trust Company, 14 Wall Street - 8th Floor, New
York, New York 10005; Attention: Corporate Trust Administration. In case
the Company shall fail to maintain any such office or agency in the Borough
of Manhattan, The City of New York, or shall fail to give such notice of the
location or of any change in the location thereof, presentations and demands
may be made and notices may be served at the Principal Office of the Trustee.
In addition to any such office or agency, the Company may from time to
time designate one or more offices or agencies outside the Borough of
Manhattan, The City of New York, where the Securities may be presented for
payment, registration of transfer and for exchange in the manner provided in
this Indenture, and the Company may from time to time rescind such
designation, as the Company may deem desirable or expedient; provided,
however, that no such designation or rescission shall in any manner relieve
the Company of its obligation to maintain any such office or agency in the
Borough of Manhattan, The City of New York, for the purposes above mentioned.
The Company will give to the Trustee prompt written notice of any such
designation or rescission thereof.
SECTION 3.03. Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the office
of Trustee, will appoint, in the manner provided in Section 6.10, a Trustee,
so that there shall at all times be a Trustee hereunder.
SECTION 3.04. Provision as to Paying Agent.
(a) If the Company shall appoint a paying agent other than the Trustee
with respect to the Securities, it will cause such paying agent to execute
and deliver to the Trustee an instrument in which such agent shall agree with
the Trustee, subject to the provisions of this Section 3.04,
(1) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest on the
Securities (whether such sums have been paid to it by the Company or by
any other obligor on the Securities of such series) in trust for the
benefit of the holders of the Securities;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Securities) to make any payment of
the principal of and premium, if any, or interest on the Securities when
the same shall be due and payable; and
(3) that it will at any time during the continuance of any such
failure, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by it as such paying agent.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of and premium, if any, or interest on
the Securities, set aside, segregate and hold in trust for the benefit of the
holders of the Securities a sum sufficient to pay such principal, premium or
interest so becoming due and will notify the Trustee of any failure to take
such action and of any failure by the Company (or by any other obligor under
the Securities) to make any payment of the principal of and premium, if any,
or interest on the Securities when the same shall become due and payable.
(c) Anything in this Section 3.04 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Securities hereunder, or for any other reason,
pay or cause to be paid to the Trustee all sums held in trust for any such
series by the Trustee or any paying agent hereunder, as required by this
Section 3.04, such sums to be held by the Trustee upon the trusts herein
contained.
(d) Anything in this Section 3.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 3.04 is subject
to Sections 11.03 and 11.04 and Article XV.
SECTION 3.05. Certificate to Trustee.
The Company will deliver to the Trustee on or before 120 days after the
end of each fiscal year, commencing with the first fiscal year ending after
the date hereof, so long as Securities are outstanding hereunder, an
Officers' Certificate, one of the signers of which shall be the principal
executive, principal financial or principal accounting officer of the
Company, stating that in the course of the performance by the signers of
their duties as officers of the Company they would normally have knowledge of
any default by the Company in the performance of any covenants contained
herein, stating whether or not they have knowledge of any such default and,
if so, specifying each such default of which the signers have knowledge and
the nature thereof.
SECTION 3.06. [Reserved]
SECTION 3.07. Limitation on Dividends and Payments.
The Company will not (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect
to, any of the Company's capital stock (which includes common, preferred and
preference stock) or (ii) make any payment of principal, interest or premium,
if any, on or repay or repurchase or redeem any debt securities of the
Company (including any Other Debentures) that rank pari passu with or junior
in right of payment to the Securities or (iii) make any guarantee payments
with respect to any guarantee by the Company of any securities of any
Subsidiary of the Company (including Other Guarantees) if such guarantee
ranks pari passu with or junior in right of payment to the Securities (other
than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, capital stock of the Company;
(b) any declaration of a dividend in connection with the implementation of a
stockholder's rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant
thereto; (c) payments under the Capital Securities Guarantee; (d) as a direct
result of, and only to the extent required in order to avoid the issuance of
fractional shares of capital stock following, a reclassification of the
Company's capital stock or the exchange or the conversion of one class or
series of the Company's capital stock for another class or series of the
Company's capital stock or pursuant to an acquisition in which fractional
shares of the Company's capital stock would otherwise be issued; (e) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged; and (f) purchases of common stock
related to the issuance of common stock or rights under any benefit plans for
directors, officers, agents or employees of the Company or its Subsidiaries,
or any of the Company's dividend reinvestment or director, officer, agent or
employee stock purchase plans), if at such time (1) an Event of Default shall
have occurred and be continuing or, would occur upon the taking of any action
described in clauses (i) through (iii) above, (2) there shall have occurred
any event of which the Company has actual knowledge that (a) with the giving
of notice or the lapse of time, or both, would constitute an Event of Default
and (b) in respect of which the Company shall not have taken reasonable steps
to cure, (3) the Company shall be in default with respect to its payment
obligations under the Capital Securities Guarantee or (4) the Company shall
have given notice of its election of the exercise of its right to extend the
interest payment period pursuant to Article XVI (or notice of a valid
extension of an interest payment period in accordance with the terms of any
Other Debentures) and any such extension shall not have been rescinded or
such Extended Interest Payment Period, or any extension thereof, or extension
period with respect to Other Debentures, shall be continuing.
SECTION 3.08. Covenants as to the Trust.
In the event Securities are issued to the Trust or a trustee of the
Trust in connection with the issuance of Trust Securities by the Trust, for
so long as such Trust Securities remain outstanding, the Company will (i)
maintain 100% direct ownership of the Common Securities of the Trust;
provided, however, that any successor of the Company, permitted pursuant to
Article X, may succeed to the Company's ownership of such Common Securities,
(ii) use its reasonable efforts, consistent with the terms and provisions of
the Declaration, to cause the Trust (a) to remain a business trust, except in
connection with a distribution of Securities, the redemption of all of the
Trust Securities or certain mergers, consolidations or amalgamations, each
as permitted by the Declaration, and (b) to otherwise continue to be treated
as a grantor trust and not an association taxable as a corporation or
partnership for United States federal income tax purposes and (iii) to use
its reasonable efforts to cause each holder of Trust Securities to be treated
as owning an undivided beneficial interest in the Securities.
SECTION 3.09. Payment of Expenses.
In connection with the offering, sale and issuance of the Securities to
the Trust and in connection with the sale of the Trust Securities by the
Trust, the Company, in its capacity as borrower with respect to the
Securities, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Securities, including commissions to the initial purchaser
payable pursuant to the Purchase Agreement, fees and expenses in
connection with the Exchange Offer or other action to be taken pursuant
to the Registration Rights Agreement and compensation of the Trustee in
accordance with the provisions of Section 6.06;
(b) pay all costs and expenses of the Trust, including, but not limited
to, costs and expenses relating to the organization of the Trust, the
offering, sale and issuance of the Trust Securities (including commissions
to the initial purchaser in connection therewith), the fees and expenses
of the Property Trustee and the Delaware Trustee, the costs and expenses
relating to the operation of the Trust, including without limitation,
costs and expenses of accountants, attorneys, statistical or bookkeeping
services, expenses for printing and engraving and computing or accounting
equipment, paying agent(s), registrar(s), transfer agent(s), duplicating,
travel and telephone and other telecommunications expenses and costs and
expenses incurred in connection with the acquisition, financing and
disposition of assets of the Trust;
(c) be primarily and fully liable for any indemnification obligations
arising with respect to the Declaration;
(d) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust; and
(e) pay all other fees, expenses, debts and obligations (other than
payments of principal of, premium, if any, or interest on the Trust
Securities) related to the Trust.
SECTION 3.10. Payment Upon Resignation or Removal.
Upon termination of this Indenture or the removal or resignation of the
Trustee, unless otherwise stated, the Company shall pay to the Trustee all
amounts accrued and owing to the date of such termination, removal or
resignation. Upon termination of the Declaration or the removal or
resignation of the Delaware Trustee or the Property Trustee, as the case may
be, pursuant to Section 5.7 of the Declaration, the Company shall pay to the
Delaware Trustee or the Property Trustee, as the case may be, all amounts
accrued and owing to the date of such termination, removal or resignation.
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists.
The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee:
(a) on a semi-annual basis on each regular record date for the
Securities, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Securityholders as of such record date;
and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company, of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished,
except that, no such lists need be furnished so long as the Trustee is in
possession thereof by reason of its acting as Security registrar.
SECTION 4.02. Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
the Securities (1) contained in the most recent list furnished to it as
provided in Section 4.01 or (2) received by it in the capacity of Securities
registrar (if so acting) hereunder. The Trustee may destroy any list
furnished to it as provided in Section 4.01 upon receipt of a new list so
furnished.
(b) In case three or more holders of Securities (hereinafter referred
to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned a Security for a
period of at least six months preceding the date of such application, and
such application states that the applicants desire to communicate with other
holders of Securities or with holders of all Securities with respect to their
rights under this Indenture and is accompanied by a copy of the form of proxy
or other communication which such applicants propose to transmit, then the
Trustee shall within 5 Business Days after the receipt of such application,
at its election, either:
(1) afford such applicants access to the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of
this Section 4.02, or
(2) inform such applicants as to the approximate number of holders of
all Securities, whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.02, and as to the approximate cost of
mailing to such Securityholders the form of proxy or other communication,
if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Securityholder whose name and address appear in the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.02 a copy of the form of proxy or other
communication which is specified in such request with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing, unless
within five days after such tender, the Trustee shall mail to such applicants
and file with the Commission, together with a copy of the material to be
mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the holders
of the Securities, or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter
an order so declaring, the Trustee shall mail copies of such material to all
such Securityholders with reasonable promptness after the entry of such order
and the renewal of such tender; otherwise the Trustee shall be relieved of
any obligation or duty to such applicants respecting their application.
(c) Each and every holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any paying agent shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
holders of Securities in accordance with the provisions of subsection (b) of
this Section 4.02, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under said subsection (b).
SECTION 4.03. Reports by the Company.
(a) The Company covenants and agrees to file with the Trustee, within
15 days after the date on which the Company is required to file the same with
the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the
foregoing as said Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the
Company is not required to file information, documents or reports pursuant to
either of such sections, then to file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the Exchange Act in
respect of a security listed and registered on a national securities exchange
as may be prescribed from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time
to time by said Commission, such additional information, documents and
reports with respect to compliance by the Company with the conditions and
covenants provided for in this Indenture as may be required from time to time
by such rules and regulations.
(c) The Company covenants and agrees to transmit by mail to all holders
of Securities, as the names and addresses of such holders appear upon the
Security Register, within 30 days after the filing thereof with the Trustee,
such summaries of any information, documents and reports required to be filed
by the Company pursuant to subsections (a) and (b) of this Section 4.03 as
may be required by rules and regulations prescribed from time to time by the
Commission.
(d) Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall
not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
(e) So long as is required for an offer or sale of the Securities to
qualify for an exemption under Rule 144A under the Securities Act, the
Company shall, upon request, provide the information required by clause
(d)(4) thereunder to each holder and to each beneficial owner and prospective
purchaser of Securities identified by any holder of Restricted Securities,
unless such information is furnished to the Commission pursuant to Section 13
or 15(d) of the Exchange Act.
SECTION 4.04. Reports by the Trustee.
(a) The Trustee shall transmit to Securityholders such reports
concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. If required by Section 313(a) of the Trust
Indenture Act, the Trustee shall, within 90 days after each December 31
following the date of this Indenture, commencing December 31, 1997, deliver
to Securityholders a brief report, dated as of such December 31, which
complies with the provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such transmission
to Securityholders, be filed by the Trustee with each stock exchange, if any,
upon which the Securities are listed, with the Commission and with the
Company.
The Company will promptly notify the Trustee when the Securities are
listed on any stock exchange.
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.01. Events of Default.
One or more of the following events of default shall constitute an Event
of Default hereunder (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest upon any Security or any Other
Debentures when it becomes due and payable, and continuance of such
default for a period of 30 days; provided, however, that a valid extension
of an interest payment period by the Company in accordance with the terms
hereof or of any Other Debentures shall not constitute a default in the
payment of interest for this purpose; or
(b) default in the payment of all or any part of the principal of (or
premium, if any, on) any Security or any Other Debentures as and when the
same shall become due and payable either at maturity, upon prepayment, by
declaration of acceleration of maturity or otherwise; or
(c) default in the performance, or breach, in any material respect of
any covenant or warranty of the Company in this Indenture (other than a
covenant or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and continuance of
such default or breach for a period of 90 days after there has been given,
by registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the holders of at least 25% in aggregate
principal amount of the outstanding Securities a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(d) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Company in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Company or
for any substantial part of its property, or ordering the winding-up or
liquidation of its affairs and such decree or order shall remain unstayed
and in effect for a period of 90 consecutive days; or
(e) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or the taking
of possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Company or of any
substantial part of its property, or shall make any general assignment
for the benefit of creditors, or admission by it in writing of its
inability to pay its debts as they become due.
If an Event of Default with respect to Securities at the time
outstanding occurs and is continuing, then in every such case the Trustee or
the holders of not less than 25% in aggregate principal amount of the
Securities then outstanding may declare the principal amount of all Securities
to be due and payable immediately, by a notice in writing to the Company (and
to the Trustee if given by the holders of the outstanding Securities), and upon
any such declaration the same shall become immediately due and payable.
The foregoing provisions, however, are subject to the condition that if,
at any time after the principal of the Securities shall have been so declared
due and payable, and before any judgment or decree for the payment of the
moneys due shall have been obtained or entered as hereinafter provided, (i)
the Company shall pay or shall deposit with the Trustee a sum sufficient to
pay (A) all matured installments of interest upon all the Securities and the
principal of and premium, if any, on any and all Securities which shall have
become due otherwise than by acceleration (with interest upon such principal
and premium, if any, and, to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of interest, at the
same rate as the rate of interest specified in the Securities to the date of
such payment or deposit) and (B) such amount as shall be sufficient to cover
reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith, and (ii)
any and all Events of Default under the Indenture, other than the non-payment
of the principal of the Securities which shall have become due solely by such
declaration of acceleration, shall have been cured, waived or otherwise
remedied as provided herein, then, in every such case, the holders of a
majority in aggregate principal amount of the Securities then outstanding, by
written notice to the Company and to the Trustee, may rescind and annul such
declaration and its consequences, but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default or shall
impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the Trustee and the holders of the Securities shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Trustee and the holders of the
Securities shall continue as though no such proceeding had been taken.
SECTION 5.02. Payment of Securities on Default; Suit Therefor.
The Company covenants that (a) in case default shall be made in the
payment of any installment of interest upon any of the Securities as and when
the same shall become due and payable, and such default shall have continued
for a period of 30 days (provided, however, the valid extension of an
interest payment period in accordance with Section 16.01 hereof shall not
constitute a default in the payment of interest for this purpose), or (b) in
case default shall be made in the payment of the principal of or premium, if
any, on any of the Securities as and when the same shall have become due and
payable, whether at maturity of the Securities or upon prepayment or by
declaration or otherwise, then, upon demand of the Trustee, the Company will
pay to the Trustee, for the benefit of the holders of the Securities, the
whole amount that then shall have become due and payable on all such
Securities for principal and premium, if any, or interest, or both, as the
case may be, with interest upon the overdue principal and premium, if any,
and (to the extent that payment of such interest is enforceable under
applicable law and, if the Securities are held by the Trust or a trustee of
the Trust, without duplication of any other amounts paid by the Trust or a
trustee in respect thereof) upon the overdue installments of interest at the
rate borne by the Securities; and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection,
including a reasonable compensation to the Trustee, its agents, attorneys and
counsel, and any expenses or liabilities incurred by the Trustee hereunder
other than through its negligence or bad faith.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any actions or proceedings at
law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or any other
obligor on the Securities and collect in the manner provided by law out of
the property of the Company or any other obligor on the Securities wherever
situated the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Securities under
Title 11, United States Code, or any other applicable law, or in case a
receiver or trustee shall have been appointed for the property of the Company
or such other obligor, or in the case of any other similar judicial
proceedings relative to the Company or other obligor upon the Securities, or
to the creditors or property of the Company or such other obligor, the
Trustee, irrespective of whether the principal of the Securities shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand pursuant to
the provisions of this Section 5.02, shall be entitled and empowered, by
intervention in such proceedings or otherwise, to file and prove a claim or
claims for the whole amount of principal and interest owing and unpaid in
respect of the Securities and, in case of any judicial proceedings, to file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee, and
their respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee, except as a result of negligence or bad faith) and
of the Securityholders allowed in such judicial proceedings relative to the
Company or any other obligor on the Securities, or to the creditors or
property of the Company or such other obligor, unless prohibited by
applicable law and regulations, to vote on behalf of the holders of the
Securities in any election of a trustee or a standby trustee in arrangement,
reorganization, liquidation or other bankruptcy or insolvency proceedings or
person performing similar functions in comparable proceedings, and to collect
and receive any moneys or other property payable or deliverable on any such
claims, and to distribute the same after the deduction of its charges and
expenses; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the Securityholders to make
such payments to the Trustee, and, in the event that the Trustee shall
consent to the making of such payments directly to the Securityholders, to
pay to the Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or bad faith.
Nothing herein contained shall be construed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any holder thereof or to authorize the
Trustee to vote in respect of the claim of any Securityholder in any such
proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof on any trial
or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the ratable benefit
of the holders of the Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the
holders of the Securities, and it shall not be necessary to make any holders
of the Securities parties to any such proceedings.
SECTION 5.03. Application of Moneys Collected by Trustee.
Any moneys collected by the Trustee shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the Securities in respect of which moneys
have been collected, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses of collection
applicable to the Securities and reasonable compensation to the Trustee,
its agents, attorneys and counsel, and of all other expenses and
liabilities incurred, and all advances made, by the Trustee except as a
result of its negligence or bad faith;
Second: To the payment of all Senior Indebtedness of the Company
if and to the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid upon
Securities for principal of (and premium, if any) and interest on the
Securities, in respect of which or for the benefit of which money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due on such Securities for principal (and premium, if any)
and interest, respectively; and
Fourth: To the Company.
SECTION 5.04. Proceedings by Securityholders.
Except as set forth below, no holder of any Security shall have any
right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless such holder previously
shall have given to the Trustee written notice of an Event of Default and of
the continuance thereof with respect to the Securities specifying such Event
of Default, as hereinbefore provided, and unless also the holders of not less
than 25% in aggregate principal amount of the Securities then outstanding
shall have made written request upon the Trustee to institute such action,
suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such indemnity satisfactory to it as it may reasonably
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute any such
action, suit or proceeding, it being understood and intended, and being
expressly covenanted by the taker and holder of every Security with every
other taker and holder and the Trustee, that no one or more holders of
Securities shall have any right in any manner whatever by virtue of or by
availing of any provision of this Indenture to affect, disturb or prejudice
the rights of any other holder of Securities, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Securities.
Notwithstanding any other provisions in this Indenture, however, the
right of any holder of any Security to receive payment of the principal of
(premium, if any) and interest on such Security, on or after the same shall
have become due and payable, or to institute suit for the enforcement of any
such payment, shall not be impaired or affected without the consent of such
holder and by accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security with every
other such taker and holder and the Trustee, that no one or more holders of
Securities shall have any right in any manner whatsoever by virtue or by
availing of any provision of this Indenture to affect, disturb or prejudice
the rights of the holders of any other Securities, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce
any right under this Indenture, except in the manner herein provided and for
the equal, ratable and common benefit of all holders of Securities. For the
protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
The Company acknowledges that, with respect to any Securities held by
the Trust or a trustee of the Trust, if the Property Trustee of the Trust
fails to enforce its rights under this Indenture as the holder of the
Securities held as the assets of the Trust, any holder of Capital Securities
may institute legal proceedings directly against the Company to enforce such
Property Trustee's rights under this Indenture without first instituting any
legal proceedings against such Property Trustee or any other person or
entity. Notwithstanding the foregoing, if an Event of Default has occurred
and is continuing and such event is attributable to the failure of the
Company to pay principal of or premium, if any, or interest on the Securities
when due, the Company acknowledges that a holder of Capital Securities may
directly institute a proceeding for enforcement of payment to such holder of
the principal of or premium, if any, or interest on the 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 Securities (a "Direct Action").
Notwithstanding any payments made to a holder of Capital Securities by
the Company pursuant to a Direct Action initiated by such holder, the Company
shall remain obligated to pay the principal of or premium, if any, or
interest due on the Securities, and the Company 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.
SECTION 5.05. Proceedings by Trustee.
In case an Event of Default occurs with respect to Securities and is
continuing, the Trustee may in its discretion proceed to protect and enforce
the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
any of such rights, either by suit in equity or by action at law or by
proceeding in bankruptcy or otherwise, whether for the specific enforcement
of any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture, or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.06. Remedies Cumulative and Continuing.
Except as provided in the last paragraph of Section 2.08, all powers and
remedies given by this Article V to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive
of any other powers and remedies available to the Trustee or the holders of
the Securities, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to the Securities, and no
delay or omission of the Trustee or of any holder of any of the Securities to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 5.04, every power and remedy given by
this Article V or by law to the Trustee or to the Securityholders may be
exercised from time to time, and as often as shall be deemed expedient, by
the Trustee or by the Securityholders.
SECTION 5.07. Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders.
The holders of a majority in aggregate principal amount of the
Securities at the time outstanding shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; provided,
however, that (subject to the provisions of Section 6.01) the Trustee shall
have the right to decline to follow any such direction if the Trustee shall
determine that the action so directed would be unjustly prejudicial to the
holders not taking part in such direction or if the Trustee being advised by
counsel determines that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith by its board of directors or
trustees, executive committee, or a trust committee of directors or trustees
and/or Responsible Officers shall determine that the action or proceedings so
directed would involve the Trustee in personal liability. Prior to any
declaration accelerating the maturity of the Securities, the holders of a
majority in aggregate principal amount of the Securities at the time
outstanding may on behalf of the holders of all of the Securities waive any
past default or Event of Default and its consequences except a default (a) in
the payment of principal of or premium, if any, or interest on any of the
Securities or (b) in respect of covenants or provisions hereof which cannot
be modified or amended without the consent of the holder of each Security
affected; provided, however, that if the Securities are held by the Property
Trustee, such waiver or modification to such waiver shall not be effective
until the holders of a majority in aggregate liquidation amount of the Trust
Securities shall have consented to such waiver or modification to such
waiver; provided further that if the consent of the holder of each
outstanding Security is required, such waiver shall not be effective until
each holder of the Trust Securities shall have consented to such waiver.
Upon any such waiver, the default covered thereby shall be deemed to be cured
for all purposes of this Indenture and the Company, the Trustee and the
holders of the Securities shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon. Whenever
any default or Event of Default hereunder shall have been waived as permitted
by this Section 5.07, said default or Event of Default shall for all purposes
of the Securities and this Indenture be deemed to have been cured and to be
not continuing.
SECTION 5.08. Notice of Defaults.
The Trustee shall, within five Business Days after actual knowledge by a
Responsible Officer of the Trustee of the occurrence of a default with
respect to the Securities, mail to all Securityholders, as the names and
addresses of such holders appear upon the Security Register, notice of all
defaults known to the Trustee, unless such defaults shall have been cured
before the giving of such notice (the term "defaults" for the purpose of this
Section 5.08 being hereby defined to be the events specified in clauses (a),
(b), (c), (d) and (e) of Section 5.01, not including periods of grace, if
any, provided for therein, and irrespective of the giving of written notice
specified in clause (c) of Section 5.01); and provided that, except in the
case of default in the payment of the principal of or premium, if any, or
interest on any of the Securities, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Securityholders; and provided further that
in the case of any default of the character specified in Section 5.01(c) no
such notice to Securityholders shall be given until at least 60 days after
the occurrence thereof but shall be given within 90 days after such
occurrence.
SECTION 5.09. Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due regard
to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 5.09 shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder, or
group of Securityholders, holding in the aggregate more than 10% in aggregate
principal amount of the Securities outstanding, or to any suit instituted by
any Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security against the Company on or after
the same shall have become due and payable.
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee.
With respect to the holders of the Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default and after the curing
or waiving of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in
this Indenture. In case an Event of Default has occurred (which has not been
cured or waived), the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act
or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture, and the Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on the part of the Trustee, the
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 Trustee and conforming to
the requirements of this Indenture; but, in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the 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 Securityholders pursuant to Section 5.07, relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
None of the provisions contained in this Indenture shall require the
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 there is reasonable ground for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this Indenture or indemnity against such risk reasonably
satisfactory to it is not assured to it.
SECTION 6.02. Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.01:
(a) the 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, consent, order,
bond, note, debenture or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the Company mentioned
herein may be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any Board Resolution may be evidenced to the Trustee by a copy thereof
certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel 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 of
Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders, pursuant to the provisions of
this Indenture, unless such Securityholders shall have offered to the
Trustee security or indemnity reasonably satisfactory to it against the
costs, expenses and liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
nothing contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default (that has not been
cured or waived), to exercise such of the rights and powers vested in it
by this Indenture, and to use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs;
(f) the 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, consent, order, approval,
bond, debenture, coupon or other paper or document, unless requested in
writing to do so by the holders of a majority in aggregate principal
amount of the outstanding Securities; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such
expense or liability as a condition to so proceeding;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents
(including any Authenticating Agent) or attorneys, and the Trustee shall
not be responsible for any misconduct or negligence on the part of or for
the supervision of any such agent or attorney appointed by it with due
care;
(h) the Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Indenture;
(i) no permissive power or authority available to the Trustee shall be
construed as a duty; and
(j) in the event that the Trustee is also acting as paying agent or
Securities registrar hereunder, the rights and protections afforded to
the Trustee pursuant to this Article VI shall also be afforded to such
paying agent and Securities registrar.
SECTION 6.03. No Responsibility for Recitals, etc.
The recitals contained herein and in the Securities (except in the
certificate of authentication of the Trustee or the Authenticating Agent)
shall be taken as the statements of the Company and the Trustee and the
Authenticating Agent assume no responsibility for the correctness of the
same. The Trustee and the Authenticating Agent make no representations as to
the validity or sufficiency of this Indenture or of the Securities. The
Trustee and the Authenticating Agent shall not be accountable for the use or
application by the Company of any Securities or the proceeds of any
Securities authenticated and delivered by the Trustee or the Authenticating
Agent in conformity with the provisions of this Indenture. The Trustee shall
not be charged with knowledge of any default or Event of Default unless (i) a
Responsible Officer of the Trustee assigned to its Principal Office shall
have actual knowledge thereof or (ii) the Company, any Securityholder or the
holder of any Other Debenture shall have given the Trustee written notice
thereof in accordance with Section 13.04.
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Securities.
The Trustee or any Authenticating Agent or any paying agent or any
transfer agent or any Security registrar, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights
it would have if it were not Trustee, Authenticating Agent, paying agent,
transfer agent or Security registrar.
SECTION 6.05. Moneys to Be Held in Trust.
Subject to the provisions of Section 11.04, all moneys received by the
Trustee or any paying agent shall, until used or applied as herein provided,
be held in trust for the purpose for which they were received, but need not
be segregated from other funds except to the extent required by law. The
Trustee and any paying agent shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in writing with the
Company. So long as no Event of Default shall have occurred and be
continuing, all interest allowed on any such moneys shall be paid from time
to time upon the written order of the Company, signed by the Chairman of the
Board of Directors, the President or a Vice President or the Treasurer or an
Assistant Treasurer of the Company.
SECTION 6.06. Compensation and Expenses of Trustee.
The Company, as borrower, covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, such compensation as
shall be agreed to in writing between the Company and the Trustee (which
shall not be limited by any provision of law in regard to the compensation of
a trustee of an express trust), and the Company will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from
its negligence or bad faith. The Company also covenants to indemnify each of
the Trustee or any predecessor Trustee (and its officers, agents, directors and
employees) for, and to hold it harmless against, any and all loss, damage,
claim, liability or expense including taxes (other than taxes based on the
income of the Trustee) incurred without negligence or bad faith on the part
of the Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim of liability in the premises. The obligations of
the Company under this Section 6.06 to compensate and indemnify the Trustee
and to pay or reimburse the Trustee for expenses, disbursements and advances
shall constitute additional indebtedness hereunder. Such additional
indebtedness shall be a senior claim to that of the Securities upon all
property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of the holders of particular Securities, and
the Securities are hereby subordinated to such senior claim.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(d) or Section
5.01(e), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture or the earlier resignation or removal of the Trustee.
SECTION 6.07. Officers' Certificate as Evidence.
Except as otherwise provided in Sections 6.01 and 6.02, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking
or omitting any action hereunder, the Trustee shall be entitled to receive,
and such matter (unless other evidence in respect thereof is herein
specifically prescribed) may, in the absence of negligence or bad faith on
the part of the Trustee, be deemed to be conclusively proved and established
by, an Officers' Certificate delivered to the Trustee, and such certificate,
in the absence of negligence or bad faith on the part of the Trustee, shall
be full warrant to the Trustee for any action taken or omitted by it under
the provisions of this Indenture in reliance thereon.
SECTION 6.08. Conflicting Interest of Trustee.
If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act, subject to the penultimate paragraph thereof.
SECTION 6.09. Eligibility of Trustee.
The Trustee hereunder shall at all times 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 other
Person permitted to act as trustee by the Commission 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 aforesaid
supervising or examining authority, then for the purposes of this Section
6.09 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.
The Company may not, nor may any Person directly or indirectly
controlling, controlled by or under common control with the Company, serve as
Trustee.
In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.09, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.
SECTION 6.10. Resignation or Removal of Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign by giving written notice of such resignation to the Company
and by mailing notice thereof to the holders of the Securities at their
addresses as they shall appear on the Security Register. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee
or trustees by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and have
accepted appointment within 60 days after the mailing of such notice of
resignation to the Securityholders, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee, or
any Securityholder who has been a bona fide holder of a Security for at least
six months may, subject to the provisions of Section 5.09, on behalf of himself
and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of
Section 6.08 after written request therefor by the Company or by any
Securityholder who has been a bona fide holder of a Security or Securities
for at least six months, or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 6.09 and shall fail to resign after written request
therefor by the Company or by any such Securityholder, or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, the
Company may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered
to the Trustee so removed and one copy to the successor trustee, or,
subject to the provisions of Section 5.09, any Securityholder who has
been a bona fide holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities at the time outstanding may at any time remove the Trustee and
nominate a successor trustee, which shall be deemed appointed as successor
trustee unless within 10 days after such nomination the Company objects
thereto or if no successor trustee shall have been so appointed and shall
have accepted appointment within 30 days after such removal, in which case
the Trustee so removed or any Securityholder, upon the terms and conditions
and otherwise as in subsection (a) of this Section 6.10 provided, may
petition any court of competent jurisdiction for an appointment of a
successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 6.10
shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 6.11.
SECTION 6.11. Acceptance by Successor Trustee.
Any successor trustee appointed as provided in Section 6.10 shall
execute, acknowledge and deliver to the Company and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the retiring trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee
herein; but, nevertheless, on the written request of the Company or of the
successor trustee, the trustee ceasing to act shall, upon payment of any
amounts then due it pursuant to the provisions of Section 6.06, execute and
deliver an instrument transferring to such successor trustee all the rights
and powers of the trustee so ceasing to act and shall duly assign, transfer
and deliver to such successor trustee all property and money held by such
retiring trustee thereunder. Upon request of any such successor trustee, the
Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers. Any trustee ceasing to act shall, nevertheless, retain a prior
claim upon all property or funds held or collected by such trustee to secure
any amounts then due it pursuant to the provisions of Section 6.06.
No successor trustee shall accept appointment as provided in this
Section 6.11 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 6.08 and eligible under
the provisions of Section 6.09.
Upon acceptance of appointment by a successor trustee as provided in
this Section 6.11, the Company shall mail notice of the succession of such
trustee hereunder to the holders of Securities at their addresses as they
shall appear on the Security register. If the Company fails to mail such
notice within 10 days after the acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Company.
SECTION 6.12. Succession by Merger, etc.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder
without the execution or filing of any paper or any further act on the part
of any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any Securities shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder
or in the name of the successor trustee; and in all such cases such
certificates shall have the full force which the Securities or this Indenture
elsewhere provides that the certificate of the Trustee shall have; provided,
however, that the right to adopt the certificate of authentication of any
predecessor Trustee or authenticate Securities in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion
or consolidation.
SECTION 6.13. Limitation on Rights of Trustee as a Creditor.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship described in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject
to Section 311(a) of the Trust Indenture Act to the extent included therein.
SECTION 6.14. Authenticating Agents.
There may be one or more Authenticating Agents appointed by the Trustee
upon the request of the Company with power to act on its behalf and subject
to its direction in the authentication and delivery of Securities issued upon
exchange or transfer thereof as fully to all intents and purposes as though
any such Authenticating Agent had been expressly authorized to authenticate
and deliver Securities; provided that the Trustee shall have no liability to
the Company for any acts or omissions of the Authenticating Agent with
respect to the authentication and delivery of Securities. Any such
Authenticating Agent shall at all times be a corporation organized and doing
business under the laws of the United States or of any state or territory
thereof or of the District of Columbia authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of at least
$5,000,000 and being 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 the requirements of
such authority, then for the purposes of this Section 6.14 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. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect herein specified in this
Section.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating
Agent shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of any Authenticating Agent, shall be the
successor of such Authenticating Agent hereunder, if such successor
corporation is otherwise eligible under this Section 6.14 without the
execution or filing of any paper or any further act on the part of the
parties hereto or such Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any Authenticating Agent by giving written
notice of termination to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case
at any time any Authenticating Agent shall cease to be eligible under this
Section 6.14, the Trustee may, and upon the request of the Company shall,
promptly appoint a successor Authenticating Agent eligible under this Section
6.14, shall give written notice of such appointment to the Company and shall
mail notice of such appointment to all Securityholders as the names and
addresses of such holders appear on the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent
herein.
The Company, as borrower, agrees to pay to any Authenticating Agent from
time to time reasonable compensation for its services. Any Authenticating
Agent shall have no responsibility or liability for any action taken by it as
such in accordance with the directions of the Trustee.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a
specified percentage in aggregate principal amount of the Securities may take
any action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action) the fact that at
the time of taking any such action the holders of such specified percentage
have joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by such Securityholders in person or by
agent or proxy appointed in writing, or (b) by the record of such holders of
Securities voting in favor thereof at any meeting of such Securityholders
duly called and held in accordance with the provisions of Article VIII, or
(c) by a combination of such instrument or instruments and any such record of
such a meeting of such Securityholders.
If the Company shall solicit from the Securityholders any request,
demand, authorization, direction, notice, consent, waiver or other action,
the Company may, at its option, as evidenced by an Officers' Certificate, fix
in advance a record date for the determination of Securityholders entitled to
give such request, demand, authorization, direction, notice, consent, waiver
or other action or to revoke any such action, but the Company shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action or
revocation may be given before or after the record date, but only the
Securityholders of record at the close of business on the record date shall
be deemed to be Securityholders for the purposes of determining whether
Securityholders of the requisite proportion of outstanding Securities have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the
outstanding Securities shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such
Securityholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than
six months after the record date.
SECTION 7.02. Proof of Execution by Securityholders.
Subject to the provisions of Sections 6.01, 6.02 and 8.05, proof of the
execution of any instrument by a Securityholder or his agent or proxy shall
be sufficient if made in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The ownership of Securities shall be proved by
the Security Register or by a certificate of the Security registrar. The
Trustee may require such additional proof of any matter referred to in this
Section as it shall deem necessary.
The record of any Securityholders' meeting shall be proved in the manner
provided in Section 8.06.
SECTION 7.03. Who Are Deemed Absolute Owners.
Prior to due presentment for registration of transfer of any Security,
the Company, the Trustee, any Authenticating Agent, any paying agent, any
transfer agent and any Security registrar may deem the person in whose name
such Security shall be registered upon the Security Register to be, and may
treat him as, the absolute owner of such Security (whether or not such
Security shall be overdue) for the purpose of receiving payment of or on
account of the principal of and premium, if any, and (subject to Section
2.06) interest on such Security and for all other purposes; and neither the
Company nor the Trustee nor any Authenticating Agent nor any paying agent nor
any transfer agent nor any Security registrar shall be affected by any notice
to the contrary. All such payments so made to any holder for the time being
or upon his order shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys payable
upon any such Security.
SECTION 7.04. Securities Owned by Company Deemed Not Outstanding.
In determining whether the holders of the requisite aggregate principal
amount of Securities have concurred in any direction, consent or waiver under
this Indenture, Securities which are owned by the Company or any other
obligor on the Securities or by any person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company
or any other obligor on the Securities shall be disregarded and deemed not to
be outstanding for the purpose of any such determination; provided that for
the purposes of determining whether the Trustee shall be protected in relying
on any such direction, consent or waiver, only Securities which a
Responsible Officer of the Trustee assigned to its Principal Office actually
knows are so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as outstanding for the purposes of
this Section 7.04 if the pledgee shall establish to the satisfaction of the
Trustee the pledgee's right to vote such Securities and that the pledgee is
not the Company or any such other obligor or person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or any such other obligor. In the case of a dispute as to such
right, any decision by the Trustee taken upon the advice of counsel shall be
full protection to the Trustee.
SECTION 7.05. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 7.01, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Securities specified in this
Indenture in connection with such action, any holder of a Security (or any
Security issued in whole or in part in exchange or substitution therefor),
subject to Section 7.01, the serial number of which is shown by the evidence
to be included in the Securities the holders of which have consented to such
action may, by filing written notice with the Trustee at its principal office
and upon proof of holding as provided in Section 7.02, revoke such action so
far as concerns such Security (or so far as concerns the principal amount
represented by any exchanged or substituted Security). Except as aforesaid,
any such action taken by the holder of any Security shall be conclusive and
binding upon such holder and upon all future holders and owners of such
Security, and of any Security issued in exchange or substitution therefor,
irrespective of whether or not any notation in regard thereto is made upon
such Security or any Security issued in exchange or substitution therefor.
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings.
A meeting of Securityholders may be called at any time and from time to
time pursuant to the provisions of this Article VIII for any of the following
purposes:
(a) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to
be taken by Securityholders pursuant to any of the provisions of
Article V;
(b) to remove the Trustee and nominate a successor trustee pursuant to
the provisions of Article VI;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.02; or
(d) to take any other action authorized to be taken by or on behalf of
the holders of any specified aggregate principal amount of such Securities
under any other provision of this Indenture or under applicable law.
SECTION 8.02. Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Securityholders to take
any action specified in Section 8.01, to be held at such time and at such
place as the Trustee shall determine. Notice of every meeting of the
Securityholders, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be
mailed to holders of Securities at their addresses as they shall appear on
the Securities Register. Such notice shall be mailed not less than 20 nor
more than 180 days prior to the date fixed for the meeting.
SECTION 8.03. Call of Meetings by Company or Securityholders.
In case at any time the Company pursuant to a resolution of the Board of
Directors, or the holders of at least 10% in aggregate principal amount of
the Securities then outstanding, shall have requested the Trustee to call a
meeting of Securityholders, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall
not have mailed the notice of such meeting within 20 days after receipt of
such request, then the Company or such Securityholders may determine the time
and the place for such meeting and may call such meeting to take any action
authorized in Section 8.01, by mailing notice thereof as provided in Section
8.02.
SECTION 8.04. Qualifications for Voting.
To be entitled to vote at any meeting of Securityholders a person shall
be (a) a holder of one or more Securities or (b) a person appointed by an
instrument in writing as proxy by a holder of one or more Securities. The
only persons who shall be entitled to be present or to speak at any meeting
of Securityholders shall be the persons entitled to vote at such meeting and
their counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 8.05. Regulations.
Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Securityholders, in regard to proof of the holding of Securities and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning
the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by majority vote of the
meeting.
Subject to the provisions of Section 8.04, at any meeting each holder of
Securities or proxy therefor shall be entitled to one vote for each $1,000
principal amount of Securities held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not outstanding and ruled by the chairman of the
meeting to be not outstanding. The chairman of the meeting shall have no
right to vote other than by virtue of Securities held by him or instruments
in writing as aforesaid duly designating him as the person to vote on behalf
of other Securityholders. Any meeting of Securityholders duly called
pursuant to the provisions of Section 8.02 or 8.03 may be adjourned from time
to time by a majority of those present, whether or not constituting a quorum,
and the meeting may be held as so adjourned without further notice.
The Persons entitled to vote a majority in principal amount of the
outstanding Securities shall constitute a quorum for a meeting of Holders of
Securities; provided, however, that 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 principal amount of the outstanding
Securities, the Persons holding or representing such specified percentage in
principal amount of the outstanding Securities will constitute a quorum. In
the absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of holders of
Securities, be dissolved. In any other case the meeting may be adjourned for
a period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such meeting. In the absence of a quorum
at any such adjourned meeting, such adjourned meeting may be further
adjourned for a period of not less than 10 days as determined by the chairman
of the meeting prior to the adjournment of such adjourned meeting. Notice of
the reconvening of any adjourned meeting shall be given as provided in
Section 8.02, except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage, as provided above, of the principal amount of the
outstanding Securities which shall constitute a quorum.
Except as limited by the first proviso to the first paragraph of Section
9.02, any resolution presented to a meeting or adjourned meeting duly
reconvened at which a quorum is present as aforesaid may be adopted by the
affirmative vote of the holders of a majority in principal amount of the
outstanding Securities; provided, however, that, except as limited by the
first proviso to the first paragraph of Section 9.02, any resolution with
respect to any consent, waiver, request, demand, notice, authorization,
direction or other action which this Indenture expressly provides may be
given by the holders of not less than a specified percentage in principal
amount of the outstanding Securities may be adopted at a meeting or an
adjourned meeting duly reconvened and at which a quorum is present as
aforesaid only by the affirmative vote of the holders of not less than such
specified percentage in principal amount of the outstanding Securities.
Any resolution passed or decision taken at any meeting of holders of
Securities duly held in accordance with this Section shall be binding on all
the holders of Securities whether or not present or represented at the
meeting.
SECTION 8.06. Voting.
The vote upon any resolution submitted to any meeting of holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of such holders or of their representatives by proxy and the
serial number or numbers of the Securities held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and
who shall make and file with the secretary of the meeting their verified
written reports in triplicate of all votes cast at the meeting. A record in
duplicate of the proceedings of each meeting of Securityholders shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was mailed as provided in Section 8.02. The record shall show the
serial numbers of the Securities voting in favor of or against any
resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates
shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
ARTICLE IX
AMENDMENTS
SECTION 9.01. Without Consent of Securityholders.
The Company and the Trustee may from time to time and at any time amend
the Indenture, without the consent of the Securityholders, for one or more of
the following purposes:
(a) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Company pursuant to
Article X hereof;
(b) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee or to surrender any right or power herein conferred upon
the Company;
(c) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the Securityholders as
the Company and the Trustee shall consider to be for the protection of
the Securityholders, and to make the occurrence, or the occurrence and
continuance, of a default in any of such additional covenants,
restrictions or conditions a default or an Event of Default permitting
the enforcement of all or any of the remedies provided in this Indenture
as herein set forth; provided, however, that in respect of any such
additional covenant, restriction or condition such amendment may provide
for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the
remedies available to the Trustee upon such default;
(d) to provide for the issuance under this Indenture of Securities in
coupon form (including Securities registrable as to principal only) and to
provide for exchangeability of such Securities with the Securities issued
hereunder in fully registered form and to make all appropriate changes for
such purpose;
(e) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective
or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture; provided that any such
action shall not materially adversely affect the interests of the holders
of the Securities;
(f) to evidence and provide for the acceptance of appointment hereunder
by a successor trustee with respect to the Securities;
(g) to make provision for transfer procedures, certification, book-entry
provisions, the form of restricted securities legends, if any, to be
placed on Securities, minimum denominations and all other matters required
pursuant to Section 2.07 or otherwise necessary, desirable or appropriate
in connection with the issuance of Securities to holders of Capital
Securities in the event of a distribution of Securities by the Trust
following a Dissolution Event;
(h) to qualify or maintain qualification of this Indenture under the
Trust Indenture Act;
(i) to comply with the requirements of any securities exchange or
interdealer quotation system on which the Securities are or will be
listed; and
(j) to make any change that does not adversely affect the rights of any
Securityholder in any material respect.
The Trustee is hereby authorized to join with the Company in the
execution of any supplemental indenture to effect such amendment, to make any
further appropriate agreements and stipulations which may be therein
contained and to accept the conveyance, transfer and assignment of any
property thereunder, but the Trustee shall not be obligated to, but may in
its discretion, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Any amendment to the Indenture authorized by the provisions of this
Section 9.01 may be executed by the Company and the Trustee without the
consent of the holders of any of the Securities at the time outstanding,
notwithstanding any of the provisions of Section 9.02.
SECTION 9.02. With Consent of Securityholders.
With the consent (evidenced as provided in Section 7.01) of the holders
of a majority in aggregate principal amount of the Securities at the time
outstanding, the Company, when authorized by a Board Resolution (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in
accordance with or pursuant to a Company Order), and the Trustee may from
time to time and at any time amend the Indenture for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
holders of the Securities; provided, however, that no such amendment shall
without the consent of the holders of each Security then outstanding and
affected thereby (i) extend the Maturity Date of any Security, or reduce the
rate or extend the time of payment of interest thereon (except as
contemplated by Article XVI), or reduce the principal amount thereof, or
reduce any amount payable on prepayment thereof, or make the principal
thereof or any interest or premium thereon payable in any coin or currency
other than that provided in the Securities, or impair or affect the right of
any Securityholder to institute suit for payment thereof, or (ii) reduce the
aforesaid percentage of Securities the holders of which are required to
consent to any such amendment to the Indenture, provided, however, that if
the Securities are held by the Trust, such amendment shall not be effective
until the holders of a majority in liquidation amount of Trust Securities
shall have consented to such amendment; provided further that if the consent
of the holder of each outstanding Security is required, such amendment shall
not be effective until each holder of the Trust Securities shall have
consented to such amendment; and provided further that such amendment shall
not impair or affect the right of any holder of Capital Securities to
commence a Direct Action, in the circumstances and subject to the limitations
set forth in the Declaration, until each holder of Capital Securities shall
have consented to such amendment.
Upon the request of the Company accompanied by a copy of a resolution of
the Board of Directors certified by its Secretary or Assistant Secretary
authorizing the execution of any supplemental indenture affecting such
amendment, and upon the filing with the Trustee of evidence of the consent of
Securityholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise, in which case the Trustee may in its discretion, but shall not
be obligated to, enter into such supplemental indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the
Trustee shall transmit by mail, first class postage prepaid, a notice,
prepared by the Company, setting forth in general terms the substance of such
supplemental indenture, to the Securityholders as their names and addresses
appear upon the Security Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 9.03. Compliance with Trust Indenture Act; Effect of
Supplemental Indentures.
Any supplemental indenture executed pursuant to the provisions of this
Article IX shall comply with the Trust Indenture Act as it may be in effect
from time to time. Upon the execution of any supplemental indenture pursuant
to the provisions of this Article IX, this Indenture shall be and be deemed
to be modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the holders of Securities shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments and all the terms and
conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
SECTION 9.04. Notation on Securities.
Securities authenticated and delivered after the execution of any
supplemental indenture affecting such series pursuant to the provisions of
this Article IX may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Securities so modified as to conform, in the
opinion of the Trustee and the Company, to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by
the Company, authenticated by the Trustee or the Authenticating Agent and
delivered in exchange for the Securities then outstanding.
SECTION 9.05. Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee.
The Trustee, subject to the provisions of Sections 6.01 and 6.02, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant hereto complies
with the requirements of this Article IX.
The Trustee may receive an Opinion of Counsel as conclusive evidence
that any supplemental indenture executed pursuant to this Article is
authorized or permitted by, and conforms to, the terms of this Article and
that it is proper for the Trustee under the provisions of this Article to
join in the execution thereof.
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., Only on Certain Terms.
The Company shall not consolidate with or merge with or into any other
Person or sell, convey, assign, transfer, lease or otherwise dispose of all
or substantially all of its properties and assets as an entirety to any
Person, unless:
(1) the Person formed by such consolidation or into which the Company
is merged or the Person which acquires, by sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the
properties and assets of the Company as an entirety (A) shall be a
corporation, partnership or trust organized and validly existing under
the laws of the United States of America, any State thereof or the
District of Columbia and (B) shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the Company's obligation for the due and
punctual payment of the principal of (and premium, if any, on) and
interest on all the Securities and the performance and observance of
every covenant of this Indenture on the part of the Company to be
performed or observed;
(2) immediately before and immediately after giving pro forma effect to
such transaction (and treating any indebtedness not previously an
obligation of the Company or a Subsidiary which became the obligation of
the Company or any of its Subsidiaries in connection with or as a result
of such transaction as having been incurred at the time of such
transaction), no Default or Event of Default shall have occurred and be
continuing; and
(3) the Company or such Person shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and such supplemental
indenture comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with.
This Section and Section 10.02 shall only apply to a merger or consolida-
tion in which the Company is not the surviving corporation and to conveyances,
leases and transfers by the Company as transferor or lessor of all or
substantially all of the properties and assets of the Company and its
Subsidiaries on a consolidated basis to any Person.
SECTION 10.02. Successor Person Substituted.
Upon any consolidation by the Company with or merger by the Company into
any other corporation or any sale, assignment, conveyance, transfer,
disposition or lease of all or substantially all of the properties and assets
of the Company as an entirety to any Person in accordance with Section 10.01,
the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and in the event of any such
conveyance or transfer, the Company (which term shall for this purpose mean
the Person named as the "Company" in the first paragraph of this Indenture or
any successor Person which shall theretofore become such in the manner
described in Section 10.01), except in the case of a lease, shall be
discharged of all obligations and covenants under this Indenture and the
Securities and the coupons and may be dissolved and liquidated.
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture.
When (a) the Company shall deliver to the Trustee for cancellation all
Securities theretofore authenticated (other than any Securities which shall
have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.08) and not theretofore canceled, or (b) all
the Securities not theretofore canceled or delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for prepayment
within one year under arrangements satisfactory to the Trustee for the giving
of notice of prepayment, and the Company shall deposit with the Trustee, in
trust, funds sufficient to pay on the Maturity Date or upon prepayment all of
the Securities (other than any Securities which shall have been destroyed,
lost or stolen and which shall have been replaced as provided in Section
2.08) not theretofore canceled or delivered to the Trustee for cancellation,
including principal and premium, if any, and interest due or to become due to
the Maturity Date or prepayment date, as the case may be, but excluding,
however, the amount of any moneys for the payment of principal of or premium,
if any, or interest on the Securities (1) theretofore repaid to the Company
in accordance with the provisions of Section 11.04, or (2) paid to any State
or to the District of Columbia pursuant to its unclaimed property or similar
laws, and if in either case the Company shall also pay or cause to be paid
all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect except for the provisions of Sections 2.02,
2.07, 2.08, 3.01, 3.02, 3.04, 6.06, 6.10 and 11.04 hereof, which shall
survive until such Securities shall mature and be paid. Thereafter, Sections
6.06, 6.10 and 11.04 shall survive, and the Trustee, on demand of the Company
accompanied by any Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture, the Company,
however, hereby agreeing to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee in connection with
this Indenture or the Securities.
SECTION 11.02. Deposited Moneys and U.S. Government Obligations to Be
Held in Trust by Trustee.
Subject to the provisions of Section 11.04, all moneys and U.S.
Government Obligations deposited with the Trustee pursuant to Sections 11.01
or 11.05 shall be held in trust and applied by it to the payment, either
directly or through any paying agent (including the Company if acting as its
own paying agent), to the holders of the particular Securities for the
payment of which such moneys or U.S. Government Obligations have been
deposited with the Trustee, of all sums due and to become due thereon for
principal, premium, if any, and interest.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 11.05 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the holders of outstanding Securities.
SECTION 11.03. Paying Agent to Repay Moneys Held.
Upon the satisfaction and discharge of this Indenture all moneys then
held by any paying agent of the Securities (other than the Trustee) shall,
upon written demand of the Company, be repaid to it or paid to the Trustee,
and thereupon such paying agent shall be released from all further liability
with respect to such moneys.
SECTION 11.04. Return of Unclaimed Moneys.
Any moneys deposited with or paid to the Trustee or any paying agent for
payment of the principal of or premium, if any, or interest on Securities and
not applied but remaining unclaimed by the holders of Securities for two
years after the date upon which the principal of or premium, if any, or
interest on such Securities, as the case may be, shall have become due and
payable, shall be repaid to the Company by the Trustee or such paying agent on
Company Request; and the holder of any of the Securities shall thereafter look
only to the Company for any payment which such holder may be entitled to
collect and all liability of the Trustee or such paying agent with respect to
such moneys shall thereupon cease.
SECTION 11.05. Defeasance Upon Deposit of Moneys or U.S. Government
Obligations.
The Company shall be deemed to have been Discharged (as defined below)
from its obligations with respect to the Securities on the 91st day after the
conditions set forth below have been satisfied:
(1) The Company shall have deposited or caused to be deposited
irrevocably with the Trustee or the Defeasance Agent (as defined below)
as trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the holders of the Securities (i)
money in an amount, or (ii) U.S. Government Obligations which through
the payment of interest and principal in respect thereof in accordance
with their terms will provide, not later than one day before the due date
of any payment, money in an amount, or (iii) a combination of (i) and
(ii), sufficient, in the opinion (with respect to (ii) and (iii)) of a
nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee and the
Defeasance Agent, if any, to pay and discharge each installment of
principal of and interest and premium, if any, on the outstanding
Securities on the dates such installments of principal, interest or
premium are due;
(2) if the Securities are then listed on any national securities
exchange, the Company shall have delivered to the Trustee and the
Defeasance Agent, if any, an Opinion of Counsel to the effect that
the exercise of the option under this Section 11.05 would not cause
such Securities to be delisted from such exchange until the Securities
have been discharged;
(3) no Default or Event of Default with respect to the Securities shall
have occurred and be continuing on the date of such deposit; and
(4) the Company shall have delivered to the Trustee and the Defeasance
Agent, if any, an Opinion of Counsel to the effect that holders of the
Securities will not recognize income, gain or loss for United States
federal income tax purposes as a result of the exercise of the option
under this Section 11.05 and will be subject to United States federal
income tax on the same amount and in the same manner and at the same
times as would have been the case if such option had not been exercised,
and such opinion shall be based on a statute so providing or be
accompanied by a private letter ruling to that effect received from the
United States Internal Revenue Service or a revenue ruling pertaining to
a comparable form of transaction to that effect published by the United
States Internal Revenue Service.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Securities and to have satisfied all the obligations under this Indenture
relating to the Securities (and the Trustee, at the expense of the Company,
shall execute proper instruments provided to it acknowledging the same),
except (A) the rights of holders of Securities to receive, from the trust
fund described in clause (1) above, payment of the principal of and the
interest and premium, if any, on the Securities when such payments are due;
(B) the Company's obligations with respect to the Securities under Sections
2.02, 2.07, 2.08, 3.02, 3.04, 6.10 and 11.04; and (C) the rights, powers,
trusts, duties and immunities of the Trustee hereunder.
"Defeasance Agent" means another financial institution which is eligible
to act as Trustee hereunder and which assumes all of the obligations of the
Trustee necessary to enable the Trustee to act under this Article. In the
event such a Defeasance Agent is appointed pursuant to this Section, the
following conditions shall apply:
(1) The Trustee shall have approval rights over the document appointing
such Defeasance Agent and the document setting forth such Defeasance
Agent's rights and responsibilities;
(2) The Defeasance Agent shall provide verification to the Trustee
acknowledging receipt of sufficient money and/or U. S. Government
Obligations to meet the applicable conditions set forth in this Section
11.05.
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or
interest on any Security, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture, or in any Security, or because of
the creation of any indebtedness represented thereby, shall be had against
any incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor Person to the Company, either
directly or through the Company or any successor Person to the Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture
and the issue of the Securities.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors.
All the covenants, stipulations, promises and agreements in this
Indenture contained by the Company shall bind its successors and assigns
whether so expressed or not.
SECTION 13.02. Official Acts by Successor Corporation.
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.
SECTION 13.03. Surrender of Company Powers.
The Company by instrument in writing executed by authority of 2/3
(two-thirds) of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company, and thereupon such power
so surrendered shall terminate both as to the Company, as the case may be,
and as to any successor Person.
SECTION 13.04. Addresses for Notices, etc.
Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the holders
of Securities on the Company may be given or served by being deposited
postage prepaid by registered or certified mail in a post office letter box
addressed (until another address is filed by the Company with the Trustee for
the purpose) to Equitable of Iowa Companies, 604 Locust Street, P.O. Box
1635, Des Moines, Iowa 50306-1635; Attention: Secretary. Any notice,
direction, request or demand by any Securityholder to or upon the Trustee
shall be deemed to have been sufficiently given or made, for all purposes, if
given or made in writing at the office of the Trustee, at One First National
Plaza - Suite 0126, Chicago, Illinois 60670-0126; Attention: Corporate
Trust Services Division (unless another address is provided by the Trustee
for the purpose).
Any notice or communication to a Securityholder shall be mailed by first
class mail to his or her address shown on the register kept by the Securities
registrar. Failure to mail a notice or communication to a Securityholder or
any defect in it shall not affect its sufficiency with respect to other
Securityholders.
SECTION 13.05. Governing Law.
This Indenture and each Security shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes shall be
governed by and construed in accordance with the laws of said State, without
regard to conflicts of laws principles thereof.
SECTION 13.06. Evidence of Compliance with Conditions Precedent.
Upon any application or demand by the Company to the Trustee to take any
action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that in the opinion
of the signers all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
Each certificate or opinion provided for in this Indenture and delivered
to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture (except pursuant to Section 3.05) shall
include (1) a statement that the person making such certificate or opinion
has read such covenant or condition; (2) a brief statement as to the nature
and scope of the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based; (3) a statement
that, in the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an in formed opinion
as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with.
SECTION 13.07. Business Days.
In any case where the date of payment of principal of or premium, if
any, or interest on the Securities will not be a Business Day, the payment of
such principal of or premium, if any, or interest on the Securities need not
be made on such date but may 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), 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 the date such
payment was originally payable.
SECTION 13.08. Trust Indenture Act to Control.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.09. Table of Contents, Headings, etc.
The table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
SECTION 13.10. Execution in Counterparts.
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute
but one and the same instrument.
SECTION 13.11. Separability.
In case any one or more of the provisions contained in this Indenture or
in the Securities shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of the Securities,
but this Indenture and the Securities shall be construed as if such invalid
or illegal or unenforceable provision had never been contained herein or
therein.
SECTION 13.12. Assignment.
The Company will have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Company, provided that, in the event of any
such assignment, the Company will remain primarily liable for all its
obligations. Subject to the foregoing, the Indenture is binding upon and
inures to the benefit of the parties thereto and their respective successors
and assigns. This Indenture may not otherwise be assigned by the parties
thereto.
ARTICLE XIV
PREPAYMENT OF SECURITIES -- SINKING FUND
SECTION 14.01. Special Event Prepayment.
If a Special Event has occurred and is continuing then the Company shall
have the right, upon (i) not less than 45 days written notice to the Trustee,
which notice shall be accompanied by an Officers' Certificate certifying that
a Special Event entitling the Company to prepay the Securities pursuant to
this Section has occurred and (ii) not less than 30 days nor more than 60
days written notice to the Securityholders, to prepay the Securities, in
whole (but not in part), within 90 days following the occurrence of such
Special Event at the Special Event Prepayment Price. Following a Special
Event, the Company shall take such action as is necessary to promptly
determine the Special Event Prepayment Price, including without limitation
the appointment by the Company of a Quotation Agent. The Special Event
Prepayment Price shall be paid prior to 12:00 noon, New York time, on the
date of such prepayment or such earlier time as the Company determines,
provided that the Company shall deposit with the Trustee an amount sufficient
to pay the Special Event Prepayment Price by 10:00 a.m., New York time, on
the date such Special Event Prepayment Price is to be paid. The Company
shall provide the Trustee with written notice of the Special Event Prepayment
Price promptly after the calculation thereof, which notice shall include any
calculation made by the Quotation Agent in connection with the determination
of the Special Event Prepayment Price.
SECTION 14.02. [Reserved]
SECTION 14.03. No Sinking Fund.
The Securities are not entitled to the benefit of any sinking fund.
SECTION 14.04. Notice of Prepayment
In case the Company shall desire to exercise the right to prepay the
Securities in accordance with their terms, it shall fix a date for prepayment
and shall mail a notice of such prepayment at least 30 and not more than 60
days prior to the date fixed for prepayment to the holders of Securities so
to be prepaid at their last addresses as the same appear on the Security
Register. Such mailing shall be by first class mail. The notice if mailed
in the manner herein provided shall be conclusively presumed to have been
duly given, whether or not the holder receives such notice. In any case,
failure to give such notice by mail or any defect in the notice to the holder
of any Security designated for prepayment shall not affect the validity of
the proceedings for the prepayment of any other Security.
Each such notice of prepayment shall specify the CUSIP number, if any,
of the Securities to be prepaid, the date fixed for prepayment, the Special
Event Redemption Price (or the method by which the Special Event Prepayment
Price is to be calculated), the place or places of payment, that payment will
be made upon presentation and surrender of the Securities, that interest
accrued to the date fixed for prepayment will be paid as specified in said
notice, and that on and after said date interest thereon will cease to
accrue.
By 10:00 a.m. New York time on the prepayment date specified in the
notice of prepayment given as provided in this Section, the Company will
deposit with the Trustee or with one or more paying agents an amount of money
sufficient to prepay the Securities at the Special Event Prepayment Price.
SECTION 14.05. Payment of Securities Called for Prepayment.
If notice of prepayment has been given as provided in Section 14.04, the
Securities shall become due and payable on the date and at the place or
places stated in such notice at the Special Event Prepayment Price (subject
to the rights of holders of Securities on the close of business on a regular
record date in respect of an Interest Payment Date occurring on or prior to
the prepayment date), and on and after said date (unless the Company shall
default in the payment of such Securities at the Special Event Prepayment
Price) interest on the Securities shall cease to accrue. On presentation
and surrender of such Securities at a place of payment specified in said
notice, the said Securities shall be paid by the Company at the Special
Event Prepayment Price (subject to the rights of holders of Securities on the
close of business on a regular record date in respect of an Interest Payment
Date occurring on or prior to the prepayment date).
ARTICLE XV
SUBORDINATION OF SECURITIES
SECTION 15.01. Agreement to Subordinate.
The Company covenants and agrees, and each holder of Securities issued
hereunder likewise covenants and agrees, that the Securities shall be issued
subject to the provisions of this Article XV; and each holder of a Security,
whether upon original issue or upon transfer or assignment thereof, accepts
and agrees to be bound by such provisions.
The payment by the Company of the principal of, premium, if any, and
interest on all Securities issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment
to the prior payment in full of all Senior Indebtedness, whether outstanding
at the date of this Indenture or thereafter incurred.
No provision of this Article XV shall prevent the occurrence of any
Default or Event of Default hereunder.
SECTION 15.02. Default on Senior Indebtedness.
Unless Section 15.03 shall be applicable, in the event and during the
continuation of any default by the Company in the payment of principal,
premium, interest or any other payment due on any Senior Indebtedness, or in
the event that the maturity of any Senior Indebtedness has been or would be
permitted upon notice or the passage of time to be accelerated because of a
default, or if any judicial proceeding shall be pending with respect to any
such default, then, unless and until such event of default shall have been
cured or waived or shall have ceased to exist and such acceleration shall
have been rescinded or annulled, then no payment or distribution of any kind
or character, whether in cash, properties or securities shall be made by the
Company with respect to the principal (including prepayment payments) of or
premium, if any, or interest on the Securities or on account of the purchase
or other acquisition of Securities by the Company or any Subsidiary, in each
case unless and until all amounts due or to become due on such Senior
Indebtedness are paid in full in cash or other consideration satisfactory to
the holders of such Senior Indebtedness.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or a holder of any Security when such payment is
prohibited by the preceding paragraph of this Section 15.02, such payment
shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant
to which any of such Senior Indebtedness may have been issued, as their
respective interests may appear, but only to the extent that the holders of
the Senior Indebtedness (or their representative or representatives or a
trustee) notify the Trustee in writing, within 90 days of such payment.
SECTION 15.03. Prior Payment to Senior Indebtedness Upon Acceleration
of Securities.
In the event that any Securities are declared due and payable before
their Stated Maturity, then no payment or distribution of any kind or
character, whether in cash, properties or securities shall be made by the
Company on account of the principal (including prepayment payments) of, or
premium, if any, or interest (including any Additional Interest) on the
Securities or on account of the purchase or other acquisition of Securities
by the Company or any Subsidiary, until all amounts due on or in respect of
Senior Indebtedness outstanding at the time of such acceleration shall have
been paid in full to the holders of such Senior Indebtedness in cash or other
consideration satisfactory to the holders of such Senior Indebtedness, or
provision shall have been made for such payment.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or the Holder of any Security when such payment is
prohibited by the foregoing provisions of this Section 15.03, such payment
shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant
to which any of such Senior Indebtedness may have been issued, as their
respective interests may appear, but only to the extent that the holders of
the Senior Indebtedness (or their representative or representatives or a
trustee) notify the Trustee in writing, within 90 days of such payment.
The provisions of this Section shall not apply to any payment with
respect to which Section 15.04 would be applicable.
SECTION 15.04. Liquidation; Dissolution; Bankruptcy.
In the case of the pendency of any receivership, insolvency,
dissolution, winding-up, liquidation, reorganization, assignment for the
benefit of creditors or any other marshaling of assets or liabilities of the
Company or other similar judicial proceeding relative to the Company, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership or other
proceedings (each such event, if any herein sometimes referred to as a
"Proceeding"), then the holders of Senior Indebtedness shall be entitled to
receive payment in full of all amounts due or to become due on such Senior
Indebtedness, or provision shall be made for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, before the holders of the Securities are entitled to receive or
retain any payment or distribution of any kind or character, whether in cash,
property or securities (including any payment or distribution which may be
payable or deliverable by reason of the payment of any other debt of the
Company (including any series of the Securities) subordinated to the payment
of the Securities, such payment or distribution being hereinafter referred to
as a "Junior Subordinated Payment"), on account of principal of (or premium,
if any) or interest (including Additional Interest) on the Securities or on
account of the purchase or other acquisition of Securities by the Company or
any Subsidiary, and to that end the holders of Senior Indebtedness shall be
entitled to receive, for application to the payment thereof, any payment or
distribution of any kind or character, whether in cash, property or
securities, including any Junior Subordinated Payment, which may be payable
or deliverable in respect of the Securities in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the holders of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any Junior Subordinated
Payment, before all amounts due or to become due on all Senior Indebtedness
are paid in full or payment thereof is provided for in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, and if such fact shall, at or prior to the time of such payment
or distribution, have been made actually known to a Responsible Officer of
the Trustee or, as the case may be, such holder, then in such event such
payment or distribution shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee,
agent or other Person making payment or distribution of assets of the Company
for application to the payment of all amounts due or to become due on all
Senior Indebtedness remaining unpaid, to the extent necessary to pay all
amounts due or to become due on all Senior Indebtedness in full, after giving
effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.
For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed (so long as the effect of any exclusion
employing this definition is not to cause the Securities to be treated in any
Proceeding as a part of the same class of claims as the Senior Indebtedness
or any class of claims pari passu with, or senior to the Senior Indebtedness)
to include shares of stock of the Company as reorganized or readjusted, or
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated at least
to the extent provided in this Article XV with respect to the Securities to
the payment of Senior Indebtedness that may at the time be outstanding,
provided that (i) such Senior Indebtedness is assumed by the new corporation,
if any, resulting from any such reorganization or readjustment, and (ii) the
rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the sale,
conveyance, transfer or lease of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and conditions
provided for in Article X of this Indenture shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of
this Section 15.03 if such other Person shall, as a part of such
consolidation, merger, sale, conveyance, transfer or lease, comply with the
conditions stated in Article X of this Indenture.
SECTION 15.05. Subrogation.
Subject to the payment in full of all amounts due or to become due on
all Senior Indebtedness to the extent provided herein or the provision for
such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Indebtedness, the rights of the
Securityholders shall be subrogated to the rights of the holders of such
Senior Indebtedness to receive payments or distributions made to the holders
of such Senior Indebtedness pursuant to the provisions of this Article
(equally and ratably with the holders of all indebtedness of the Company
which by its express terms is subordinated to Senior Indebtedness of the
Company to substantially the same extent as the Securities are subordinated
to the Senior Indebtedness and is entitled to like rights of subrogation by
reason of payments or distributions made to holders of such Senior
Indebtedness) to the rights of the holders of such Senior Indebtedness to
receive payments and distributions of cash, property or securities of the
Company, as the case may be, applicable to such Senior Indebtedness until the
principal of (and premium, if any) and interest (including Additional
Interest) on the Securities shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the Securityholders
or the Trustee would be entitled except for the provisions of this Article XV,
and no payment over pursuant to the provisions of this Article XV to or for
the benefit of the holders of such Senior Indebtedness by Securityholders or
the Trustee, shall, as between the Company, its creditors other than holders
of Senior Indebtedness of the Company, and the holders of the Securities, be
deemed to be a payment by the Company to or on account of such Senior
Indebtedness. It is understood that the provisions of this Article XV are
and are intended solely for the purposes of defining the relative rights of
the holders of the Securities, on the one hand, and the holders of such Senior
Indebtedness on the other hand.
Nothing contained in this Article XV or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness of the Company, and
the holders of the Securities, the obligation of the Company, which is
absolute and unconditional, to pay to the holders of the Securities the
principal of (and premium, if any) and interest on the Securities as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the holders of the
Securities and creditors of the Company, as the case may be, other than the
holders of Senior Indebtedness of the Company, as the case may be, nor shall
anything herein or therein prevent the Trustee or the holder of any Security
from exercising all remedies otherwise permitted by applicable law upon
default under the Indenture, subject to the rights, if any, under this
Article XV of the holders of such Senior Indebtedness in respect of cash,
property or securities of the Company, as the case may be, received upon the
exercise of any such remedy.
SECTION 15.06. Trustee to Effectuate Subordination.
Each Securityholder by such Securityholder's acceptance thereof
authorizes and directs the Trustee on such Securityholder's behalf to take
such action as may be necessary or appropriate to effectuate the
subordination provided in this Article XV and appoints the Trustee such
Securityholder's attorney-in-fact for any and all such purposes.
SECTION 15.07. Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee assigned to its Principal Office of any fact known to the Company
that would prohibit the making of any payment of monies to or by the Trustee
in respect of the Securities pursuant to the provisions of this Article XV.
Notwithstanding the provisions of this Article XV or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment of
monies to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article XV, unless and until a Responsible Officer of the
Trustee assigned to its Principal Office shall have received written notice
thereof from the Company or a holder or holders of Senior Indebtedness or
from any trustee therefor; and before the receipt of any such written notice,
the Trustee, subject to the provisions of Article VI of this Indenture, shall
be entitled in all respects to assume that no such facts exist; provided,
however, that if the Trustee shall not have received the notice provided for
in this Section 15.06 at least two Business Days prior to the date (i) upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium,
if any) or interest on any Security), or (ii) moneys and/or U.S. Government
Obligations are deposited in trust pursuant to Article XI then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such money and U.S. Government Obligations and
to apply the same to the purposes for which they were received, and shall not
be affected by any notice to the contrary that may be received by it within
two Business Days prior to such date.
The Trustee, subject to the provisions of Article VI of this Indenture,
shall be entitled to conclusively rely on the delivery to it of a written
notice by a Person representing himself to be a holder of Senior Indebtedness
of the Company (or a trustee or representative on behalf of such holder) to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder or
holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
such Senior Indebtedness to participate in any payment or distribution
pursuant to this Article XV, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
such Senior Indebtedness held by such Person, the extent to which such Person
is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article XV, and, if
such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to
receive such payment.
Upon any payment or distribution of assets of the Company referred to in
this Article XV, the Trustee and the Securityholders shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction
in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
custodian, receiver, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Trustee or to
the Securityholders, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article XV.
SECTION 15.08. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XV in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XV, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not
be deemed to owe any fiduciary duty to the holders of Senior Indebtedness
and, subject to the provisions of Article VI of this Indenture, the Trustee
shall not be liable to any holder of Senior Indebtedness if it shall pay over
or deliver to Securityholders, the Company or any other Person money or
assets to which any holder of Senior Indebtedness shall be entitled by virtue
of this Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.06.
SECTION 15.09. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof that any
such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Securityholders,
without incurring responsibility to the Securityholders and without impairing
or releasing the subordination provided in this Article XV or the obligations
hereunder of the holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness, or otherwise amend or supplement in any
manner such Senior Indebtedness or any instrument evidencing the same or any
agreement under which such Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Senior Indebtedness; (iii) release any Person liable
in any manner for the collection of such Senior Indebtedness; and (iv)
exercise or refrain from exercising any rights against the Company and any
other Person.
SECTION 15.10. Article Applicable to Paying Agents.
In case at any time any paying agent other than the Trustee shall have
been appointed by the Company and then be acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such paying
agent within its meanings as fully and for all intents and purposes as if
such paying agent were named in this article in addition to or in place of
the Trustee.
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 16.01. Extension of Interest Payment Period.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the
term of the Securities, to defer payments of interest by extending the
interest payment period of such Securities for a period not exceeding 10
consecutive semi-annual periods, including the first such semi-annual period
during such extension period (the "Extended Interest Payment Period"), during
which Extended Interest Payment Period no interest shall be due and payable
on the Securities; provided that no Extended Interest Payment Period shall
end on a date other than an Interest Payment Date or extend beyond the
Maturity Date. To the extent permitted by applicable law, interest, the
payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 16.01, will bear interest thereon at
the Coupon Rate compounded semi-annually for each semi- annual period of the
Extended Interest Payment Period ("Compounded Interest"). At the end of the
Extended Interest Payment Period, the Company shall pay all interest accrued
and unpaid on the Securities, including any Additional Interest and
Compounded Interest (together, "Deferred Interest") that shall be payable to
the holders of the Securities in whose names the Securities are registered in
the Security Register on the first record date preceding the end of the
Extended Interest Payment Period. Before the termination of any Extended
Interest Payment Period, the Company may further defer payments of interest
by further extending such period, provided that such period, together with
all such previous and further extensions within such Extended Interest
Payment Period, shall not exceed 10 consecutive semi-annual periods,
including the first such semi-annual period during such Extended Interest
Payment Period, or extend beyond the Maturity Date. Upon the termination of
any Extended Interest Payment Period and the payment of all Deferred Interest
then due, the Company may commence a new Extended Interest Payment Period,
subject to the foregoing requirements. No interest shall be due and payable
during an Extended Interest Payment Period, except at the end thereof, but
the Company may prepay at any time all or any portion of the interest accrued
during an Extended Interest Payment Period.
SECTION 16.02. Notice of Extension.
(a) If the Property Trustee is the only registered holder of the
Securities at the time the Company selects an Extended Interest Payment
Period (or elects to extend any Extended Interest Payment Period), the
Company shall give written notice to the Administrative Trustees, the
Property Trustee and the Trustee of its selection of such Extended Interest
Payment Period (or any extension thereof), five Business Days before the
earlier of (i) the next succeeding date on which Distributions on the Trust
Securities issued by the Trust are payable, or (ii) the date the Trust is
required to give notice of the record date, or the date such Distributions
are payable, to any national securities exchange or to holders of the Capital
Securities issued by the Trust, but in any event at least five Business Days
before such record date. The Trustee shall thereafter give written notice of
the Company's election to begin or extend the Extended Interest Payment
Period to the holders of the Securities.
(b) If the Property Trustee is not the only holder of the Securities at
the time the Company selects an Extended Interest Payment Period (or elects
to extend any Extended Interest Payment Period), the Company shall give the
holders of the Securities and the Trustee written notice of its selection of
such Extended Interest Payment Period (or any extension thereof) at least 10
Business Days before the earlier of (i) the next succeeding Interest Payment
Date, or (ii) the date the Company is required to give notice of the record
or payment date of such interest payment to any national securities exchange.
(c) The semi-annual period in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 16.02 shall be counted as one of the 10
semi-annual periods permitted in the maximum Extended Interest Payment Period
permitted under Section 16.01.
The Trustee hereby accepts the trusts in this Indenture declared and
provided, upon the terms and conditions hereinabove set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers thereunto duly authorized, as of
the day and year first above written.
EQUITABLE OF IOWA COMPANIES
By /s/ Paul E. Larson
______________________________________
Name: Paul E. Larson
_________________________________
Title: Executive Vice President and
_________________________________
Chief Financial Officer
_________________________________
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By /s/ Richard D. Manella
______________________________________
Name: Richard D. Manella
_________________________________
Title: Vice President
_________________________________
[Signature Page to Indenture]
EXHIBIT A
(FORM OF FACE OF SECURITY)
[IF THE SECURITY IS A GLOBAL SECURITY, INSERT: THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY.
THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS 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 SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), 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.]
[IF THIS SECURITY IS A RESTRICTED SECURITY, INSERT: THIS SECURITY
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE RE-OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER
OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH EQUITABLE OF
IOWA COMPANIES (THE "COMPANY") OR ANY "AFFILIATE" OF THE COMPANY WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY), ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS SECURITY IS ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE COMPANY PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO THE COMPANY, AND (ii) PURSUANT TO CLAUSE (D), TO REQUIRE THAT
A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEREE TO THE COMPANY. SUCH
HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.]
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO THE "PROHIBITED TRANSACTIONS" PROVISIONS OF SECTION 406 OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR
SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED ("THE
CODE") AND IS NOT USING THE ASSETS OF ANY SUCH PLAN TO ACQUIRE THIS SECURITY,
OR (ii) THE ACQUISITION AND HOLDING OF THIS SECURITY BY IT IS NOT PROHIBITED
BY EITHER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR IS EXEMPT
FROM ANY SUCH PROHIBITION BY APPLICATION OF A STATUTORY, REGULATORY OR
ADMINISTRATIVE EXEMPTION.
EQUITABLE OF IOWA COMPANIES
8.424% SERIES [A/B] SUBORDINATED DEFERRABLE INTEREST
DEBENTURE DUE APRIL 1, 2027
No. ____ REGISTERED
U.S. $____________
Equitable of Iowa Companies, an Iowa corporation (the "Company", which
term includes any successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to ______________ or
registered assigns, the principal sum of _____________ Dollars on April 1,
2027 (the "Maturity Date"), unless previously prepaid, and to pay interest on
the outstanding principal amount hereof from April 3, 1997, or from the most
recent interest payment date (each such date, an "Interest Payment Date") to
which interest has been paid or duly provided for, semi-annually (subject to
deferral as set forth herein) in arrears on April 1 and October 1 of each
year, commencing October 1, 1997 at the rate of 8.424% per annum until the
principal hereof shall have become due and payable, and at the same rate per
annum on any overdue principal and premium, if any, and (without duplication
and to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the same rate per
annum compounded semi-annually. The amount of interest payable on any
Interest Payment Date shall be computed on the basis of a 360-day year of
twelve 30-day months and, for any period less than a full calendar month, the
actual number of days elapsed in such month. In the event that any date on
which the principal of (or premium, if any) or interest on this Security is
payable is not a Business Day, then the payment payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that if such
Business Day falls in the next calendar year, such payment will be made on
the immediately preceding Business Day, in each case, with the same force and
effect as if made on the date such payment was originally payable. Pursuant
to the Registration Rights Agreement, in certain limited circumstances, the
Company will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement) with respect to this Security.
The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the person in whose name this Security (or one or more
Predecessor Securities, as defined in said Indenture) is registered at the
close of business on the regular record date for such interest installment,
which shall be the fifteenth (15th) day of the month preceding the month in
which the relevant Interest Payment Date falls. Notwithstanding the
foregoing, any interest that is payable on the Maturity Date will be payable
to the Person to whom principal payable at the Maturity Date shall be
payable. Any such interest installment not punctually paid or duly provided
for shall forthwith cease to be payable to the holders on such regular record
date and may be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a
special record date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the holders of
Securities not less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture.
The principal of (and premium, if any) and interest on this
Security shall be payable at the office or agency of the Trustee maintained
for that purpose in any coin or currency of the United States of America that
at the time of payment is legal tender for payment of public and private
debts; provided, however, that, payment of interest may be made at the
option of the Company by (i) check mailed to the holder at such address as
shall appear in the Security Register or (ii) by transfer to an account
maintained by the Person entitled thereto, provided that proper written
transfer instructions have been received by the relevant record date.
Notwithstanding the foregoing, so long as the holder of this Security is the
Property Trustee, the payment of the principal of (and premium, if any) and
interest on this Security will be made at such place and to such account as
may be designated by the Property Trustee. Payment of principal of this
Security shall only be made upon surrender of this Security to the Trustee or
paying agent.
The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each holder
of this Security, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his or her behalf
to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his or
her attorney-in-fact for any and all such purposes. Each holder hereof, by
his or her acceptance hereof, hereby waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Indebtedness, whether now outstanding or hereafter incurred,
and waives reliance by each such holder upon said provisions.
This Security shall not be entitled to any benefit under the
Indenture hereinafter referred to, or be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by or on behalf of the Trustee.
The provisions of this Security are continued on the reverse side hereof
and such provisions shall for all purposes have the same effect as though
fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed as of the date set forth below.
Dated: ____________________, 1997
EQUITABLE OF IOWA COMPANIES
By: ______________________________
Name: ____________________________
Title: _____________________________
By: ______________________________
Name: _____________________________
Title: ______________________________
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: ____________________, 1997
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: ________________________________
Authorized Officer
[Signature Page to Debenture]
(FORM OF REVERSE OF SECURITY)
This Security is one of the Subordinated Deferrable Interest
Debentures of the Company (herein sometimes referred to as the "Securities"),
specified in the Indenture, all issued or to be issued under and pursuant to
an Indenture, dated as of March 31, 1997 (the "Indenture"), duly executed
and delivered between the Company and The First National Bank of Chicago, as
Trustee (the "Trustee"), to which Indenture reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the
Securities, and to all of which provisions the holder of this Security, by
acceptance hereof, assents and agrees.
Upon the occurrence and continuation of a Special Event, the
Company shall have the right at any time, within 90 days following the
occurrence of a Special Event, to prepay this Security in whole (but not in
part) at the Special Event Prepayment Price. "Special Event Prepayment
Price" shall mean, with respect to any prepayment of the Securities following
a Special Event, an amount in cash equal to the greater of (i) 100% of the
principal amount to be prepaid, or (ii) the sum, as determined by a Quotation
Agent, of the present values of the principal amount of such Securities,
together with scheduled payments of interest from the prepayment date to the
Maturity Date, in each case discounted to the prepayment date on a
semi-annual basis (assuming a 360-day year of twelve 30-day months) at the
Adjusted Treasury Rate, plus, in each case, any accrued and unpaid interest
thereon, including Compounded Interest and Additional Interest, if any, to
the date of such prepayment.
"Special Event" means the occurrence and continuation of a Tax Event or
an Investment Company Event.
"Tax Event" means the receipt by the Administrative Trustees of an
opinion of indenpendent tax counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, 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 official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change
is effective or which pronouncement or decision is announced on or after
March 31, 1997, there is more than an insubstantial risk that (i) the Trust
is, or as a result of the issuance of Series B Securities would be, or will
be within 90 days of the date of such opinion, subject to United Stated
federal income tax with respect to income received or accrued on the
Securities, (ii) interest payable by the Company on the Securities is not, or
upon the issuance of any of the Series B Securities would not be, or within
90 days of the date of such opinion, will not be, deductible by the Company,
in whole or in part, for United States federal income tax purposes, or (iii)
the Trust is, or will be within 90 days of the date of such opinion, subject
to more than a de minimis amount of other taxes, duties or other governmental
charges.
"Investment Company Event" means a receipt by the Administrative
Trustees of an opinion of counsel to the Company experienced in such matters
to the effect that, as a result of the occurrence to any amendment to, or
change in law or regulation or a written change (including any announced
prospective change) in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority,
there is more than an insubstantial risk that the Trust is or will be
considered an "investment company" that is required to be registered under
the Investment Company Act of 1940, as amended, which amendment, change or
prospective change becomes effective or would become effective, as the case
may be, on or after the date of the offering memorandum pursuant to which the
Capital Securities are being offered.
In case an Event of Default, as defined in the Indenture, shall
have occurred and be continuing, the principal of all of the Securities may
be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in aggregate principal
amount of the Securities at the time outstanding, as defined in the
Indenture, to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of modifying in any manner the rights of the holders of
the Securities; provided, however, that no such supplemental indenture shall,
without the consent of each holder of Securities then outstanding and
affected thereby, (i) extend the Maturity Date of any Securities, or reduce
the principal amount thereof, or reduce any amount payable on prepayment
thereof, or reduce the rate or extend the time of payment of interest thereon
(subject to Article XVI of the Indenture), or make the principal of, or
interest or premium (if any) on, the Securities payable in any coin or
currency other than U.S. dollars, or impair or affect the right of any holder
of Securities to institute suit for the payment thereof, or (ii) reduce the
aforesaid percentage of Securities, the holders of which are required to
consent to any such supplemental indenture. The Indenture also contains
provisions permitting the holders of a majority in aggregate principal amount
of the Securities at the time outstanding, on behalf of all of the holders of
the Securities, to waive any past default in the performance of any of the
covenants contained in the Indenture, or established pursuant to the
Indenture, and its consequences, except a default in the payment of the
principal of or premium, if any, or interest on any of the Securities or a
default in respect of any covenant or provision under the Indenture which
cannot be modified or amended without the consent of each holder of
Securities then outstanding. Any such consent or waiver by the holder of
this Security (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and
owners of this Security and of any Security issued in exchange herefor or in
place hereof (whether by registration of transfer or otherwise), irrespective
of whether or not any notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Security at the time and place and at
the rate and in the money herein prescribed.
The Company shall have the right, at any time and from time to time
during the term of the Securities, to defer payments of interest by extending
the interest payment period of such Securities for a period not exceeding 10
consecutive semi-annual periods, including the first such semi-annual period
during such extension period, and not to extend beyond the Maturity Date of
the Securities (an "Extended Interest Payment Period"), at the end of which
period the Company shall pay all interest then accrued and unpaid (together
with interest thereon at the rate specified for the Securities to the extent
that payment of such interest is enforceable under applicable law). Before
the termination of any such Extended Interest Payment Period, the Company may
further defer payments of interest by further extending such Extended
Interest Payment Period, provided that such Extended Interest Payment Period,
together with all such previous and further extensions within such Extended
Interest Payment Period, shall not exceed 10 consecutive semi-annual periods,
including the first semi-annual period during such Extended Interest Payment
Period, shall not end on any date other than an Interest Payment Date or
extend beyond the Maturity Date of the Securities. Upon the termination of
any such Extended Interest Payment Period and the payment of all accrued and
unpaid interest and any additional amounts then due, the Company may commence
a new Extended Interest Payment Period, subject to the foregoing
requirements.
The Company has agreed that it will not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock
(which includes common, preferred and preference stock) or (ii) make any
payment of principal, interest or premium, if any, on or repay or repurchase
or redeem any debt securities of the Company (including any Other Debentures)
that rank pari passu with or junior in right of payment to the Securities or
(iii) make any guarantee payments with respect to any guarantee by the
Company of any securities of any Subsidiary of the Company (including Other
Guarantees) if such guarantee ranks pari passu or junior in right of payment
to the Securities (other than (a) dividends or distributions in shares of, or
options, warrants or rights to subscribe for or purchase shares of, common
stock of the Company; (b) any declaration of a dividend in connection with
the implementation of a stockholder's rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any
such rights pursuant thereto; (c) payments under the Capital Securities
Guarantee; (d) as a direct result of, and only to the extent required in
order to avoid the issuance of fractional shares of capital stock following,
a reclassification of the Company's capital stock or the exchange or the
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock or pursuant to an acquisition
in which the fractional shares of the Company's capital stock would otherwise
be issued; (e) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the exchange or conversion provisions of
such capital stock or the security being exchanged or converted; and (f)
purchases of common stock related to the issuance of common stock or rights
under any benefit plan for directors, officers, agents or employees of the
Company or its Subsidiaries or any of the Company's dividend reinvestment or
director, officer, agent or employee stock purchase plans), if at such time
(1) an Event of Default shall have occurred and be continuing, or would occur
upon the taking of any action specified in clauses (i) through (iii) above,
(2) there shall have occurred any event of which the Company has actual
knowledge that (a) with the giving of notice or the lapse of time, or both,
would be an Event of Default and (b) in respect of which the Company shall
not have taken reasonable steps to cure, (3) the Company shall be in default
with respect to its payment obligations under the Capital Securities
Guarantee or (4) the Company shall have given notice of its election of the
exercise of its right to extend the interest payment period under the
Indenture (or notice of a valid extension of an interest payment period in
accordance with the terms of any Other Debentures) and any such extension
shall not have been rescinded or such Extended Interest Payment Period, or
any extension thereof, or extension period with respect to Other Debentures,
shall be continuing.
The Company and the holder agree (i) that for United Stated federal,
state and local tax purposes it is intended that this Security consistute
indebtedness and (ii) to file all United States federal, state and local tax
returns and reports on such basis (unless the Company or holder, as the case
may be, shall have received an opinion of independent tax counsel experienced
in such matters to the effect that as a result of change in law after the
date of issuance of this Security the Company or the holder, as the case may
be, is prohibited from filing on such basis).
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in
the Indenture and subject to the transfer restrictions as may be contained
therein and herein from time to time, this Security is transferable by the
holder hereof on the Security register of the Company, upon surrender of this
Security for registration of transfer at the office or agency of the Company
in the City and State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Security
registrar duly executed by the holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Securities of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Security, the Company, the Trustee, any authenticating agent, any paying
agent, any transfer agent and the registrar may deem and treat the holder
hereof as the absolute owner hereof (whether or not this Security shall be
overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Security registrar) for the purpose of receiving
payment of or on account of the principal hereof and premium, if any, and
(subject to the Indenture) interest due hereon and for all other purposes,
and neither the Company nor the Trustee nor any authenticating agent nor any
paying agent nor any transfer agent nor any registrar shall be affected by
any notice to the contrary.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this Security, or for any claim based hereon,
or otherwise in respect hereof, or based on or in respect of the Indenture,
against any incorporator, stockholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor Person,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.
All terms used in this Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAW PROVISIONS THEREOF.
______________________________________________________________________________
ASSIGNMENT
I or we assign and transfer this Security to:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Print or type name, address, zip code and social security or tax I.D. number
of assignee)
and irrevocably appoint
_____________________________________________________________________________
_____________________________________________________________________________
Agent to transfer this Security on the books of the Company. The Agent may
substitute another to act for him.
Date: _______________ Signature:_____________________________________
(Sign exactly as name appears above)
Signature Guarantee: ______________________________
The signature to this Assignment must be guaranteed by a financial
institution that is a member of the Securities Transfer Agents Medallion
Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP") or the
New York Stock Exchange, Inc. Medallion Signature Program ("MSP").
EXHIBIT 4.2
CERTIFICATE OF TRUST
The undersigned, the trustees of Equitable of Iowa Companies Capital
Trust II, desiring to form a business trust pursuant to Delaware Business
Trust Act, 12 Del. C. Section 3810, hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust") is
"Equitable of Iowa Companies Capital Trust II."
2. The name and business address of the trustee of the Trust which has
its principal place of business in the State of Delaware is as
follows:
First Chicago Delaware, Inc.
300 King Street
Wilmington, Delaware 19801
3. This Certificate of Trust shall be effective as of the date of filing
with the office of the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Trust as of the date written below.
Dated: March 6, 1997
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: /s/ Richard D. Manella
________________________________
Name: Richard D. Manella
Title: Vice President
FIRST CHICAGO DELAWARE, INC.,
as Trustee
By: /s/ Richard D. Manella
________________________________
Name: Richard D. Manella
Title: Vice President
/s/ Paul E. Larson
__________________________________
Paul E. Larson, Trustee
/s/ John A. Merriman
__________________________________
John A. Merriman, Trustee
EXHIBIT 4.3
EQUITABLE OF IOWA COMPANIES
CAPITAL TRUST II
AMENDED AND RESTATED
DECLARATION OF TRUST
MARCH 31, 1997
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application
SECTION 2.2. Lists of Holders of Securities
SECTION 2.3. Reports by the Property Trustee
SECTION 2.4. Periodic Reports to Property Trustee
SECTION 2.5. Evidence of Compliance with Conditions Precedent
SECTION 2.6. Events of Default; Waiver
SECTION 2.7. Event of Default; Notice
ARTICLE III
ORGANIZATION
SECTION 3.1. Name
SECTION 3.2. Office
SECTION 3.3. Purpose
SECTION 3.4. Authority
SECTION 3.5. Title to Property of the Trust
SECTION 3.6. Powers and Duties of the Administrative Trustees
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees
SECTION 3.8. Powers and Duties of the Property Trustee
SECTION 3.9. Certain Duties and Responsibilities of the Property Trustee
SECTION 3.10. Certain Rights of Property Trustee
SECTION 3.11. Delaware Trustee
SECTION 3.12. [Intentionally Omitted]
SECTION 3.13. Not Responsible for Recitals or Issuances of Securities
SECTION 3.14. Duration of Trust
SECTION 3.15. Mergers
SECTION 3.16. Property Trustee May File Proofs of Claim
ARTICLE IV
SPONSOR
SECTION 4.1. Sponsor's Purchase of Common Securities
SECTION 4.2. Responsibilities of the Sponsor
SECTION 4.3. Right to Proceed
SECTION 4.4. Right to Dissolve Trust
ARTICLE V
TRUSTEES
SECTION 5.1. Number of Trustees; Appointment of Co-Trustee
SECTION 5.2. Delaware Trustee
SECTION 5.3. Property Trustee; Eligibility
SECTION 5.4. Certain Qualifications of Administrative Trustees
and Delaware Trustee Generally
SECTION 5.5. Administrative Trustees
SECTION 5.6. [Intentionally Omitted]
SECTION 5.7. Appointment, Removal and Resignation of Trustees
SECTION 5.8. Vacancies Among Trustees
SECTION 5.9. Effect of Vacancies
SECTION 5.10. Meetings
SECTION 5.11. Delegation of Power
SECTION 5.12. Merger, Conversion, Consolidation or Succession to Business
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1. Distributions
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities
SECTION 7.2. Execution and Authentication
SECTION 7.3. Form and Dating
SECTION 7.4. Registrar, Paying Agent and Exchange Agent
SECTION 7.5. Paying Agent to Hold Money in Trust
SECTION 7.6. Replacement Securities
SECTION 7.7. Outstanding Capital Securities
SECTION 7.8. Capital Securities in Treasury
SECTION 7.9. Temporary Securities
SECTION 7.10. Cancellation
SECTION 7.11. CUSIP Numbers
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1. Termination of Trust
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1. Transfer of Securities
SECTION 9.2. Transfer Procedures and Restrictions
SECTION 9.3. Book Entry Interests
SECTION 9.4. Notices to Clearing Agency
SECTION 9.5. Appointment of Successor Clearing Agency
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 10.1. Liability
SECTION 10.2. Exculpation
SECTION 10.3. Fiduciary Duty
SECTION 10.4. Indemnification
SECTION 10.5. Outside Businesses
SECTION 10.6. Compensation; Fees
ARTICLE XI
ACCOUNTING
SECTION 11.1. Fiscal Year
SECTION 11.2. Certain Accounting Matters
SECTION 11.3. Banking
SECTION 11.4. Withholding
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1. Amendments
SECTION 12.2. Meetings of the Holders; Action by Written Consent
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1. Representations and Warranties of Property Trustee
SECTION 13.2. Representations and Warranties of Delaware Trustee
ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.1. Registration Rights Agreement
ARTICLE XV
MISCELLANEOUS
SECTION 15.1. Notices
SECTION 15.2. Governing Law
SECTION 15.3. Intention of the Parties
SECTION 15.4. Headings
SECTION 15.5. Successors and Assigns
SECTION 15.6. Partial Enforceability
SECTION 15.7. Counterparts
CROSS-REFERENCE TABLE *
Section of Trust
Indenture Act of Section of
1939, as amended Declaration
310(a) ............................... 5.3(a)
310(b) ............................... 5.3(c), (d)
310(c) ............................... Inapplicable
311(a) ............................... 2.2(b)
311(b) ............................... 2.2(b)
311(c) ............................... Inapplicable
312(a) ............................... 2.2(a)
312(b) ............................... 2.2(b)
313 ............................... 2.3
314(a) ............................... 2.4, 3.6(i)
314(b) ............................... Inapplicable
314(c) ............................... 2.5
314(d) ............................... Inapplicable
314(e) ............................... 2.5
315(a) ............................... 3.9(a), (b)
315(b) ............................... 2.7(a)
315(c) ............................... 3.9(a)
315(d) ............................... 3.9(b)
316(a) ............................... 2.6
316(c) ............................... 3.6(e)
317(a) ............................... 3.8(h), 3.16
317(b) ............................... 3.8(i)
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or provisions.
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
EQUITABLE OF IOWA COMPANIES CAPITAL TRUST II
March 31, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of March 31, 1997, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the assets of the Trust to be issued
pursuant to this Declaration;
WHEREAS, the Delaware Trustee (as defined herein), the Property Trustee
(as defined herein) and the Sponsor established Equitable of Iowa Companies
Capital Trust II (the "Trust"), a trust created under the Delaware Business
Trust Act pursuant to a Declaration of Trust dated as of March 6, 1997 (the
"Original Declaration"), and a Certificate of Trust filed with the Secretary
of State of the State of Delaware on March 7, 1997, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Debentures of the Debenture Issuer (each as hereinafter defined); and
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
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 Trust and the Holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions.
___________
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(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.
"Administrative Trustee" has the meaning set forth in Section 5.1(b).
"Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent, Registrar or Exchange Agent.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Book Entry Interest" means a beneficial interest in a Global Capital
Security certificate registered in the name of a Clearing Agency or its
nominee, ownership and transfers of which shall be maintained and made through
book entries by a Clearing Agency as described in Section 9.2.
"Business Day" means any day other than a Saturday or a Sunday or a day
on which banking institutions in the City of New York, New York are authorized
or required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Section 3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Capital Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Capital Securities" means, collectively, the Series A Capital Securities
and the Series B Capital Securities.
"Capital Securities Guarantee" means, collectively, the Series A Capital
Securities Guarantee and the Series B Capital Securities Guarantee.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for
the Capital Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Capital Security and which shall
undertake to effect book entry transfers and pledges of the Capital Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Time" means the "Closing Time" under the Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the United States Securities and Exchange Commission
as from time to time constituted, or if any time after the execution of this
Declaration such Commission is not existing and performing the duties now
assigned to it under applicable Federal securities laws, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in Section 7.1(a).
"Common Securities Guarantee" means the guarantee agreement dated as of
April 3, 1997 of the Sponsor in respect of the Common Securities.
"Company" means the Debenture Issuer.
"Company Indemnified Person" means (a) any Administrative Trustee; (b)
any Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any officer, employee or agent of the Trust or
its Affiliates.
"Corporate Trust Office" means the office of the Property Trustee at
which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at One First National Plaza - Suite
0126, Chicago, Illinois 60670-0126.
"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 Equitable of Iowa Companies, an Iowa corporation,
or any successor entity permitted under the Indenture including a successor
entity resulting from any consolidation, amalgamation, merger, sale of assets
as an entirety or substantially as an entirety, transfer, lease, or other
business combination, in its capacity as issuer of the Debentures under the
Indenture.
"Debenture Trustee" means The First National Bank of Chicago, as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Debentures" means, collectively, the Series A Debentures and the Series
B Debentures.
"Default" means an event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Definitive Capital Securities" shall have the meaning set forth in
Section 7.3(c).
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Direct Action" shall have the meaning set forth in Section 3.8(e).
"Distribution" means a distribution payable to Holders in accordance with
Section 6.1 and Annex I.
"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.
"Exchange Agent" has the meaning set forth in Section 7.4.
"Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement (i) by the Trust to exchange Series B Capital
Securities for Series A Capital Securities and (ii) by the Debenture Issuer
to exchange Series B Debentures for Series A Debentures and the Series B
Capital Securities Guarantee for the Series A Capital Securities Guarantee.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Capital Securities" has the meaning set forth in Section 7.3(a).
"Holder" means a Person in whose name a Security is registered on the
register for the Securities, such Person being a beneficial owner within the
meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture dated as of March 31, 1997, among the
Debenture Issuer and The First National Bank of Chicago, as amended from time
to time.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Like Amount" has the meaning set forth in Annex I hereto.
"List of Holders" has the meaning set forth in Section 2.2(a).
"Majority in liquidation amount" means, with respect to the Trust
Securities, except as provided in the terms of the Capital Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Capital Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of 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.
"Offering Memorandum" has the meaning set forth in Section 3.6(b)(i).
"Officers' Certificate" means, with respect to any Person (other than
Administrative Trustees who are natural persons), a certificate signed by two
Authorized Officers of such Person. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
provided, that the term "Officers' Certificate" when used with reference to
Administrative Trustees who are natural persons shall mean a certificate signed
by two of the Administrative Trustees which otherwise satisfies the foregoing
requirements.
"Opinion of Counsel" shall mean a written opinion of counsel, who may be
an employee of the Sponsor, and who shall be, and which opinion shall be,
acceptable to the Property Trustee.
"Paying Agent" has the meaning specified in Section 7.4.
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Property Trustee" has the meaning set forth in Section 5.3(a).
"Property Trustee Account" has the meaning set forth in Section 3.8(c).
"Purchase Agreement" means the Purchase Agreement for the initial offering
and sale of Capital Securities dated as of March 31, 1997, among the Trust, the
Company, Merrill Lynch & Co., and Merrill Lynch, Pierce Fenner & Smith
Incorporated.
"QIBs" shall mean qualified institutional buyers as defined in Rule 144A.
"Quorum" means a majority of the Administrative Trustees or, if there are
only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of April 3, 1997, by and among the Trust, the Debenture Issuer and the
Initial Purchaser named therein, as amended from time to time.
"Registration Statement" has the meaning set forth in the Registration
Rights Agreement.
"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 Property Trustee, any
officer within the Corporate Trust Office of the Property Trustee, including
any vice-president, any assistant vice-president, any secretary, any assistant
secretary, the treasurer, any assistant treasurer, or other officer of the
Corporate Trust Office of the Property Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Restricted Definitive Capital Securities" has the meaning set forth in
Section 7.3(c).
"Restricted Capital Security" means a Capital Security required by Section
9.2 to contain a Restricted Securities Legend.
"Restricted Securities Legend" has the meaning set forth in Section
9.2(h).
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
successor rule or regulation.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act, or any
successor rule or regulation.
"Rule 144" means Rule 144 under the Securities Act, as such rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.
"Rule 144A" means Rule 144A under the Securities Act, as such rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.
"Securities" or "Trust Securities" means the Common Securities and the
Capital Securities.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Capital Securities Guarantee.
"Series A Capital Securities" has the meaning specified in Section 7.1(a).
"Series B Capital Securities" has the meaning specified in Section 7.1(a).
"Series A Capital Securities Guarantee" means the guarantee agreement
dated as of April 3, 1997 of the Sponsor in respect of the Series A Capital
Securities.
"Series B Capital Securities Guarantee" means the guarantee agreement to
be entered in connection with the Exchange Offer by the Sponsor in respect of
the Series B Capital Securities.
"Series A Debentures" means the 8.424% Series A Subordinated Deferrable
Interest Debentures due April 1, 2027 of the Debenture Issuer issued pursuant
to the Indenture.
"Series B Debentures" means the 8.424% Series B Subordinated Deferrable
Interest Debentures due April 1, 2027 of the Debenture Issuer issued pursuant
to the Indenture.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means Equitable of Iowa Companies, an Iowa corporation, or any
successor entity permitted under the Indenture including a successor entity
resulting from any merger, consolidation, amalgamation, sale of assets as an
entirety or substantially as an entirety, transfer, lease or other business
combination, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.7(b)(ii).
"Successor Entity" has the meaning specified in Section 3.15(b)(i).
"Successor Property Trustee" has the meaning set forth in Section
3.8(f)(ii).
"Successor Securities" has the meaning specified in 3.15(b)(i)(B).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"10% in liquidation amount" means, with respect to the Trust Securities,
except as provided in the terms of the Capital Securities or by the Trust
Indenture Act, Holder(s) of outstanding Trust Securities voting together as a
single class or, as the context may require, Holders of outstanding Capital
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 10% or more of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all outstanding Securities
of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance
with the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Unrestricted Global Capital Security" has the meaning set forth in
Section 9.2(b) .
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 Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310 to
317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2. Lists of Holders of Securities.
______________________________
(a) Each of the Sponsor and the Administrative Trustees on behalf
of the Trust shall provide the Property Trustee, unless the Property
Trustee is Registrar for the Securities (i) within one Business Day after
January 1 and June 30 of each year and current as of such date, a list, in
such form as the Property Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") as of such record date,
provided that neither the Sponsor nor the Administrative Trustees on
behalf of the Trust shall be obligated to provide such List of Holders at
any time the List of Holders does not differ from the most recent List of
Holders given to the Property Trustee by the Sponsor and the
Administrative Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the 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 Property Trustee. The Property Trustee shall
preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it
receives in the capacity as Registrar (if acting in such capacity),
provided that the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Property Trustee.
_______________________________
Within 60 days after May 15 of each year, commencing with the year of the
first anniversary of the issuance of the Capital Securities, the Property
Trustee shall provide to the Holders of the Capital Securities such reports as
are required by Section 313(a) of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture Act. The
Property Trustee shall also comply with the other requirements of Section 313
of the Trust Indenture Act. The Sponsor shall promptly notify the Property
Trustee when the Capital Securities are listed on any stock exchange.
SECTION 2.4. Periodic Reports to Property Trustee.
____________________________________
Each of the Sponsor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information
as are required by Section 314 (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, such compliance
certificate to be delivered annually on or before 120 days after the end of
each fiscal year of the Sponsor.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
________________________________________________
Each of the Sponsor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent provided for in this Declaration that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c) (1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 2.6. Events of Default; Waiver.
_________________________
(a) The Holders of a Majority in liquidation amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a
majority in aggregate 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 aggregate liquidation
amount of the Capital Securities that the relevant Super Majority
represents of the aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with respect to the
Capital Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Capital
Securities or impair any right consequent thereon. Any waiver by the Holders
of the Capital Securities of an Event of Default with respect to the Capital
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
The Holders of a Majority in liquidation amount of the Capital Securities
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee or to direct the
exercise of any trust or power conferred upon the Property Trustee, including
the right to direct the Property Trustee to exercise the remedies available to
it as holder of the Debentures; provided, however, that (subject to the
provisions of Section 3.9) the Property Trustee shall have the right to
decline to follow any such direction if the Property Trustee shall determine
that the action so directed would be unjustly prejudicial to the Holders not
taking part in such direction or if the Property Trustee, being advised by
counsel, determines that the action or proceeding so directed may not lawfully
be taken or if the Property Trustee, in good faith, by its Responsible
Officers, shall determine that the action or proceedings so directed would
involve the Property Trustee in personal liability.
(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 aggregate liquidation amount of the Common
Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect
to the Common Securities and its consequences if all Events of Default
with respect to the Capital Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting
solely on behalf of the Holders of the Capital Securities and only the
Holders of the Capital Securities will have the right to direct the
Property Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this 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
Property Trustee, at the direction of the Holders of the Capital
Securities, constitutes a waiver of the corresponding Event of Default
under this Declaration. The foregoing provisions of this Section 2.6(c)
shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and
such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act.
SECTION 2.7. Event of Default; Notice.
________________________
(a) The Property Trustee shall, within five Business Days after
the occurrence of an Event of Default is actually known to a Responsible
Officer of the Property Trustee, transmit by mail, first class postage
prepaid, to the Holders of the Securities, the Sponsor and the
Administrative Trustees, notice of all defaults with respect to the
Securities actually known to a Responsible Officer of the Property Trustee,
unless such defaults have been cured before the giving of such notice (the
term "defaults" for the purposes of this Section 2.7(a) being hereby
defined to be an Event of Default as defined in the Indenture, not
including any periods of grace provided for therein and irrespective
of the giving of any notice provided therein); provided that, except for
a default in the payment of principal of (or premium, if any) or interest
on any of the Debentures, the Property Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the
Property Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.
(b) The Property 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 relating to the Debentures; or
(ii) any default as to which the Property Trustee shall
have received written notice or of which a Responsible Officer of the
Property Trustee charged with the administration of the Declaration
shall have actual knowledge.
(c) The Sponsor and the Administrative Trustees shall file
annually with the Property Trustee in accordance with Section 2.4 a
certification as to whether or not they are in compliance with all the
conditions and covenants applicable to them under this Declaration.
ARTICLE III
ORGANIZATION
SECTION 3.1. Name.
____
The Trust is named "Equitable of Iowa Companies Capital Trust II" as such
name may be modified from time to time by the Administrative Trustees following
written notice to the Holders of Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Administrative Trustees.
SECTION 3.2. Office.
______
The address of the principal office of the Trust is c/o Equitable of Iowa
Companies, 604 Locust Street, Des Moines, Iowa 50309 . On ten Business Days
written notice to the Holders of Securities, the Administrative Trustees may
designate another principal office.
SECTION 3.3. Purpose.
_______
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities, (b) use the proceeds from the sale of the Securities to
acquire the Debentures, and (c) except as otherwise limited herein, to engage
in only those other activities necessary, advisable or incidental thereto. The
Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, mortgage or pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
The Trust will be classified as a grantor trust for United States federal
income tax purposes under Subpart E of Subchapter J of the Code, pursuant to
which the owners of the Capital Securities and the Common Securities will be
the owners of the Trust for United States federal income tax purposes, and such
owners will include directly in their gross income the income, gain, deduction
or loss of the Trust as if the Trust did not exist. By the acceptance of this
Trust, none of the Trustees, the Sponsor, the Holders of the Capital Securities
or Common Securities or the Capital Securities Beneficial Owners will take any
position for United States federal income tax purposes which is contrary to the
classification of the Trust as a grantor trust.
SECTION 3.4. Authority.
_________
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Administrative Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Administrative Trustees in accordance with their powers
shall constitute the act of and serve to bind the Trust and an action taken by
the Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust
are entitled to rely conclusively on the power and authority of the Trustees as
set forth in this Declaration.
SECTION 3.5. Title to Property of the Trust.
______________________________
Except as provided in Section 3.8 with respect to the Debentures and the
Property Trustee Account or as otherwise provided in this 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 Administrative Trustees.
________________________________________________
The Administrative Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that except, as contemplated in Section
7.1(a), in the case of (i) and (ii), (i) the Trust may issue no more than
one series of Capital Securities and no more than one series of Common
Securities, (ii) there shall be no interests in the Trust other than the
Securities, and (iii) the issuance of Securities shall be limited to a
simultaneous issuance of both Capital Securities and Common Securities at
any Closing Time;
(b) in connection with the issue and sale of the Capital
Securities and the consummation of the Exchange Offer, at the direction of
the Sponsor, to:
(i) execute, if necessary, an offering memorandum (the
"Offering Memorandum") prepared by the Sponsor, in relation to the
offering and sale of Series A Capital Securities to qualified
institutional buyers in reliance on Rule 144A under the Securities
Act and to institutional "accredited investors" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act), and to execute
and file with the Commission, at such time as determined by the
Sponsor, any Registration Statement, including any amendments
thereto, as contemplated by the Registration Rights Agreement;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be
necessary in order to qualify or register all or part of the Capital
Securities in any State in which the Sponsor has determined to qualify
or register such Capital Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange or any other national stock
exchange or the NASDAQ Stock Market's National Market for listing or
quotation of the Capital Securities;
(iv) to execute and deliver letters, documents, or
instruments with DTC and other Clearing Agencies relating to the
Capital Securities;
(v) if required, execute and file with the Commission a
registration statement on Form 8-A, including any amendments thereto,
prepared by the Sponsor, relating to the registration of the Capital
Securities under Section 12(b) of the Exchange Act; and
(vi) execute and enter into the Purchase Agreement and the
Registration Rights Agreement providing for the sale of the Capital
Securities;
(c) to acquire the Series A Debentures with the proceeds of the
sale of the Series A Capital Securities and the Common Securities and to
exchange the Series A Debentures for a like principal amount of Series B
Debentures, pursuant to the Exchange Offer; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be
held of record in the name of the Property Trustee for the benefit of the
Trust and the Holders;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of Section 316(c) of the Trust Indenture
Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices, which are not or have not been issued by the Property
Trustee as provided herein, to the Holders of Capital Securities and
Holders of Common Securities as to such actions and applicable record
dates;
(f) to take all actions and perform such duties as may be required
of the Administrative Trustees pursuant to the terms of the Securities set
forth in Annex I hereto;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against
the Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property
Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be
executed by any Administrative Trustee;
(k) to incur expenses that are necessary or desirable to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar and
Exchange Agent for the Securities or to appoint a Paying Agent for the
Securities as provided in Section 7.4 except for such time as such power
to appoint a Paying Agent is vested in the Property Trustee;
(m) to give prompt written notice to the Property Trustee and to
Holders of any notice received from the Debenture Issuer of its election
to defer payments of interest on the Debentures by extending the interest
payment period under the Indenture;
(n) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the
laws of the State of Delaware and of each other jurisdiction in which
such existence is necessary to protect the limited liability of the Holders
of the Capital Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(o) to take any action, not inconsistent with this Declaration or
with applicable law, that the Administrative Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that
the Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes.
provided that such action does not adversely affect the interests of the
Holders;
(p) to take all action necessary to consummate the Exchange Offer
or otherwise cause the Capital Securities to be registered pursuant to an
effective registration statement in accordance with the provisions of the
Registration Rights Agreement;
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the Administrative
Trustees, on behalf of the Trust; and
(r) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all matters
necessary or desirable to the foregoing.
The Administrative Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Administrative Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees shall have none
of the powers or the authority of the Property Trustee set forth in Section
3.8.
Any expenses incurred by the Administrative Trustees pursuant to this
Section 3.6 shall be reimbursed by the Sponsor. The Administrative Trustees
shall take all actions on behalf of the Trust that are not specifically
required by this Declaration to be taken by any other Trustee.
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees.
____________________________________________________
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall cause the Trust not to, engage in any activity other than
as required or authorized by this Declaration. In particular, the Trust
shall not and the Trustees (including the Property Trustee) shall cause
the Trust not to:
(i) invest any proceeds received by the Trust from holding
the Debentures, but shall distribute all such proceeds to Holders
pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than
loans represented by the Debentures or pledge any assets or enter
into any mortgages;
(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 (except to the extent expressly authorized in this
Declaration or by the terms of the Securities);
(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 conducting any proceeding
with respect to any remedy available to the Debenture Trustee, or
exercise any trust or power conferred upon the Debenture Trustee with
respect to the Debentures, (B) waive any past default that is
waivable under the Indenture, (C) exercise any right to rescind or
annul 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
counsel 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 Property Trustee.
_________________________________________
(a) The legal title to the Debentures shall be owned by and held
of record in the name of the Property Trustee in trust for the benefit of
the Trust and the Holders. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 5.7.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed
and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees or to the
Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-
interest bearing trust account (the "Property Trustee
Account") in the name of and under the exclusive control of
the Property Trustee on behalf of the Holders and, upon the
receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds
into the Property Trustee Account and make payments to the
Holders of the Capital Securities and Holders of the Common
Securities from the Property Trustee Account in accordance
with Section 6.1. Funds in the Property Trustee Account
shall be held uninvested until disbursed in accordance with
this Declaration. The Property Trustee Account shall be an
account that is maintained with a banking institution the
rating on whose long-term unsecured indebtedness is at least
equal to the rating assigned to the Capital Securities by a
"nationally recognized statistical rating organization", as
that term is defined for purposes of Rule 436(g)(2) under the
Securities Act;
(ii) engage in such ministerial activities as
shall be necessary or appropriate to effect the redemption of
the Securities to the extent the Debentures are redeemed or
mature; and
(iii) upon written notice of distribution issued by
the Administrative Trustees in accordance with the terms of
the Securities, engage in such ministerial activities as
shall be necessary or appropriate to effect the distribution
of the Debentures to Holders of Securities upon the
occurrence of certain events.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to
the terms of the Securities set forth in Annex I hereto.
(e) Subject to Section 3.9(a), the Property Trustee may take any
Legal Action which arises out of or in connection with an Event of Default
of which a Responsible Officer of the Property Trustee has actual
knowledge or the Property Trustee's duties and obligations under this
Declaration or the Trust Indenture Act. If the Property Trustee shall
have failed to take such Legal Action, to the fullest extent permitted by
law, the Holders of the Capital Securities may institute a legal
proceeding directly against the Debenture Issuer to enforce the Property
Trustee's rights under the Debentures, without first proceeding against
the Property Trustee, the Trust or any other Person; provided however,
that if an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Debenture Issuer to pay the
principal of or premium, if any, or interest on the Debentures on the date
such principal, premium, if any, or interest is otherwise payable (or in
the case of redemption, on the redemption date), then a Holder of Capital
Securities may pursuant to Section 5.04 of the Indenture directly
institute a proceeding for enforcement of payment to such Holder of the
principal of or premium, if any, or interest on the Debentures having a
principal amount equal to the aggregate liquidation amount of the Capital
Securities of such Holder (a "Direct Action") on or after the respective
due date specified in the Debentures. In connection with such Direct
Action, the rights of the Holders of the Common Securities will be
subrogated to the rights of such Holder of Capital Securities to the
extent of any payment made by the Debenture Issuer to such Holder of
Capital Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Capital Securities will not be able to
exercise directly any other remedy available to the holders of the
Debentures.
(f) Subject to Section 5.7 hereof, the Property Trustee shall
continue to serve as a Trustee until either:
(i) the Trust has been completely liquidated and
the proceeds of the liquidation distributed to the Holders of
the Securities pursuant to the terms of the Securities set
forth in Annex I hereto; or
(ii) a successor Property Trustee has been
appointed and has accepted that appointment in accordance with
Section 5.7 (a "Successor Property Trustee").
(g) The Property Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under
the Indenture and, if an Event of Default actually known to a Responsible
Officer of the Property Trustee occurs and is continuing, the Property
Trustee may, for the benefit of Holders, enforce its rights as holder of
the Debentures subject to the rights of the Holders pursuant to the terms
of such Securities.
(h) The Property Trustee shall be authorized to undertake any
actions set forth in Section 317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the Paying Agent,
the Property Trustee may authorize one or more Persons to act as additional
Paying Agents and to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any
such Paying Agent shall comply with Section 317(b) of the Trust Indenture
Act. Any such additional Paying Agent may be removed by the Property
Trustee at any time the Property Trustee remains as Paying Agent and a
successor Paying Agent or additional Paying Agents may be (but are not
required to be) appointed at any time by the Property Trustee while the
Property Trustee is so acting as Paying Agent.
(j) Subject to this Section 3.8, the Property Trustee shall have
none of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this Section
3.8 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Property Trustee shall not take any action that
is inconsistent with the purposes and functions of the Trust set out in Section
3.3.
SECTION 3.9. Certain Duties and Responsibilities of the Property Trustee.
___________________________________________________________
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically
set forth in this Declaration and in the Securities and no implied
covenants shall be read into this Declaration against the Property
Trustee. In case an Event of Default has occurred (that has not been
cured or waived pursuant to Section 2.6) of which a Responsible Officer of
the Property Trustee has actual knowledge, the Property Trustee shall
exercise such of the rights and powers vested in it by this 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 Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Declaration and in the Securities and the Property
Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in
this Declaration and in the Securities, and no implied
covenants or obligations shall be read into this Declaration
or the Securities against the Property Trustee; and
(B) in the absence of bad faith on the part of
the Property Trustee, the Property Trustee may conclusively
rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or
opinions furnished to the Property Trustee and conforming to
the requirements of this Declaration; provided, however, that
in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to
the Property Trustee, the Property Trustee shall be under a
duty to examine the same to determine whether or not they
conform to the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the Property Trustee
was negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Capital Securities relating to
the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if it 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
Declaration or indemnity reasonably satisfactory to the Property
Trustee against such risk or liability is not reasonably assured to
it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Property Trustee Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Property Trustee under this Declaration and
the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability
for or with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
in writing with the Sponsor. Money held by the Property Trustee need
not be segregated from other funds held by it except in relation to
the Property Trustee Account maintained by the Property Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise
required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Sponsor with their respective duties under this Declaration, nor
shall the Property Trustee be liable for any default or misconduct of
the Administrative Trustees or the Sponsor.
SECTION 3.10. Certain Rights of Property Trustee.
__________________________________
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall
be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) any direction or act of the Sponsor or the
Administrative Trustees contemplated by this Declaration may be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Declaration,
the Property Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its
part, request and be entitled to receive and conclusively rely upon
an Officers' Certificate which, upon receipt of such request, shall
be promptly delivered by the Sponsor or the Administrative Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion, such counsel may be counsel to the Sponsor or any
of its Affiliates, and may include any of its employees. The Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holder, unless such Holder shall
have provided to the Property Trustee security and indemnity,
satisfactory to the Property Trustee, against the costs, expenses
(including reasonable attorneys' fees and expenses and the expenses
of the Property Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be
requested by the Property Trustee provided, that, nothing contained
in this Section 3.10(a)(vi) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly
or by or through agents, custodians, nominees or attorneys and the
Property Trustee shall not be responsible for any misconduct or
negligence on the part of or for the supervision of any agent or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Property Trustee or its agents
alone shall be sufficient and effective to perform any such action
and no third party shall be required to inquire as to the authority
of the Property Trustee to so act or as to its compliance with any
of the terms and provisions of this Declaration, both of which shall
be conclusively evidenced by the Property Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Declaration
the Property Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Property Trustee (i) may request instructions
from the Holders of the Securities which instructions may only be
given by the Holders of the same proportion in liquidation amount of
the Securities as would be entitled to direct the Property Trustee
under the terms of the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in
accordance with such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any obligation
to take any action that is discretionary under the provisions of this
Declaration; and
(xii) the Property Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or acts
or exercise any right, power, duty or obligation conferred or imposed on
it, in any jurisdiction in which it shall be illegal, or in which the
Property Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts, or to exercise any such
right, power, duty or obligation or which would expose the Property
Trustee to liability, financial or otherwise. No permissive power or
authority available to the Property Trustee shall be construed to be a
duty.
SECTION 3.11. Delaware Trustee.
________________
Notwithstanding any other provision of this Declaration other than
Section 5.2 (and subject to Section 5.2), the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of
the duties and responsibilities of the Administrative Trustees, the Property
Trustee or the Trustees generally (except as required under the Business Trust
Act) described in this Declaration. Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.
SECTION 3.12. [INTENTIONALLY OMITTED]
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities.
______________________________________________________
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration, the Debentures, the Securities or the Indenture.
SECTION 3.14. Duration of Trust.
_________________
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall have existence up to March 31, 2028.
SECTION 3.15. Mergers.
_______
(a) The Trust may not merge with or convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties
and assets as an entirety or substantially as an entirety to any Person,
except as described in Section 3.15(b) and (c) or Section 3 of Annex I.
(b) The Trust may, at the request of the Sponsor, with the consent
of the Administrative Trustees or, if there are more than two, a majority
of the Administrative Trustees and without the consent of the Holders of
Securities, the Delaware Trustee or the Property Trustee, merge with or
convert into, consolidate, amalgamate, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or
substantially as an entirety to, a trust organized as such under the laws
of any State; provided that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of
the Trust under the Securities; or
(B) substitutes for the Securities other
securities having substantially the same terms as the
Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Securities rank
with respect to Distributions and payments upon liquidation,
redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of the
Successor Entity that possesses the same powers and duties as the
Property Trustee as the holder of the Debentures;
(iii) the Successor Securities that are issued in place of
the Capital Securities are listed, or any such Successor Securities
will be listed upon notification of issuance, on any national
securities exchange or with another organization on which the Capital
Securities are then listed or quoted, if any;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Capital Securities
(including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of 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 substantially
identical to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Sponsor has received
an opinion of an independent counsel to the Trust experienced in such
matters to the effect that:
(A) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the Holders
of 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, replacement, conveyance, transfer or lease,
neither the Trust nor the Successor Entity will be required
to register as an Investment Company; and
(C) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, 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 or any permitted successor or assignee
owns all of the common securities of such Successor Entity and
guarantees the obligations of such Successor Entity under the
Successor Securities at least to the extent provided by the Capital
Securities Guarantee and the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced
by, or convey, transfer or lease its properties and assets as an entirety
or substantially as an entirety to, any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger, replacement, conveyance,
transfer or lease would cause the Trust or the Successor Entity not to be
classified as a grantor trust for United States federal income tax
purposes.
SECTION 3.16 Property Trustee May File Proofs of Claim.
_________________________________________
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon
the Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due
Distributions) shall be entitled and empowered, to the fullest extent
permitted by law, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Securities
(or, if the Securities are original issue discount
Securities, such portion of the liquidation amount as may be
specified in the terms of such Securities) and to file such
other papers or documents as may be necessary or advisable in
order to have the claims of the Property Trustee (including
any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its
agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(b) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Property Trustee and, in the event
the Property Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Property Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Property
Trustee, its agents and counsel, and any other amounts due the Property
Trustee.
Nothing herein contained shall be deemed to authorize the Property Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or compensation affecting the
Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
ARTICLE IV
SPONSOR
SECTION 4.1. Sponsor's Purchase of Common Securities.
_______________________________________
At the Closing Time, the Sponsor will purchase all of the Common
Securities then issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Series A Capital Securities are
issued and sold.
SECTION 4.2. Responsibilities of the Sponsor.
_______________________________
In connection with the issue and sale of the Capital Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare the Offering Memorandum and to prepare for filing
by the Trust with the Commission any Registration Statement, including any
amendments thereto as contemplated by the Registration Rights Agreement;
(b) to determine the States in which to take appropriate action
to qualify or register for sale all or part of the Capital Securities and
to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) if deemed necessary or advisable by the Sponsor, to prepare
for filing by the Trust an application to the New York Stock Exchange or
any other national stock exchange or the NASDAQ National Market for
listing or quotation of the Capital Securities;
(d) if deemed necessary or advisable by the Sponsor, to prepare
for filing by the Trust with the Commission a registration statement on
Form 8-A relating to the registration of the Capital Securities under
Section 12(b) of the Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of the Purchase Agreement and the
Registration Rights Agreement providing for the sale of the Capital
Securities.
SECTION 4.3. Right to Proceed.
________________
The Sponsor acknowledges the rights of the Holders of Capital Securities,
in the event that a failure of the Trust to pay Distributions on the Capital
Securities is attributable to the failure of the Company to pay interest or
principal on the Debentures, to institute a proceeding directly against the
Debenture Issuer for enforcement of its payment obligations on the
Debentures.
SECTION 4.4 Right to Dissolve Trust.
_______________________
The Sponsor shall have the right at any time after the Closing Date to
elect to dissolve the Trust in accordance with the terms of the Securities and
Section 8.1(a)(iii) and to direct the Property Trustee to take such action as
shall be necessary to distribute the Debentures to the Holders of the
Securities in exchange for all of the Securities.
ARTICLE V
TRUSTEES
SECTION 5.1. Number of Trustees; Appointment of Co-Trustee.
_____________________________________________
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Securities, the number of Trustees
may be increased or decreased by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities; provided, however, that, the
number of Trustees shall in no event be less than two (2); provided
further that (1) the Delaware Trustee, in the case of a natural person,
shall be a person who is a resident of the State of Delaware or that, if
not a natural person, is an entity which has its principal place of
business in the State of Delaware and otherwise meets the requirements of
applicable law; (2) there shall be at least one Trustee who is an employee
or officer of, or is affiliated with the Sponsor (an "Administrative
Trustee"); and (3) one Trustee shall be the Property Trustee for so long
as this 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. Notwithstanding the above, unless an
Event of Default shall have occurred and be continuing, at any time or
times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust's
property may at the time be located, the Holders of a Majority in
liquidation amount of the Common Securities acting as a class at a meeting
of the Holders of the Common Securities, and the Administrative Trustees
shall have power to appoint one or more Persons either to act as a
co-trustee, jointly with the Property Trustee, of all or any part of the
Trust's property, or to act as separate trustee of any such property, in
either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or persons in such capacity any
property, title, right or power deemed necessary or desirable, subject
to the provisions of this Declaration. In case an Event of Default has
occurred and is continuing, the Property Trustee alone shall have power to
make any such appointment of a co-trustee.
SECTION 5.2. Delaware Trustee.
________________
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware;
or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law, provided that, if the Property Trustee has
its principal place of business in the State of Delaware and otherwise
meets the requirements of applicable law, then the Property Trustee shall
also be the Delaware Trustee and Section 3.11 shall have no application.
(c) The initial Delaware Trustee shall be:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
SECTION 5.3. Property Trustee; Eligibility.
_____________________________
(a) There shall at all times be one Trustee (the "Property
Trustee") which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 5.3(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report
of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by means of Rule 3a-7 and to the extent Rule
3a-7 requires a trustee having certain qualifications to hold title to
the "eligible assets" (as defined in Rule 3a-7) of the Trust, the
Property Trustee shall possess those qualifications.
(b) If at any time the Property Trustee shall cease to be eligible
to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Property Trustee and the Holder of the Common Securities (as if it
were the obligor referred to in Section 310(b) of the Trust Indenture Act)
shall in all respects comply with the provisions of Section 310(b) of the
Trust Indenture Act.
(d) The Capital Securities Guarantee and the Indenture shall be
deemed to be specifically described in this Declaration for purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
(e) The initial Property Trustee shall be:
The First National Bank of Chicago
One First National Plaza - Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
SECTION 5.4. Certain Qualifications of Administrative Trustees and
_____________________________________________________
Delaware Trustee Generally.
__________________________
Each Administrative Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5. Administrative Trustees.
_______________________
The Administrative Trustees shall be:
Fred S. Hubbell
Paul E. Larson
John A. Merriman
c/o Equitable of Iowa Companies
604 Locust Street
Des Moines, Iowa 50309
(a) Except as expressly set forth in this Declaration and except
if a meeting of the Administrative Trustees is called with respect to any
matter over which the Administrative Trustees have power to act, any power
of the Administrative Trustees may be exercised by, or with the consent
of, any one such Administrative Trustee.
(b) Unless otherwise determined by the Administrative Trustees,
and except as otherwise required by the Business Trust Act or applicable
law, any Administrative Trustee is authorized to execute on behalf of the
Trust any documents which the Administrative Trustees have the power and
authority to cause the Trust to execute pursuant to Section 3.6,
provided, that, the registration statement referred to in Section
3.6(b)(i), including any amendments thereto, shall be signed by all of the
Administrative Trustees; and
(c) An Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of
21 his or her power for the purposes of signing any documents which the
Administrative Trustees have power and authority to cause the Trust to
execute pursuant to Section 3.6.
SECTION 5.6. [INTENTIONALLY OMITTED]
SECTION 5.7. Appointment, Removal and Resignation of Trustees.
________________________________________________
(a) Subject to Section 5.7(b) of this Declaration and to Section
6(b) of Annex I hereto, Trustees may be appointed or removed without cause
at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor;
(ii) unless an Event of Default shall have occurred and
be continuing after the issuance of any Securities, by vote of the
Holders of a Majority in liquidation amount of the Common Securities
voting as a class at a meeting of the Holders of the Common
Securities; and
(iii) if an Event of Default shall have occurred and be
continuing after the issuance of the Securities, with respect to the
Property Trustee or the Delaware Trustee, by vote of Holders of a
Majority in liquidation amount of the Capital Securities voting as a
class at a meeting of Holders of the Capital Securities.
(b) (i) The Trustee that acts as Property Trustee shall not
be removed in accordance with Section 5.7(a) until a Successor
Property Trustee has been appointed and has accepted such appointment
by written instrument executed by such Successor Property Trustee and
delivered to the Administrative Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not
be removed in accordance with this Section 5.7(b) until a successor
Trustee possessing the qualifications to act as Delaware Trustee
under Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
Administrative 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 such
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
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Property Trustee and delivered to
the Trust, the Sponsor and the resigning Property Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment by
instrument executed by such Successor Delaware Trustee and delivered
to the Trust, the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Property Trustee, as the case may be, if the Property Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with
this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this
Section 5.7 within 60 days after delivery of an instrument of resignation
or removal, the Property Trustee or Delaware Trustee resigning or being
removed, as applicable, may petition any court of competent jurisdiction
for appointment of a Successor Property Trustee or Successor Delaware
Trustee. Such court may thereupon, after prescribing such notice, if any,
as it may deem proper and prescribe, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.8. Vacancies Among Trustees.
________________________
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees
is increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or,
if there are more than two, a majority of the Administrative Trustees shall
be conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9. Effect of Vacancies.
___________________
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee
shall not operate to dissolve, terminate or annul the Trust. Whenever a
vacancy in the number of Administrative Trustees shall occur, until such
vacancy is filled by the appointment of an Administrative Trustee in
accordance with Section 5.7, the Administrative Trustees in office,
regardless of their number, shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Declaration.
SECTION 5.10. Meetings.
________
If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may
be held at a time and place fixed by resolution of the Administrative
Trustees. Notice of any in-person meetings of the Administrative Trustees
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 48 hours
before such meeting. Notice of any telephonic meetings of the Administrative
Trustees or any committee thereof shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 24 hours before a meeting. Notices shall contain a
brief statement of the time, place and anticipated purposes of the meeting.
The presence (whether in person or by telephone) of an Administrative Trustee
at a meeting shall constitute a waiver of notice of such meeting except where
an Administrative Trustee attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the meeting
has not been lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Administrative Trustees may be taken at a
meeting by vote of a majority of the Administrative Trustees present (whether
in person or by telephone) and eligible to vote with respect to such matter,
provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Administrative Trustees. In the event there is only
one Administrative Trustee, any and all action of such Administrative Trustee
shall be evidenced by a written consent of such Administrative Trustee.
SECTION 5.11. Delegation of Power.
___________________
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over
the age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or
amendment thereto filed with the Commission, or making any other
governmental filing; and
(b) the Administrative Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the doing
of such things and the execution of such instruments either in the name of
the Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation
is not prohibited by applicable law or contrary to the provisions of the
Trust, as set forth herein.
SECTION 5.12. Merger, Conversion, Consolidation or Succession to Business.
___________________________________________________________
Any Person into which the Property Trustee or the Delaware Trustee or any
Administrative Trustee that is not a natural person, as the case may be, may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Property
Trustee or the Delaware Trustee or any Administrative Trustee that is not a
natural person, as the case may be, shall be a party, or any Person succeeding
to all or substantially all the corporate trust business of the Property
Trustee or the Delaware Trustee or any Administrative Trustee that is not a
natural person, as the case may be, shall be the successor of the Property
Trustee or the Delaware Trustee or any Administrative Trustee that is not a
natural person, 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.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1. Distributions.
_____________
Holders shall receive Distributions in accordance with the applicable
terms of Annex I and the relevant Holder's Securities. 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 (as defined in
the Indenture)), premium and/or principal on the Debentures held by the
Property Trustee or Liquidated Damages (as defined in the Registration Rights
Agreement) or any other payments pursuant to the Registration Rights Agreement
with respect to the Debentures held by the Property Trustee (the amount of any
such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities.
_______________________________________
(a) The Administrative Trustees shall on behalf of the Trust issue
one class of capital securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Annex I
(the "Series A Capital Securities") and one class of common securities
representing undivided beneficial interests in the assets of the Trust
having such terms as are set forth in Annex I (the "Common Securities").
The Administrative Trustees shall on behalf of the Trust issue one class
of capital securities representing undivided beneficial interests in the
Trust having such terms as set forth in Annex I (the "Series B Capital
Securities") in exchange for Series A Capital Securities accepted for
exchange in the Exchange Offer, which Series B Capital Securities shall
not bear the legends required by Section 9.2(h) unless the Holder of such
Series A Capital Securities is either (A) a broker-dealer who purchased
such Series A Capital Securities directly from the Trust for resale
pursuant to Rule 144A or any other available exemption under the Securities
Act, (B) a Person participating in the distribution of the Series A Capital
Securities or (C) a Person who is an affiliate (as defined in Rule 144A) of
the Trust. The Trust shall issue no securities or other interests in the
assets of the Trust other than the Securities.
(b) The consideration received by the Trust for the issuance of
the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable undivided beneficial interests in the assets
of the Trust.
(d) Every Person, by virtue of having become a Holder or a Capital
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and
shall be bound by, this Declaration.
SECTION 7.2. Execution and Authentication.
____________________________
(a) The Securities shall be signed on behalf of the Trust by an
Administrative Trustee. In case any Administrative Trustee of the Trust
who shall have signed any of the Securities shall cease to be such
Administrative Trustee before the Securities so signed shall be delivered
by the Trust, such Securities nevertheless may be delivered as though the
person who signed such Securities had not ceased to be such Administrative
Trustee; and any Securities may be signed on behalf of the Trust by such
persons who, at the actual date of execution of such Security, shall be
the Administrative Trustees of the Trust, although at the date of the
execution and delivery of the Declaration any such person was not such an
Administrative Trustee.
(b) One Administrative Trustee shall sign the Capital Securities
for the Trust by manual or facsimile signature. Unless otherwise determined
by the Trust, such signature shall, in the case of Common Securities, be a
manual signature.
A Capital Security shall not be valid until authenticated by the manual
signature of an authorized officer of the Property Trustee. The signature shall
be conclusive evidence that the Capital Security has been authenticated under
this Declaration.
Upon a written order of the Trust signed by one Administrative Trustee,
the Property Trustee shall authenticate the Capital Securities for original
issue. The aggregate number of Capital Securities outstanding at any time
shall not exceed the number set forth in the terms in Annex I hereto except as
provided in Section 7.6.
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Capital Securities. An authenticating agent may
authenticate Capital Securities whenever the Property Trustee may do so.
Each reference in this Declaration to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee to deal with the Sponsor or an Affiliate.
SECTION 7.3. Form and Dating.
_______________
The Capital Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the
Common Securities shall be substantially in the form of Exhibit A-2, each of
which is hereby incorporated in and expressly made a part of this Declaration.
Certificates representing the Securities may be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable
to the Administrative Trustees, as evidenced by their execution thereof. The
Securities may have letters, CUSIP or other numbers, notations or other marks
of identification or designation and such legends or endorsements required by
law, stock exchange rule, agreements to which the Trust is subject, if any,
or usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Trust). The Trust at the direction of the Sponsor shall
furnish any such legend not contained in Exhibit A-1 to the Property Trustee
in writing. Each Capital Security shall be dated the date of its
authentication. The terms and provisions of the Securities set forth in
Annex I and the forms of Securities set forth in Exhibits A-1 and A-2 are part
of the terms of this Declaration and to the extent applicable, the Property
Trustee and the Sponsor, by their execution and delivery of this Declaration,
expressly agree to such terms and provisions and to be bound thereby.
(a) Global Securities. Securities offered and sold to QIBs in
_________________
reliance on Rule 144A shall be issued in the form of one or more,
permanent global Securities in definitive, fully registered form without
distribution coupons with the global legend and applicable Restricted
Securities Legend set forth in Exhibit A-1 hereto ( each a "Global Capital
Security" and collectively, the "Global Capital Securities"), which shall
be deposited on behalf of the purchasers of the Capital Securities
represented thereby with the Clearing Agency or with the Property Trustee,
at its New York office, as custodian for the Clearing Agency, and
registered in the name of the Clearing Agency or a nominee of the Clearing
Agency, duly executed by the Trust and authenticated by the Property
Trustee as hereinafter provided. The number of Capital Securities
represented by the Global Capital Securities may from time to time be
increased or decreased by adjustments made on the records of the Property
Trustee and the Clearing Agency or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall apply only
_____________________
to the Global Capital Securities, and such other Capital Securities in
global form as may be authorized by the Trust to be deposited with or on
behalf of the Clearing Agency.
The Trust shall execute and the Property Trustee shall, in accordance
with this Section 7.3, authenticate and make available for delivery
initially one or more Global Capital Securities that (i) shall be
registered in the name of Cede & Co. or other nominee of such Clearing
Agency and (ii) shall be delivered by the Trustee to such Clearing Agency
or pursuant to such Clearing Agency's written instructions or held by the
Property Trustee as custodian for the Clearing Agency.
Members of, or participants in, the Clearing Agency ("Participants")
shall have no rights under this Declaration with respect to any Global
Capital Security held on their behalf by the Clearing Agency or by the
Property Trustee as the custodian of the Clearing Agency or under such
Global Capital Security , and the Clearing Agency may be treated by the
Trust, the Property Trustee and any agent of the Trust or the Property
Trustee as the absolute owner of such Global Capital Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Trust, the Property Trustee or any agent or employee of the
Trust or the Property Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Clearing
Agency or impair, as between the Clearing Agency and its Participants,
the operation of customary practices of such Clearing Agency governing the
exercise of the rights of a holder of a beneficial interest in any Global
Capital Security.
(c) Definitive Capital Securities. Except as provided in Section
_____________________________
7.9, owners of beneficial interests in a Global Capital Security will not
be entitled to receive physical delivery of certificated Capital Securities
("Definitive Capital Securities"). Purchasers of Securities who are
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act) will receive Capital Securities in the form of
individual certificates in definitive, fully registered form without
distribution coupons and with the applicable Restricted Securities Legend
set forth in Exhibit A-1 hereto ("Restricted Definitive Capital
Securities"); provided, however, that upon transfer of such Restricted
Definitive Capital Securities to a QIB, such Restricted Definitive Capital
Securities will, unless the Global Capital Security has previously been
exchanged, be exchanged for an interest in a Global Capital Security
pursuant to the provisions of Section 9.2. Restricted Definitive Capital
Securities will bear the applicable Restricted Securities Legend set forth
on Exhibit A-1 unless removed in accordance with Section 9.2.
(d) Authorized Denominations. The Capital Securities are issuable
________________________
only in denominations of $1,000 and any integral multiple thereof.
SECTION 7.4. Registrar, Paying Agent and Exchange Agent.
__________________________________________
The Trust shall maintain in the Borough of Manhattan, The City of New
York (i) an office or agency where Capital Securities may be presented for
registration of transfer ("Registrar"), (ii) an office or agency where Capital
Securities may be presented for payment ("Paying Agent") and (iii) an office
or agency where Securities may be presented for exchange ("Exchange Agent").
The Registrar shall keep a register of the Capital Securities and of their
transfer. The Trust may appoint the Registrar, the Paying Agent and the
Exchange Agent and may appoint one or more co-registrars, one or more
additional paying agents and one or more additional exchange agents in such
other locations as it shall determine which paying agent and/or exchange agent
must be acceptable to the Administrative Trustees and the Company. The term
"Registrar" includes any additional registrar, "Paying Agent" includes any
additional paying agent and the term "Exchange Agent" includes any additional
exchange agent. The Trust may change any Paying Agent, Registrar, or Exchange
Agent without prior notice to any Holder. The Paying Agent shall be permitted
to resign as Paying Agent upon 30 days' written notice to the Administrative
Trustees. The Trust shall notify the Property Trustee of the name and address
of any Agent not a party to this Declaration. If the Trust fails to appoint or
maintain another entity as Registrar, Paying Agent or Exchange Agent, the
Property Trustee shall act as such. The Trust or any of its Affiliates may
act as Paying Agent, Registrar, or Exchange Agent. The Trust shall act as
Paying Agent, Registrar and Exchange Agent for the Common Securities.
The Trust initially appoints the Property Trustee as Registrar, Paying
Agent, and Exchange Agent for the Capital Securities. In the event that the
Property Trustee shall no longer be the Registrar, Paying Agent, or Exchange
Agent the Trust shall appoint a successor which successor shall be acceptable
to the Administrative Trustees and the Company.
SECTION 7.5. Paying Agent to Hold Money in Trust.
___________________________________
The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of liquidation amounts or Distributions on the Securities,
and will notify the Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues, the Property Trustee may
require a Paying Agent to pay all money held by it to the Property Trustee.
The Trust at any time may require a Paying Agent to pay all money held by it
to the Property Trustee and to account for any money disbursed by it. Upon
payment over to the Property Trustee, the Paying Agent (if other than the
Trust or an Affiliate of the Trust) shall have no further liability for the
money. If the Trust or the Sponsor or an Affiliate of the Trust or the Sponsor
acts as Paying Agent, it shall segregate and hold in a separate trust fund for
the benefit of the Holders all money held by it as Paying Agent.
SECTION 7.6. Replacement Securities.
______________________
If a Holder claims that a Security owned by it has been lost, destroyed
or wrongfully taken or if such Security is mutilated and is surrendered to the
Trust or in the case of the Capital Securities to the Property Trustee, the
Trust shall issue and the Property Trustee shall authenticate a replacement
Security if the Property Trustee's and the Trust's requirements, as the case
may be, are met. An indemnity bond must be provided by the Holder which, in
the judgment of the Property Trustee, is sufficient to protect the Trustees,
the Sponsor or any authenticating agent from any loss which any of them may
suffer if a Security is replaced. The Trust may charge such Holder for its
expenses in replacing a Security.
SECTION 7.7. Outstanding Capital Securities.
______________________________
The Capital Securities outstanding at any time are all the Capital
Securities authenticated by the Property Trustee except for those cancelled
by it, those delivered to it for cancellation, and those described in this
Section as not outstanding.
If a Capital Security is replaced, pursuant to Section 7.6 hereof, it
ceases to be outstanding unless the Property Trustee receives proof
satisfactory to it that the replaced Capital Security is held by a bona fide
purchaser.
If Capital Securities are considered paid in accordance with the terms
of this Declaration, they cease to be outstanding and Distributions on them
shall cease to accumulate.
A Capital Security does not cease to be outstanding because one of the
Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.
SECTION 7.8. Capital Securities in Treasury.
______________________________
In determining whether the Holders of the required amount of Securities
have concurred in any direction, waiver or consent, Capital Securities owned
by the Trust, the Sponsor or an Affiliate of the Sponsor, as the case may be,
shall be disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Property Trustee shall be fully protected
in relying on any such direction, waiver or consent, only Securities which a
Responsible Officer of the Property Trustee actually knows are so owned shall
be so disregarded.
SECTION 7.9. Temporary Securities.
____________________
(a) Until definitive Securities are ready for delivery, the Trust
may prepare and, in the case of the Capital Securities, the Property
Trustee shall authenticate temporary Securities. Temporary Securities
shall be substantially in the form of definitive Securities but may have
variations that the Trust considers appropriate for temporary Securities.
Without unreasonable delay, the Trust shall prepare and, in the case of
the Capital Securities, the Property Trustee shall authenticate
definitive Securities in exchange for temporary Securities.
(b) A Global Capital Security deposited with the Clearing Agency
or with the Property Trustee as custodian for the Clearing Agency pursuant
to Section 7.3 shall be transferred to the beneficial owners thereof in
the form of Definitive Capital Securities only if such transfer complies
with Section 9.2 and (i) the Clearing Agency notifies the Company that it
is unwilling or unable to continue as Clearing Agency for such Global
Capital Security or if at any time such Clearing Agency ceases to be a
"clearing agency" registered under the Exchange Act and a clearing agency
is not appointed by the Sponsor within 90 days of such notice, (ii) a
Default or an Event of Default has occurred and is continuing or (iii) the
Trust at its sole discretion elects to cause the issuance of definitive
certificated Capital Securities.
(c) Any Global Capital Security that is transferable to the
beneficial owners thereof in the form of Definitive Capital Securities
pursuant to this Section 7.9 shall be surrendered by the Clearing Agency
to the Property Trustee located in the Borough of Manhattan, The City of
New York to be so transferred, in whole or from time to time in part,
without charge, and the Property Trustee shall authenticate and make
available for delivery, upon such transfer of each portion of such Global
Capital Security, an equal aggregate liquidation amount of Securities of
authorized denominations in the form of Definitive Capital Securities.
Any portion of a Global Capital Security transferred pursuant to this
Section shall be registered in such names as the Clearing Agency shall
direct. Any Capital Security in the form of Definitive Capital
Securities delivered in exchange for an interest in the Restricted
Capital Security in global form shall, except as otherwise provided by
Sections 7.3 and 9.2, bear the applicable Restricted Securities Legend
set forth in Exhibit A-1 hereto.
(d) Subject to the provisions of Section 7.9(c), the Holder of a
Global Capital Security may grant proxies and otherwise authorize any
Person, including Participants and Persons that may hold interests through
Participants, to take any action which such Holder is entitled to take
under this Declaration or the Securities.
(e) In the event of the occurrence of any of the events specified
in Section 7.9(b), the Trust will promptly make available to the Property
Trustee a reasonable supply of certificated Capital Securities in fully
registered form without distribution coupons.
SECTION 7.10. Cancellation.
____________
The Trust at any time may deliver Capital Securities to the Property
Trustee for cancellation. The Registrar, Paying Agent and Exchange Agent
shall forward to the Property Trustee any Capital Securities surrendered to
them for registration of transfer, redemption, exchange or payment. The
Property Trustee shall promptly cancel all Capital Securities, surrendered
for registration of transfer, redemption, exchange, payment, replacement or
cancellation and shall dispose of cancelled Capital Securities as the Trust
directs, provided that the Property Trustee shall not be obligated to destroy
Capital Securities. The Trust may not issue new Capital Securities to replace
Capital Securities that it has paid or that have been delivered to the
Property Trustee for cancellation or that any Holder has exchanged.
SECTION 7.11. CUSIP Numbers.
_____________
The Trust in issuing the Capital Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders of Capital
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Capital
Securities or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on the Capital
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property
Trustee of any change in the CUSIP numbers.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1. Termination of Trust.
____________________
(a) The Trust shall automatically terminate:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or
liquidation or its equivalent with respect to the Sponsor; or the
revocation of the Sponsor's charter and the expiration of 90 days
after the date of revocation without a reinstatement thereof;
(iii) following the distribution of a Like Amount of the
Debentures to all of the Holders, provided that, the Property Trustee
has received written notice from the Holder of Common Securities
directing the Property Trustee to terminate the Trust (which
direction is optional, and except as otherwise expressly provided
below, within the discretion of the Holder of Common Securities) and
provided, further, that such direction and such distribution is
conditioned on the Administrative Trustees' receipt of an opinion of
an independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published rulings of
the Internal Revenue Service, to the effect that the Holders will not
recognize any gain or loss for United States federal income tax
purposes as a result of the dissolution of the Trust and the
distribution of Debentures;
(iv) upon the entry of a decree of judicial dissolution of
the Trust by a court of competent jurisdiction;
(v) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall
have been paid to the Holders in accordance with the terms of the
Securities;
(vi) upon the repayment of the Debentures or at such time
as no Debentures are outstanding; or
(vii) the expiration of the term of the Trust provided in
Section 3.14.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Administrative Trustees shall file a
certificate of cancellation with the Secretary of State of the State of
Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1. Transfer of Securities.
______________________
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and
in the terms of the Securities. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and
void. Any such transferee shall be deemed not to be the holder of such
Securities for any purpose, including but not limited to, the receipt of
Distributions on such Securities, and such transferee shall be deemed to
have no interest whatsoever in such Securities.
(b) Subject to this Article IX, Capital Securities may only be
transferred, in whole or in part, in accordance with the terms and
conditions set forth in this Declaration. Any transfer or purported
transfer of any security not made in accordance with this Declaration
shall be null and void.
(c) The Sponsor may not transfer the Common Securities.
(d) The Administrative Trustees shall provide for the
registration of Capital Securities and of the transfer of Capital
Securities, which will be effected without charge but only upon payment
(with such indemnity as the Administrative Trustees may require) in
respect of any tax or other governmental charges that may be imposed in
relation to it. Upon surrender for registration of transfer of any Capital
Securities, the Administrative Trustees shall cause one or more new Capital
Securities to be issued in the name of the designated transferee or
transferees. Every Capital Security surrendered for registration of
transfer shall be accompanied by a written instrument of transfer in
form satisfactory to the Administrative Trustees and the Registrar duly
executed by the Holder or such Holder's attorney duly authorized in
writing. Each Capital Security surrendered for registration of transfer
shall be canceled by the Property Trustee. A transferee of a Capital
Security shall be entitled to the rights and subject to the obligations of
a Holder hereunder upon the receipt by such transferee of a Capital
Security. By acceptance of a Capital Security, each transferee shall be
deemed to have agreed to be bound by this Declaration.
SECTION 9.2. Transfer Procedures and Restrictions
____________________________________
(a) General. Except as otherwise provided in Section 9.2(b), if
Capital Securities are issued upon the transfer, exchange or replacement of
Capital Securities bearing the Restricted Securities Legend set forth in
Exhibit A-1 hereto, or if a request is made to remove such Restricted
Securities Legend on Capital Securities, the Capital Securities so issued
shall bear the Restricted Securities Legend, or the Restricted Securities
Legend shall not be removed, as the case may be, unless there is delivered
to the Trust and the Property Trustee such evidence satisfactory to the
Sponsor, which shall include an Opinion of Counsel, as may be reasonably
required by the Sponsor, that neither the legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof
are made pursuant to an exception from the registration requirements of
the Securities Act or, with respect to Restricted Definitive Capital
Securities, that such Securities are not "restricted" within the meaning
of Rule 144. Upon provision of such satisfactory evidence, the Property
Trustee, at the written direction of the Trust, shall authenticate and
deliver Capital Securities that do not bear the legend.
(b) Transfers After Effectiveness of a Registration Statement.
After the effectiveness of a Registration Statement with respect to any
Capital Securities, all requirements pertaining to legends on such Capital
Securities will cease to apply, and beneficial interests in a Capital
Security in global form without legends will be available to transferees of
such Capital Securities, upon exchange of the transferring holder's
Restricted Definitive Capital Security or directions to transfer such
Holder's beneficial interest in the Global Capital Security, as the case
may be. No such transfer or exchange of a Restricted Definitive Capital
Security or of an interest in the Global Capital Security shall be
effective unless the transferor delivers to the Trust a certificate in a
form substantially similar to that attached hereto as the "Form of
Assignment" in Exhibit A-1. Except as otherwise provided in Section
9.2(l), after the effectiveness of a Registration Statement, the Trust
shall issue and the Property Trustee, upon a written order of the Trust
signed by one Administrative Trustee, shall authenticate a Capital
Security in global form without the Restricted Securities Legend (the
"Unrestricted Global Capital Security") for deposit with the Clearing
Agency or its custodian to evidence transfers of beneficial interests from
the (i) Global Capital Security and (ii) Restricted Definitive Capital
Securities.
(c) Transfer and Exchange of Definitive Capital Securities. When
Definitive Capital Securities are presented to the Registrar
(x) to register the transfer of such Definitive Capital
Securities; or
(y) to exchange such Definitive Capital Securities for an
equal number of Definitive Capital Securities, the Registrar or co-
registrar shall register the transfer or make the exchange as
requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Capital Securities surrendered
for transfer or exchange:
(i) shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably
satisfactory to the Administrative Trustees and the Registrar
or co-registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing; and
(ii) in the case of Definitive Capital Securities
that are Restricted Definitive Capital Securities:
(A) if such Restricted Capital Securities
are being delivered to the Registrar by a Holder for
registration in the name of such Holder, without
transfer, a certification from such Holder to that
effect; or
(B) if such Restricted Capital Securities are
being transferred: (i) a certification from the
transferor in a form substantially similar to that
attached hereto as the "Form of Assignment" in
Exhibit A-1, and (ii) if the Trust so requests,
evidence reasonably satisfactory to it as to the
compliance with the restrictions set forth in the
Restricted Securities Legend.
(d) Restrictions on Transfer of a Definitive Capital Security for
a Beneficial Interest in a Global Capital Security. A Definitive Capital
Security may not be exchanged for a beneficial interest in a Global Capital
Security except upon satisfaction of the requirements set forth below.
Upon receipt by the Property Trustee of a Definitive Capital Security,
duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Property Trustee and Administrative Trustees,
together with:
(i) if such Definitive Capital Security is a Restricted
Capital Security, certification (in a form substantially similar to
that attached hereto as the "Form of Assignment" in Exhibit A-1); and
(ii) whether or not such Definitive Capital Security is a
Restricted Capital Security, written instructions directing the
Property Trustee to make, or to direct the Clearing Agency to make,
an adjustment on its books and records with respect to the appropriate
Global Capital Security to reflect an increase in the number of the
Capital Securities represented by such Global Capital Security, then
the Property Trustee shall cancel such Definitive Capital Security and
cause, or direct the Clearing Agency to cause, the aggregate number of
Capital Securities represented by the appropriate Global Capital
Security to be increased accordingly. If no Global Capital Securities
are then outstanding, the Trust shall issue and the Property Trustee
shall authenticate, upon written order of any Administrative Trustee,
an appropriate number of Capital Securities in global form.
(e) Transfer and Exchange of Global Capital Securities. Subject
to Section 9.2(f), the transfer and exchange of Global Capital Securities
or beneficial interests therein shall be effected through the Clearing
Agency, in accordance with this Declaration (including applicable
restrictions on transfer set forth herein, if any) and the procedures of
the Clearing Agency therefore.
(f) Transfer of a Beneficial Interest in a Global Capital Security
for a Definitive Capital Security.
(i) Any Person having a beneficial interest in a Global
Capital Security may upon request, but only upon 20 days' prior notice
to the Property Trustee, and if accompanied by the information
specified below, exchange such beneficial interest for a Definitive
Capital Security representing the same number of Capital Securities.
Upon receipt by the Property Trustee from the Clearing Agency or its
nominee on behalf of any Person having a beneficial interest in a
Global Capital Security of written instructions or such other form of
instructions as is customary for the Clearing Agency or the Person
designated by the Clearing Agency as having such a beneficial interest
in a Restricted Capital Security and a certification from the
transferor (in a form substantially similar to that attached hereto
as the "Form of Assignment" in Exhibit A-1), which may be submitted
by facsimile, then the Property Trustee will cause the aggregate
number of Capital Securities represented by Global Capital Securities
to be reduced on its books and records and, following such reduction,
the Trust will execute and the Property Trustee will authenticate and
make available for delivery to the transferee a Definitive Capital
Security.
(ii) Definitive Capital Securities issued in exchange for
a beneficial interest in a Global Capital Security pursuant to this
Section 9.2(f) shall be registered in such names and in such
authorized denominations as the Clearing Agency, pursuant to
instructions from its Participants or indirect participants or
otherwise, shall instruct the Property Trustee in writing. The
Property Trustee shall deliver such Capital Securities to the persons
in whose names such Capital Securities are so registered in accordance
with such instructions of the Clearing Agency.
(g) Restrictions on Transfer and Exchange of Global Capital
Securities. Notwithstanding any other provisions of this Declaration
(other than the provisions set forth in subsection (b) of Section 7.9),
a Global Capital Security may not be transferred as a whole except by the
Clearing Agency to a nominee of the Clearing Agency or another nominee of
the Clearing Agency or by the Clearing Agency or any such nominee to a
successor Clearing Agency or a nominee of such successor Clearing Agency.
(h) Legend.
(i) Except as permitted by the following paragraph (ii),
each Capital Security certificate evidencing the Global Capital
Securities and the Definitive Capital Securities (and all Capital
Securities issued in exchange therefor or substitution thereof) shall
bear a legend (the "Restricted Securities Legend") in substantially
the following form, as applicable:
THIS CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
ANY STATE SECURITIES LAW OR ANY OTHER APPLICABLE SECURITIES
LAW. NEITHER THIS CAPITAL SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION
IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL
SECURITY PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF
THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON
WHICH EQUITABLE OF IOWA COMPANIES (THE "COMPANY") OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS CAPITAL
SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY) ONLY
(A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) SO LONG AS THIS CAPITAL SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"),
TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUB
PARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR
ITS OWN ACCOUNT; OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT
TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR (E) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (ii)
PURSUANT TO CLAUSE (D), TO REQUIRE THAT THE TRANSFEROR DELIVER
TO THE TRUST A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE
FORM OF ANNEX A TO THE OFFERING MEMORANDUM DATED MARCH 31,
1997. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF
ALSO AGREES, REPRESENTS AND WARRANTS THAT EITHER (i) IT IS NOT
AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE "PROHIBITED
TRANSACTIONS" PROVISIONS OF SECTION 406 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")
OR SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS
AMENDED ("THE CODE") AND IS NOT USING THE ASSETS OF ANY SUCH
PLAN TO ACQUIRE THIS CAPITAL SECURITY OR (ii) THE ACQUISITION
AND HOLDING OF THIS CAPITAL SECURITY BY IT IS NOT PROHIBITED
BY EITHER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE,
OR IS EXEMPT FROM ANY SUCH PROHIBITION BY APPLICATION OF A
STATUTORY, REGULATORY OR ADMINISTRATIVE EXEMPTION.
(ii) Upon any sale or transfer of a Restricted Capital
Security (including any Restricted Capital Security represented by a
Global Capital Security) pursuant to an effective registration
statement under the Securities Act or pursuant to Rule 144 under the
Securities Act after such registration statement ceases to be
effective:
(A) in the case of any Restricted Capital Security
that is a Definitive Capital Security, the Registrar shall
permit the Holder thereof to exchange such Restricted Capital
Security for a Definitive Capital Security that does not bear
the Restricted Securities Legend and rescind any restriction
on the transfer of such Restricted Capital Security; and
(B) in the case of any Restricted Capital
Security that is represented by a Global Capital Security,
the Registrar shall permit the Holder of such Global Capital
Security to exchange such Global Capital Security for another
Global Capital Security that does not bear the Restricted
Securities Legend.
(i) Cancellation or Adjustment of Global Capital Security. At
such time as all beneficial interests in a Global Capital Security have
either been exchanged for Definitive Capital Securities to the extent
permitted by this Declaration or redeemed, repurchased or canceled in
accordance with the terms of this Declaration, such Global Capital Security
shall be returned to the Property Trustee for cancellation or retained and
canceled by the Property Trustee. At any time prior to such cancellation,
if any beneficial interest in a Global Capital Security is exchanged for
Definitive Capital Securities, Capital Securities represented by such
Global Capital Security shall be reduced and an adjustment shall be made
on the books and records of the Property Trustee (if it is then the
custodian for such Global Capital Security) with respect to such Global
Capital Security, by the Property Trustee or any securities custodian, to
reflect such reduction.
(j) Obligations with Respect to Transfers and Exchanges of Capital
Securities.
(i) To permit registrations of transfers and exchanges,
the Trust shall execute and the Property Trustee shall authenticate
Definitive Capital Securities and Global Capital Securities at the
Registrar's request in accordance with the terms of this Declaration.
(ii) Registrations of transfers or exchanges will be
effected without charge, but only upon payment (with such indemnity
as the Trust or the Sponsor may require) in respect of any tax or
other governmental charge that may be imposed in relation to it.
(iii) The Registrar or co-registrar shall not be required
to register the transfer of or exchange of (a) Capital Securities
during a period beginning at the opening of business 15 days before
the day of mailing of a notice of redemption and ending at the close
of business on the day of such mailing; or (b) any Capital Security
so selected for redemption.
(iv) Prior to the due presentation for registrations of
transfer of any Capital Security, the Trust, the Property Trustee,
the Paying Agent, the Registrar or any co-registrar may deem and
treat the person in whose name a Capital Security is registered as
the absolute owner of such Capital Security for the purpose of
receiving Distributions on such Capital Security (subject to
Section 2(c) of Annex I) and for all other purposes whatsoever, and
none of the Trust, the Property Trustee, the Paying Agent, the
Registrar or any co-registrar shall be affected by notice to the
contrary.
(v) All Capital Securities issued upon any transfer or
exchange pursuant to the terms of this Declaration shall evidence the
same security and shall be entitled to the same benefits under this
Declaration as the Capital Securities surrendered upon such transfer
or exchange.
(k) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Capital Security, a
Participant in the Clearing Agency or other Person with respect to
the accuracy of the records of the Clearing Agency or its nominee or
of any Participant thereof, with respect to any ownership interest in
the Capital Securities or with respect to the delivery to any
Participant, beneficial owner or other Person (other than the Clearing
Agency) of any notice (including any notice of redemption) or the
payment of any amount, under or with respect to such Capital
Securities. All notices and communications to be given to the Holders
and all payments to be made to Holders under the Capital Securities
shall be given or made only to or upon the order of the registered
Holders (which shall be the Clearing Agency or its nominee in the
case of a Global Capital Security). The rights of beneficial owners
in any Global Capital Security shall be exercised only through the
Clearing Agency subject to the applicable rules and procedures of the
Clearing Agency. The Property Trustee may conclusively rely and
shall be fully protected in relying upon information furnished by the
Clearing Agency or any agent thereof with respect to its Participants
and any beneficial owners.
(ii) The Property Trustee and Registrar shall have no
obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Declaration or
under applicable law with respect to any transfer of any interest in
any Capital Security (including any transfers between or among
Clearing Agency Participants or beneficial owners in any Global
Capital Security) other than to require delivery of such certificates
and other documentation or evidence as are expressly required by, and
to do so if and when expressly required by, the terms of this
Declaration, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
(l) Exchange of Series A Capital Securities for Series B Capital
Securities. The Series A Capital Securities may, at the
option of the Company, be exchanged for Series B Capital
Securities pursuant to the terms of the Exchange Offer. The
Trustee shall make the exchange as follows:
The Sponsor shall present the Property Trustee with an Officers'
Certificate certifying the following:
(A) upon issuance of the Series B Capital Securities, the
transactions contemplated by the Exchange Offer have been consummated;
and
(B) the number of Series A Capital Securities properly
tendered in the Exchange Offer that are represented by a Global
Capital Security and the number of Series A Capital Securities
properly tendered in the Exchange Offer that are represented by
Definitive Capital Securities, the name of each Holder of such
Definitive Capital Securities, the liquidation amount of Capital
Securities properly tendered in the Exchange Offer by each such
Holder and the name and address to which Definitive Capital Securities
for Series B Capital Securities shall be registered and sent for each
such Holder.
The Property Trustee, upon receipt of (i) such Officers' Certificate,
(ii) an Opinion of Counsel (x) to the effect that the Series B Capital
Securities have been registered under Section 5 of the Securities Act and
the Indenture has been qualified under the Trust Indenture Act and (y) with
respect to the matters set forth in Section 3(o) of the Registration Rights
Agreement and (iii) an order of the Trust as set forth in Section 7.2,
shall authenticate (A) a Global Capital Security for Series B Capital
Securities in aggregate liquidation amount equal to the aggregate
liquidation amount of Series A Capital Securities represented by a Global
Capital Security indicated in such Officers' Certificate as having been
properly tendered and (B) Definitive Capital Securities representing
Series B Capital Securities registered in the names of, and in the
liquidation amounts indicated in such Officers' Certificate.
If, upon consummation of the Exchange Offer, less than all the
outstanding Series A Capital Securities shall have been properly tendered
and not withdrawn, the Property Trustee shall make an endorsement on the
Global Capital Security for Series A Capital Securities indicating the
reduction in the number and aggregate liquidation amount represented
thereby as a result of the Exchange Offer.
The Trust shall deliver such Definitive Capital Securities for
Series B Capital Securities to the Holders thereof as indicated in such
Officers' Certificate.
(m) Minimum Transfers. Series A Capital Securities may only be
transferred in minimum blocks of $100,000 aggregate liquidation amount
until such Series A Capital Securities or Series B Capital Securities
issued in exchange therefor are registered pursuant to an effective
registration statement filed under the Securities Act.
SECTION 9.3. Book Entry Interests.
____________________
Global Capital Securities shall initially be registered on the books and
records of the Trust in the name of Cede & Co., the nominee of the Clearing
Agency, and no Capital Security Beneficial Owner will receive a Definitive
Capital Security certificate representing such Capital Security Beneficial
Owner's interests in such Global Capital Securities, except as provided in
Section 9.2 and Section 7.9. Unless and until definitive, fully registered
Capital Securities certificates have been issued to the Capital Security
Beneficial Owners pursuant to Section 9.2 or Section 7.9:
(a) the provisions of this Section 9.3 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 Capital Securities and receiving
approvals, votes or consents hereunder) as the Holder of the Capital
Securities and the sole holder of the Global Certificates and shall have
no obligation to the Capital Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.3 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.3 shall control; and
(d) the rights of the Capital Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Capital Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants and
the Clearing Agency shall receive and transmit payments of Distributions on
the Global Certificates to such Clearing Agency Participants. The Clearing
Agency will make book entry transfers among the Clearing Agency
Participants. Provided, that solely for the purposes of determining
whether the Holders of the requisite amount of Capital Securities have
voted on any matter provided for in this Declaration, so long as Definitive
Capital Security certificates have not been issued, the Trustees may
conclusively rely on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the Clearing
Agency setting forth the Capital Security Beneficial Owners' votes or
assigning the right to vote on any matter to any other Persons either in
whole or in part.
SECTION 9.4. Notices to Clearing Agency.
__________________________
Whenever a notice or other communication to the Capital Security Holders
is required under this Declaration, the Trustees shall give all such notices
and communications specified herein to be given to the Holders of Global
Capital Securities to the Clearing Agency, and shall have no notice obligations
to the Capital Security Beneficial Owners.
SECTION 9.5. Appointment of Successor Clearing Agency.
________________________________________
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Capital Securities, the Administrative Trustees
may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Capital Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1. Liability.
_________
(a) Except as expressly set forth in this 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;
and
(ii) be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution or termination of the Trust
or otherwise.
(b) The Sponsor shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to
the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Capital Securities shall be entitled to the same limitation
of personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware.
SECTION 10.2. Exculpation.
___________
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person
for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of the authority conferred on such Indemnified
Person by this Declaration or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's gross negligence or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as
to matters the Indemnified Person reasonably believes are within such
other Person's professional or expert competence and, if selected by such
Indemnified Person, has been selected by such Indemnified Person with
reasonable care 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
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified
Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take
such action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating
to such interests, any customary or accepted industry practices, and any
applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or
term so made, taken or provided by the Indemnified Person shall not
constitute a breach of this Declaration or any other agreement contemplated
herein or of any duty or obligation of the Indemnified Person at law or in
equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 10.4. Indemnification.
_______________
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees and
expenses), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit
or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
the Trust, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the
Company Indemnified Person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was
unlawful.
(ii) The 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) Any indemnification under paragraphs (i) and (ii) of
this Section 10.4(a) (unless ordered by a court) shall be made by the
Sponsor or the Debenture Issuer, as the case may be, only as
authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct
set forth in paragraphs (i) and (ii). Such determination shall be
made (1) by the Administrative Trustees by a majority vote of a
quorum consisting of such Administrative Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a
written opinion, or (3) by the Common Security Holder of the Trust.
(iv) Expenses (including attorneys' fees and expenses)
incurred by a Company Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a) shall
be paid by the Sponsor or the Debenture Issuer, as the case may be,
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
Administrative Trustees by a majority vote of a quorum of
disinterested Administrative Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a
written opinion or (iii) the Common Security Holder of the Trust,
that, based upon the facts known to the Administrative Trustees,
counsel or the Common Security Holder at the time such determination
is made, such Company Indemnified Person acted in bad faith or in a
manner that such person did not believe to be in or not opposed to
the best interests of the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event
shall any advance be made in instances where the Administrative
Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty
to the Trust or its Common or Capital Security Holders.
(v) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 10.4(a) shall not be deemed exclusive of any other rights to
which those seeking indemnification and advancement of expenses may
be entitled under any agreement, vote of stockholders or
disinterested directors of the Debenture Issuer or Capital Security
Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such
office. All rights to indemnification under this Section 10.4(a)
shall be deemed to be provided by a contract between the Sponsor or
the Debenture Issuer as the case may be 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.
(vi) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether
or not the Sponsor or the Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this
Section 10.4(a).
(vii) 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.
(viii) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall,
unless otherwise provided when authorized or ratified, continue as
to a person who has ceased to be a Company Indemnified Person and
shall inure to the benefit of the heirs, executors and
administrators of such a person. The obligation to indemnify as
set forth in this Section 10.4(a) shall survive the satisfaction and
discharge of this Declaration.
(b) The Sponsor agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee and
the Delaware Trustee, and (iv) any officers, directors, shareholders,
members, partners, employees, representatives, custodians, nominees or
agents of the Property Trustee and the Delaware Trustee (each of the
Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless
against, any and all loss, liability, damage, claim or expense including
taxes (other than taxes based on the income of such Fiduciary Indemnified
Person) incurred without negligence 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 provisions of this Section
10.4(b) shall survive the satisfaction and discharge of this Declaration
or the resignation or removal of the Property Trustee or the Delaware
Trustee, as the case may be.
SECTION 10.5. Outside Businesses.
__________________
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee (subject to Section 5.3(c)) may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders 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 Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee
and the Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any
such particular investment or other opportunity. Any Covered Person, the
Delaware Trustee and the Property Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the
Sponsor, or may act as depositary for, trustee or agent for, or act on any
committee or body of holders of, securities or other obligations of the
Sponsor or its Affiliates.
SECTION 10.6. Compensation; Fees.
__________________
The Sponsor agrees:
(a) to pay to the Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust); and
(b) except as otherwise expressly provided herein, to reimburse
the Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any provision
of this Declaration and the offering of the Capital Securities (including
the reasonable compensation and the expenses and disbursements of their
respective agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith.
The provisions of this Section 10.6 shall survive the dissolution of the
Trust and the termination of this Declaration and the removal or resignation
of any Trustee.
No Trustee may claim any lien or charge on any property of the Trust as
a result of any amount due pursuant to this Section 10.6
ARTICLE XI
ACCOUNTING
SECTION 11.1. Fiscal Year.
___________
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year,
or such other year as is required by the Code.
SECTION 11.2. Certain Accounting Matters.
__________________________
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of
account, records and supporting documents, which shall reflect in
reasonable detail, each transaction of the Trust. The books of account
shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles, consistently applied.
The Trust shall use the accrual method of accounting for United States
federal income tax purposes.
(b) The Administrative Trustees shall, as soon as available
after the end of each Fiscal Year of the Trust, cause to be prepared and
mailed to each Holder of Securities unaudited financial statements of the
Trust for such Fiscal Year, prepared in accordance with generally accepted
accounting principles; provided that if the Trust is required to comply
with the periodic reporting requirements of Sections 13(a) or 15(d) of
the Exchange Act, such financial statements for such Fiscal Year shall be
examined and reported on by a firm of independent certified public
accountants selected by the Administrative Trustees (which firm may be
the firm used by the Sponsor).
(c) The Administrative Trustees shall cause to be duly prepared
and delivered to each of the Holders, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is
required by the Code and the Treasury Regulations. Notwithstanding any
right under the Code to deliver any such statement at a later date, the
Administrative Trustees shall endeavor to deliver all such information
statements within 30 days after the end of each Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly prepared
and filed with the appropriate taxing authority, an annual United States
federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax
returns required to be filed by the Administrative Trustees on behalf of
the Trust with any state or local taxing authority.
SECTION 11.3. Banking.
_______
The Trust may maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly
to the Property Trustee Account and no other funds of the Trust shall be
deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Administrative Trustees; provided, however,
that the Property Trustee shall designate the signatories for the Property
Trustee Account.
SECTION 11.4. Withholding.
___________
The Trust and the Administrative Trustees shall comply with all
withholding requirements under United States federal, state and local law.
The Trust shall request, and the Holders shall provide to the Trust, such
forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms as
shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Administrative
Trustees shall file required forms with applicable jurisdictions and, unless
an exemption from withholding is properly established by a Holder, shall remit
amounts withheld with respect to the Holder to applicable jurisdictions. To
the extent that the Trust is required to withhold and pay over any amounts to
any authority with respect to Distributions or allocations to any Holder, the
amount withheld shall be deemed to be a Distribution in the amount of the
withholding to the Holder. In the event of any claim over withholding, Holders
shall be limited to an action against the applicable jurisdiction. If the
amount required to be withheld was not withheld from actual Distributions made,
the Trust may reduce subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1. Amendments.
__________
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended
by a written instrument approved and executed by the Administrative
Trustees (or, if there are more than two Administrative Trustees, a
majority of the Administrative Trustees) and:
(i) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property
Trustee; and
(ii) 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, the Property Trustee shall have first
received;
(A) an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
and
(B) an opinion of counsel (who may be counsel
to the Sponsor or the Trust) that such amendment is
permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities),
provided, however, that the Property Trustee and the Delaware
Trustee shall not be required to sign any such amendment which affects
the rights, powers, duties, obligations or immunities of the Property
Trustee, and
(ii) to the extent the result of such amendment would be
to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust;
(B) reduce or otherwise adversely affect the
powers of the Property Trustee in contravention of the Trust
Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(c) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only
with such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities;
(f) The rights of the Holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities; and
(g) Notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity, correct or supplement any
provision in this Declaration that may be inconsistent with any other
provision of this Declaration or to make any other provisions with
respect to matters or questions arising under this Declaration which
shall not be inconsistent with the other provisions of the
Declaration;
(ii) modify, eliminate or add to any provisions of the
Declaration to such extent as shall be necessary to ensure that the
Trust will be classified for United States federal income tax purposes
as a grantor trust at all times that any Securities are outstanding or
to ensure that the Trust will not be required to register as an
Investment Company under the Investment Company Act; and
(iii) add covenants, restrictions or obligations of the
Sponsor;
provided, however, that in the case of clause (i), (ii) and (iii),
such action shall not adversely affect in any material respect the
interests of the Holders of the Securities, and any amendments of
this Declaration pursuant to (i), (ii) or (iii) shall become effective
when notice thereof is given to the Holders of the Securities.
SECTION 12.2. Meetings of the Holders; Action by Written Consent.
__________________________________________________
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrative Trustees (or as provided in the
terms of the Securities) to consider and act on any matter on which Holders
of such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange
on which the Capital Securities are listed or admitted for trading. The
Administrative Trustees shall call a meeting of the Holders of such class
if directed to do so by the Holders of at least 10% in liquidation amount
of such class of Securities. Such direction shall be given by delivering to
the Administrative Trustees one or more notices in a writing stating that
the signing Holders of Securities wish to call a meeting and indicating
the general or specific purpose for which the meeting is to be called. Any
Holders calling a meeting shall specify in writing the certificates
evidencing the Securities held by the Holders 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 is permitted or
required under this Declaration or the rules of any stock exchange on
which the Capital Securities are listed or admitted for trading, such
vote, consent or approval may be given at a meeting of the Holders.
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 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 entitled to vote who have not consented
in writing. The Administrative Trustees may specify that any written
ballot submitted to the Security Holders for the purpose of taking
any action without a meeting shall be returned to the Trust within
the time specified by the Administrative Trustees;
(ii) each Holder may authorize any Person to act for it by
proxy on all matters in which a Holder is entitled to participate,
including waiving notice of any meeting, or voting or participating at
a meeting. No proxy shall be valid after the expiration of 11 months
from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable prior to the vote by 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 were
stockholders of a Delaware corporation;
(iii) each meeting of the Holders shall be conducted by the
Administrative Trustees or by such other Person that the
Administrative Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules
of any stock exchange on which the Capital Securities are then listed
or trading, otherwise provides, the Administrative Trustees, in their
sole discretion, shall establish all other provisions relating to
meetings of Holders, including notice of the time, place or purpose
of any meeting at which any matter is to be voted on by any Holders
of Securities, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with respect to the
exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1. Representations and Warranties of Property Trustee.
__________________________________________________
The Trustee that acts as initial Property Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the terms
of, this Declaration;
(b) the Property Trustee satisfies the requirements set forth in
Section 5.3(a);
(c) The execution, delivery and performance by the Property
Trustee of this Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. This Declaration
has been duly executed and delivered by the Property Trustee and
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(d) The execution, delivery and performance of this Declaration
by the Property Trustee does not conflict with or constitute a breach of
the articles of association or incorporation, as the case may be, or the
by-laws (or other similar organizational documents) of the Property
Trustee; and
(e) No consent, approval or authorization of, or registration
with or notice to, any state or federal banking authority is required for
the execution, delivery or performance by the Property Trustee of this
Declaration.
SECTION 13.2. Representations and Warranties of Delaware Trustee.
__________________________________________________
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee satisfies the requirements set forth in
Section 5.2 and has the power and authority to execute and deliver, and
to carry out and perform its obligations under the terms of, this
Declaration and, if it is not a natural person, is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization;
(b) The execution, delivery and performance by the Delaware
Trustee of this Declaration has been duly authorized by all necessary
corporate action on the part of the Delaware Trustee. This Declaration has
been duly executed and delivered by the Delaware Trustee and constitutes a
legal, valid and binding obligation of the Delaware Trustee, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) 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; and
(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
REGISTRATION RIGHTS
SECTION 14.1. Registration Rights Agreement.
_____________________________
The Holders of the Capital Securities, the Debentures and the Capital
Securities Guarantee (collectively, the "Registrable Securities") are entitled
to the benefits of the Registration Rights Agreement.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1. 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 Administrative Trustees
at the Trust's mailing address set forth below (or such other address as
the Trust may give notice of to the Holders and the Property Trustee):
Equitable of Iowa Companies Capital Trust II
c/o Equitable of Iowa Companies
604 Locust Street
Des Moines, Iowa 50309
Telecopy No. (515) 245-6973
(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):
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
Telecopy No. (312) 407-4656
(c) if given to the Property Trustee, at the Property Trustee's
mailing address set forth below (or such other address as the Property
Trustee may give notice of to the Holders):
The First National Bank of Chicago
One First National Plaza - Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services Division
(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 and the
Property Trustee):
Equitable of Iowa Companies
604 Locust Street
Des Moines, Iowa 50309
Telecopy No. (515) 245-6973
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 15.2. Governing Law.
_____________
This 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
principles of conflict of laws.
SECTION 15.3. Intention of the Parties.
________________________
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention
of the parties.
SECTION 15.4. 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 15.5. 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 15.6. 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.
SECTION 15.7. Counterparts.
____________
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have
the same force and effect as though all of the signers had signed a single
signature page.
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
/s/ Fred S. Hubbell
__________________________________________
Fred S. Hubbell, as Administrative Trustee
/s/ Paul E. Larson
__________________________________________
Paul E. Larson, as Administrative Trustee
/s/ John A. Merriman
__________________________________________
John A. Merriman, as Administrative Trustee
FIRST CHICAGO DELAWARE INC.
as Delaware Trustee
By /s/ Richard D. Manella
________________________________________
Name: Richard D. Manella
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
as Property Trustee
By /s/ Richard D. Manella
________________________________________
Name: Richard D. Manella
Title: Vice President
EQUITABLE OF IOWA COMPANIES
as Sponsor
By /s/ Fred S. Hubbell
________________________________________
Fred S. Hubbell, Chairman, President
and Chief Executive Officer
ANNEX I
TERMS OF
8.424% SERIES A/SERIES B CAPITAL SECURITIES
8.424% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of March 31, 1997 (as amended from time to time, the "Declaration"),
the designation, rights, privileges, restrictions, preferences and other terms
and provisions of the 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 Offering Memorandum referred to below in Section 2(d) of this Annex I):
1. Designation and Number.
______________________
(a) Capital Securities. 50,000 Series A Capital Securities of the
Trust and 50,000 Series B Capital Securities of the Trust, with an
aggregate liquidation amount at any time outstanding with respect to the
assets of the Trust of fifty million dollars ($50,000,000), and each
Capital Security with a liquidation amount with respect to the assets of
the Trust of $1,000 per Security, are hereby designated for the purposes
of identification only as "8.424% Series A Capital Securities" and "8.424%
Series B Capital Securities," respectively (collectively, the "Capital
Securities"). The certificates evidencing the Capital Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of any stock
exchange on which the Capital Securities may be listed.
(b) Common Securities. 1,550 Common Securities of the Trust, with
an aggregate liquidation amount with respect to the assets of the Trust of
one million five hundred fifty thousand dollars ($1,550,000), and each
Common Security with a liquidation amount with respect to the assets of
the Trust of $1,000 per Security, are hereby designated for the purposes
of identification only as "8.424% Common Securities" (the "Common
Securities," and together with the Capital Securities, the "Securities").
The certificates evidencing the Common Securities shall be substantially
in the form of Exhibit A-2 to the Declaration, with such changes and
additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice.
2. Distributions.
_____________
(a) Distributions payable on each Security will be fixed at a rate
per annum of 8.424% (the "Coupon Rate") of the liquidation amount of
$1,000 per Security (the "Liquidation Amount"), such rate being the rate
of interest payable on the Debentures to be held by the Property Trustee.
Except for Distributions which are deferred as provided in Section 2(b),
Distributions in arrears for more than one semi-annual period will bear
interest thereon compounded semi-annually at the Coupon Rate (to the
extent permitted by applicable law). Pursuant to the Registration Rights
Agreement, in certain limited circumstances the Debenture Issuer will be
required to pay Liquidated Damages (as defined in the Registration Rights
Agreement) with respect to the Debentures. The term "Distributions," as
used herein, includes distributions of any such interest and Liquidated
Damages payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds legally
available therefor.
(b) Distributions on the Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been
paid or duly provided for or, if no Distributions have been paid or duly
provided for, from April 3, 1997, and will be payable semi-annually in
arrears on April 1 and October 1 of each year, commencing on October 1,
1997 (each, a "Distribution Date"), except as otherwise described below.
Distributions will be computed on the basis of a 360-day year consisting of
twelve 30-day months and for any period less than a full calendar month on
the basis of the actual number of days elapsed in such month. As long as no
Event of Default has occurred and is continuing under the Indenture, the
Debenture Issuer has the right under the Indenture to defer payments of
interest by extending the interest payment period at any time and from time
to time on the Debentures for a period not exceeding 10 consecutive semi-
annual periods, including the first such semi-annual period during such
period (each, an "Extended Interest Payment Period"), during which Extended
Interest Payment Period no interest shall be due and payable on the
Debentures, provided that no Extended Interest Payment Period shall end on
a day other than an Interest Payment Date (as defined in the Indenture) for
the Debentures or shall extend beyond the Maturity Date (as defined in the
Indenture) of the Debentures. As a consequence of such deferral,
Distributions shall not be due and payable and will also be deferred.
Despite such deferral, Distributions will continue to accumulate with
interest thereon (to the extent permitted by applicable law) at the Coupon
Rate compounded semi-annually during any such Extended Interest Payment
Period. Prior to the termination of any such Extended Interest Payment
Period, the Debenture Issuer may further defer payments of interest by
further extending such Extended Interest Payment Period; provided that such
Extended Interest Payment Period, together with all such previous and
further extensions within such Extended Interest Payment Period, may not
exceed 10 consecutive semi-annual periods, including the first semi-annual
period during such Extended Interest Payment Period, or extend beyond the
Maturity Date of the Debentures. Upon the termination of any Extended
Interest Payment Period and the payment of all amounts then due, the
Debenture Issuer may commence a new Extended Interest Payment Period,
subject to the above requirements.
(c) In the event the Debenture Issuer exercises the right under the
Indenture to defer payments of interest on the Debentures, then (i) the
Debenture Issuer shall not declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with
respect to, any of the Company's capital stock (which includes common,
preferred and preference stock) or (ii) make any payment of principal,
interest or premium, if any, on or repay or repurchase or redeem any debt
securities of the Company (including any Other Debentures as defined in
the Indenture) that rank pari passu with or junior in right of payment to
the Securities or (iii) make any guarantee payments with respect to any
guarantee by the Company of any securities of any Subsidiary of the
Company (including Other Guarantees as defined in the Indenture) if such
guarantee ranks pari passu or junior in right of payment to the Securities
(other than (a) dividends or distributions in shares of, or options,
warrants or rights to subscribe for or purchase shares of, capital stock
of the Company; (b) any declaration of a dividend in connection with the
implementation of a stockholder's rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any
such rights pursuant thereto; (c) payments under the Capital Securities
Guarantee; (d) as a direct result of, and only to the extent required in
order to avoid the issuance of fractional shares of capital stock
following, a reclassification of the Company's capital stock or the
exchange or the conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock
or pursuant to an acquisition in which fractional shares of the Company's
capital stock would otherwise be issued; (e) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security
being converted or exchanged; and (f) purchases of common stock related to
the issuance of common stock or rights under any benefit plans for
directors, officers, agents or employees of the Company or its
subsidiaries, or any of the Company's dividend reinvestment or director,
officer, agent or employee stock purchase plans).
(d) Except as provided in Section 2(c) above, Distributions on the
Securities will be payable to the Holders thereof as they appear on the
books and records of the Trust on the fifteenth (15) day of the month
preceding the month in which the relevant Distribution Date occurs, which
Distribution 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 Global
Capital Securities will be made as described under the heading
"Description of the Capital Securities -- Form, Denomination, Book-Entry
Procedures and Transfer" in the Offering Memorandum dated March 31, 1997,
of the Debenture Issuer and the Trust relating to the Securities and the
Debentures (the "Offering Memorandum"). Payments in respect of Capital
Securities held in certificated form will be made by check mailed to the
Holder entitled thereto. The relevant record dates for the Common
Securities shall be the same as the record dates for the Capital
Securities. Distributions payable on any Securities that are not
punctually paid on any Distribution Date, as a result of the Debenture
Issuer having failed to make a payment under the Debentures, will cease
to be payable to the Holder on the relevant record date, and such
defaulted 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), 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.
(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 termination of the Trust pursuant to Sections 4.4 and
8.1(a)(iii) or Sections 8.1(a)(i), (ii) or (iv) of the Declaration, the Trust
shall be liquidated by the Administrative Trustees as expeditiously as the
Administrative Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, to the Holders of the Securities a Like Amount (as defined below) of the
Debentures on a Pro Rata basis, unless such distribution is determined by the
Property Trustee not to be practicable. Upon such determination or upon any
other voluntary or involuntary termination or liquidation of the Trust in
which the Debentures are not distributed, the holders of the Trust Securities
will be entitled to receive out of the assets of the Trust legally available
for distribution to Holders, after satisfaction of liabilities to creditors of
the Trust as provided by applicable law, an amount equal to the aggregate of
the liquidation amount of $1,000 per Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the Securities,
Securities having a Liquidation Amount equal to the principal amount of
Debentures to be paid in accordance with their terms and (ii) with respect to
a distribution of Debentures upon the liquidation of the Trust, Debentures
having a principal amount equal to the Liquidation Amount of the Securities
of the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets legally available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis,
except that if an Event of Default has occurred and is continuing, the Capital
Securities shall have priority over the Common Securities.
4. Redemption and Distribution.
___________________________
(a) Upon the repayment of the Debentures, at maturity or upon
optional redemption pursuant to a Special Event, as described below, the
proceeds from such repayment shall be simultaneously applied by the
Property Trustee (subject to the Property Trustee having received notice
no later than 45 days prior to such repayment) to redeem the Securities
at a redemption price equal to (i) in the case of the repayment of the
Debentures at maturity, the Maturity Redemption Price (as defined below)
and (ii) in the case of the optional redemption of the Debentures upon
the occurrence and continuation of a Special Event, the Special Event
Redemption Price (as defined below). The Maturity Redemption Price and
the Special Event Redemption Price are referred to collectively as the
"Redemption Price." Holders will be given not less than 30 nor more
than 60 days notice of such redemption.
(b) The "Maturity Redemption Price," with respect to a redemption
of Securities, shall mean an amount equal to the principal of and accrued
and unpaid interest on the Debentures as of the Maturity Date.
(c) If at any time a Tax Event or an Investment Company Event (each
as defined below, and each a "Special Event") occurs, the Debenture Issuer
shall have the right (subject to the conditions set forth in the
Indenture), upon not less than 30 nor more than 60 days notice, to prepay
the Debentures in whole, but not in part, within the 90 days following
the occurrence of such Special Event (the "90 Day Period") and,
simultaneous with such prepayment, to cause a Like Amount of the
Securities to be redeemed by the Trust at the Special Event Redemption
Price on a Pro Rata basis.
"Tax Event" shall occur upon receipt by the Administrative Trustees of
an opinion (a "Tax Event Opinion") of independent tax counsel experienced in
such matters to the effect that, as a result of (a) any amendment to, 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 official administrative pronouncement
or judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement or decision is
announced on or after March 31, 1997, there is more than an insubstantial risk
that (i) the Trust is, or as a result of the issuance of the securities
pursuant to the Exchange Offer (the "Exchange Securities") would be, or will
be within 90 days of the date of such opinion, subject to United States
federal income tax with respect to income received or accrued on the Debentures
or any of the Exchange Securities, (ii) interest payable by the Debenture
Issuer on the Debentures is not or upon the issuance of any of the Exchange
Securities would not be, or within 90 days of the date of such opinion, will
not be, deductible by the Debenture Issuer, in whole or in part, for United
States federal income tax purposes, or (iii) the Trust is, or will be within
90 days of the date of such opinion, subject to more than a de minimis amount
of other taxes, duties or other governmental charges.
"Investment Company Event" means the receipt by the Administrative
Trustees of an opinion of counsel to the Company experienced in such matters
to the effect that, as a result of the occurrence of any amendment to, or
change in law or regulation or a written change (including any announced
prospective change) in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority,
there is more than an insubstantial risk that the Trust is or will be
considered an "investment company" that is required to be registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act"),
which change or prospective change becomes effective or would become effective,
as the case may be, on or after the date of the Offering Memorandum.
"Special Event Redemption Price" shall mean, with respect to a redemption
of Securities, a price equal to the greater of (i) 100% of the principal amount
of the Debentures or (ii) the sum, as determined by a Quotation Agent (as
defined in the Indenture), of the present values of the principal amount of the
Debentures, together with scheduled payments of interest thereon from the
redemption date to and including the Maturity Date of the Debentures, in each
case discounted to the redemption date on a semi-annual basis (assuming a 360-
day year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as
defined in the Indenture), plus, in either case, accumulated and unpaid
Distributions thereon, if any, to the date of such redemption.
(d) On and from the date fixed by the Administrative Trustees for
any distribution of Debentures and liquidation of the Trust: (i) the
Securities will no longer be deemed to be outstanding, (ii) the Clearing
Agency or its nominee (or any successor Clearing Agency or its nominee),
as the Holder of the Capital Securities, will receive a registered global
certificate or certificates representing the Debentures to be delivered
upon such distribution and (iii) any certificates representing Securities
(including, but not limited to, the Common Securities) not held by the
Clearing Agency or its nominee (or any successor Clearing Agency or its
nominee) will be deemed to represent beneficial interests in the
Debentures until such certificates are presented to the Debenture Issuer
or its agent for cancellation.
(e) The procedure with respect to prepayments or distributions of
Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder 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 prepayment of the
Debentures. For purposes of the calculation of the date of redemption
or exchange and the dates on which notices are given pursuant to this
Section 4(e)(i), a Redemption/Distribution Notice shall be deemed to
be given on the day such notice is first mailed by first-class mail,
postage prepaid, to Holders. Each Redemption/Distribution Notice shall
be addressed to the Holders 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) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, (which notice will be irrevocable),
then (A) with respect to Capital Securities issued in book-entry
form, by 12:00 noon, New York City time, on the redemption date,
provided that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related redemption
or maturity of the Debentures by 10:00 a.m., New York City time, on
the maturity date or the date of redemption, as the case requires,
the Property Trustee will deposit irrevocably with the Clearing
Agency or its nominee (or successor Clearing Agency or its nominee)
funds sufficient to pay the applicable Redemption Price with respect
to such Capital Securities and will give the Clearing Agency
irrevocable instructions and authority to pay the Redemption Price
to the relevant Clearing Agency Participants, and (B) with respect
to Capital Securities issued in certificated form and Common
Securities, provided that the Debenture Issuer has paid the Property
Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Property Trustee will
pay the relevant Redemption Price to the Holders 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 accumulate on the Securities so called
for redemption and all rights of Holders of Securities so called for
redemption will cease, except the right of the Holders of such
Securities to receive the Redemption Price, but without interest on
such Redemption Price, and such Securities shall cease to be
outstanding.
(iii) Payment of accumulated and unpaid Distributions on
the redemption date of the Securities will be subject to the rights
of Holders of Securities on the close of business on a regular record
date in respect of a Distribution Date occurring on or prior to such
redemption date.
(iv) Neither the Administrative Trustees nor the Trust shall
be required to register or cause to be registered the transfer of the
Securities beginning on the opening of business 15 days before the
day of mailing of a notice of redemption and ending at the close of
business on the day of such mailing. If any date fixed for
redemption of 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 (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 Redemption Price in respect of any
Securities is improperly withheld or refused and not paid either by
the Property Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accumulate from the original redemption date to the
actual date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating
the Redemption Price.
(v) Redemption/Distribution Notices shall be sent by the
Property Trustee on behalf of the Trust to (A) in respect of the
Capital Securities, the Clearing Agency or its nominee (or any
successor Clearing Agency or its nominee) if certificates evidencing
Global Capital Securities have been issued or, if certificates
evidencing Definitive Capital Securities have been issued, to the
Holder thereof, and (B) in respect of the Common Securities to the
Holder thereof.
(vi) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), the
Sponsor or any of its subsidiaries may at any time and from time to
time purchase outstanding Capital Securities by tender, in the open
market or by private agreement.
5. Voting Rights - Capital Securities.
__________________________________
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Capital Securities
will have no voting rights.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on such Debenture Trustee with
respect to the Debentures, (ii) waive any past default that is waivable
under Section 5.07 of the Indenture, (iii) exercise any right to rescind
or annul a declaration of acceleration of the maturity of the principal
of the Debentures or (iv) consent to any amendment, modification or
termination of the Indenture or the Debentures, where such consent shall
be required to be made by the holders of a majority in aggregate principal
amount of the Debentures then outstanding, without, in each case, obtaining
the prior approval of the Holders of a Majority in liquidation amount of
all outstanding Capital Securities; provided, however, that where a
consent under the Indenture would require the consent of each holder of
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior approval of each Holder of the Capital
Securities. The Trustees shall not revoke any action previously authorized
or approved by a vote of the Holders of the Capital Securities except by
subsequent vote of such Holders. Subject to and except as provided in
Section 2.7 of the Declaration, the Property Trustee shall notify each
Holder of Capital Securities of any notice of default with respect to the
Debentures. In addition to obtaining the foregoing approvals of such
Holders of the Capital Securities, prior to taking any of the actions set
forth in (ii)-(iv) above, the Trustees shall obtain an opinion of counsel
experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation for United States
federal income tax purposes on account of such action.
If the Property Trustee fails to enforce its rights under the Declaration,
any Holder of Capital Securities may institute a legal proceeding directly
against any person to enforce the Property Trustee's rights under the
Declaration without first instituting a legal proceeding against the Property
Trustee or any other Person. If an Event of Default under the Declaration has
occurred and is continuing and such event is attributable to the failure of the
Debenture Issuer to pay principal of or premium, if any, or interest on the
Debentures on the due date (or in the case of redemption, on the redemption
date), then a Holder of Capital Securities may pursuant to Section 5.04 of the
Indenture and Section 3.8(e) of the Declaration institute a Direct Action for
enforcement of payment to such Holder of the principal of or premium, if any,
or interest on a Like Amount of Debentures on or after the respective due date
specified in the Debentures. In connection with such Direct Action, the rights
of the Holder of the Common Securities will be subrogated to the rights of
such Holder of Capital Securities to the extent of any payment made by the
Debenture Issuer to such Holder of Capital Securities in such Direct Action.
Except as provided in the second preceding sentence and in Section 3.8(e) of
the Declaration, the Holders of Capital Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Capital Securities may be given
at a separate meeting of Holders of Capital Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Administrative Trustees will cause a notice
of any meeting at which Holders of Capital Securities are entitled to vote,
or of any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Capital Securities. Each such
notice will include a statement setting forth (i) the date of such meeting or
the date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Capital Securities will be
required for the Trust to redeem and cancel Capital Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall
not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
_________________________________
(a) Except as provided under Sections 6(b), 6(c), and 7 as otherwise
required by law and the Declaration, the Holders of the Common Securities
will have no voting rights.
(b) Unless an Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by the Holder of the
Common Securities. If an Event of Default has occurred and is continuing,
the Property Trustee and the Delaware Trustee may be removed at such time
by the Holders of a Majority in liquidation amount of the outstanding
Capital Securities. In no event will the Holders of the Capital
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which voting rights are vested exclusively in the
Sponsor as the Holder of the Common Securities. No resignation or
removal of a Trustee and no appointment of a successor trustee shall be
effective until the acceptance of appointment by the successor trustee
in accordance with the provisions of the Declaration.
(c) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing
any trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section
5.07 of the Indenture, (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the
Debentures or (iv) consent to any amendment, modification or termination
of the Indenture or the Debentures, where such consent shall be required
to be made by the holders of a majority in aggregate principal amount of
the Debentures then outstanding, without, in each case, obtaining the prior
approval of the Holders of a Majority in liquidation amount of all
outstanding Common Securities; provided, however, that where a consent
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee
without the prior approval of each Holder of the Common Securities. The
Trustees shall not revoke any action previously authorized or approved by
a vote of the Holders of the Common Securities except by subsequent vote
of such Holders. Subject to Section 2.7 of the Declaration, the Property
Trustee shall notify each Holder of Common Securities of any notice of
default with respect to the Debentures. In addition to obtaining the
foregoing approvals of such Holders of the Common Securities, prior to
taking any of the actions set forth in (ii)-(iv) above, the Trustees shall
obtain an opinion of counsel experienced in such matters to the effect
that the Trust will not be classified as an association taxable as a
corporation for United States federal income tax purposes on account of
such action.
If the Property 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 Property Trustee's rights under the
Declaration without first instituting a legal proceeding against the Property
Trustee or any other Person. If an Event of Default under the Declaration has
occurred and is continuing and such event is attributable to the failure of
the Debenture Issuer to pay principal of or premium, if any, or interest on
the Debentures on the due date (or in the case of redemption, on the
redemption date), then a Holder of Common Securities may institute a Direct
Action for enforcement of payment to such Holder of the principal of or
premium, if any, or interest on a Like Amount of Debentures on or after the
respective due date specified in the Debentures. In connection with Direct
Action, the rights of the Common Securities Holder will be subordinated to the
rights of such Holder of Capital Securities to the extent of any payment made
by the Debenture Issuer to such Holder of Common Securities in such Direct
Action. Except as provided in the second preceding sentence, the Holders of
Common Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Administrative Trustees will cause a notice
of any meeting at which Holders of Common Securities are entitled to vote, or
of any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Common Securities. Each such
notice will include a statement setting forth (i) the date of such meeting or
the date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
_______________________________________
In addition to the requirements set out in Section 12.1 of the
Declaration, the Declaration may be amended from time to time by the Sponsor,
the Property Trustee and the Administrative Trustees, without the consent of
the Holders of the Securities (i) to cure any ambiguity, correct or supplement
any provisions in the Declaration that may be inconsistent with any other
provisions, or to make any other provisions with respect to matters or
questions arising under the Declaration which shall not be inconsistent with
the other provisions of the Declaration, (ii) to modify, eliminate or add to
any provisions of the Declaration to such extent as shall be necessary to
ensure that the Trust will be classified for United States federal income tax
purposes as a grantor trust at all times that any Securities are outstanding
or to ensure that the Trust will not be required to register as an
"Investment Company" under the Investment Company Act, or (iii) to add
covenants, restrictions or obligations of the Sponsor; provided, however, that
such action shall not adversely affect in any material respect the interests
of any Holder of Securities, and any amendments of the Declaration shall
become effective when notice thereof is given to the holders of the Securities.
Under the circumstances referred to in Section 12.1(c) of the Declaration, the
Declaration may be amended by the Trustees and the Sponsor with (i) the
consent of Holders representing a Majority in liquidation amount of all
outstanding Securities, and (ii) receipt by the Trustees of an Opinion of
Counsel to the effect that such amendment or the exercise of any power granted
to the Trustees in accordance with such amendment will not affect the Trust's
status as a grantor trust for United States federal income tax purposes or the
Trust's exemption from status as an Investment Company under the Investment
Company Act, provided that, (A) without the consent of each Holder of the
Securities, the Declaration may not be amended to (i) change the amount or
timing of any Distribution on the Securities or otherwise adversely affect
the amount of any Distribution required to be made in respect of the
Securities as of a specified date, (ii) restrict the right of a Holder of the
Securities to institute suit for the enforcement of any such payment on or
after such date and (B) without the consent of each Holder of Capital
Securities, the Declaration may not be amended to restrict the right of a
Holder of Capital Securities to bring a Direct Action.
8. Pro Rata.
________
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each
Holder according to the aggregate liquidation amount of the Securities held
by the relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Capital Securities pro rata according to the aggregate liquidation amount of
Capital Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Capital Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Capital Securities, to
each Holder of Common Securities pro rata according to the aggregate
liquidation amount of Common Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Common Securities outstanding. In
any such proration the Trust may make such adjustments as may be appropriate
in order that only Securities in authorized denominations shall be redeemed
(subject to the minimum block requirement of Section 9.2(m) of the
Declaration).
9. Ranking.
_______
The Capital Securities rank pari passu with the Common Securities and
payment thereon shall be made Pro Rata with the Common Securities, except
that, if an Event of Default under the Declaration occurs and is continuing,
no payments in respect of Distributions on, or payments upon liquidation,
redemption, repurchase or otherwise with respect to, the Common Securities
shall be made until the Holders of the Capital Securities shall be paid in
full in cash the Distributions, Redemption Price, Liquidation Distribution
and other payments to which they are entitled at such time.
10. Acceptance of Securities Guarantee and Indenture.
________________________________________________
Each Holder of Capital Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
____________________
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
12. Miscellaneous.
_____________
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Capital Securities
Guarantee or the Common Securities Guarantee (as may be appropriate) and the
Indenture (including any supplemental indenture) to a Holder without charge on
written request to the Sponsor at its principal place of business.
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY, INSERT: THIS
CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO
TRANSFER OF THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL
SECURITY AS A WHOLE BY THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY
OR BY A NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER
NOMINEE OF THE CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK,
NEW YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[IF THIS CAPITAL SECURITY IS A RESTRICTED CAPITAL SECURITY, INSERT: THIS
CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE DATE
(THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH
EQUITABLE OF IOWA COMPANIES (THE "COMPANY") OR ANY AFFILIATE OF THE COMPANY
WAS THE OWNER OF THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL
SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS
THIS CAPITAL SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT; OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT
TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER (i) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND (ii) PURSUANT TO CLAUSE (D), TO REQUIRE THAT THE TRANSFEROR
DELIVER TO THE TRUST A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF
ANNEX A TO THE OFFERING MEMORANDUM DATED MARCH 31, 1997. SUCH HOLDER FURTHER
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.]
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO THE "PROHIBITED TRANSACTIONS" PROVISIONS OF SECTION 406 OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR
SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED ("THE CODE")
AND IS NOT USING THE ASSETS OF ANY SUCH PLAN TO ACQUIRE THIS CAPITAL SECURITY
OR (ii) THE ACQUISITION AND HOLDING OF THIS CAPITAL SECURITY BY IT IS NOT
PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, OR IS
EXEMPT FROM ANY SUCH PROHIBITION BY APPLICATION OF A STATUTORY, REGULATORY OR
ADMINISTRATIVE EXEMPTION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES
TO BE BOUND BY THE PROVISIONS OF A REGISTRATION RIGHTS AGREEMENT DATED AS OF
MARCH 31, 1997 AMONG EQUITABLE OF IOWA COMPANIES CAPITAL TRUST II, EQUITABLE
OF IOWA COMPANIES AND CERTAIN OTHER PARTIES NAMED THEREIN.
Certificate Number Aggregate Liquidation Amount
of Capital Securities: $
______________
CUSIP NO.
___________
Certificate Evidencing Capital Securities
of
Equitable of Iowa Companies Capital Trust II
8.424% Series __ Capital Securities
(liquidation amount $1,000 per Capital Security)
Equitable of Iowa Companies Capital Trust II, a statutory business trust
created under the laws of the State of Delaware (the "Trust"), hereby certifies
that ______________ (the "Holder") is the registered owner of [$__________ in
aggregate liquidation amount of Capital Securities of the Trust]/*/ [the
aggregate liquidation amount of Capital Securities of the Trust specified in
Schedule A hereto.]/**/ representing undivided beneficial interests in the
assets of the Trust designated the 8.424% Series __ Capital Securities
(liquidation amount $1,000 per Capital Security) (the "Capital Securities").
Subject to the Declaration (as defined below), the Capital Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities
represented hereby are 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 March 31, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Capital
Securities as set forth in Annex I to the Declaration. Capitalized terms used
but not defined herein shall have the meaning given them in the Declaration.
The Sponsor will provide a copy of the Declaration, the Capital Securities
Guarantee and the Indenture to a Holder without charge upon written request to
the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder and to the benefits of the Capital
Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Capital
Securities as evidence of indirect beneficial ownership in the Debentures.
- -----------------------------------------
* Insert in Definitive Capital Securities only.
** Insert in Global Capital Securities only.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of __________, ____.
EQUITABLE OF IOWA COMPANIES
CAPITAL TRUST II
By:
____________________________
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the
within-mentioned Declaration.
Dated: ____________________, ____
THE FIRST NATIONAL BANK OF CHICAGO
as Property Trustee
By:
______________________________
Name:
Authorized Officer
[SIGNATURE PAGE OF CERTIFICATE EVIDENCING CAPITAL SECURITIES]
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed at a rate
per annum of 8.424% (the "Coupon Rate") of the liquidation amount of $1,000
per Capital Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Except for Distributions which
are deferred as provided below, Distributions in arrears for more than one
semi-annual period will bear interest thereon compounded semi-annually at the
Coupon Rate (to the extent permitted by applicable law). Pursuant to the
Registration Rights Agreement, in certain limited circumstances the Debenture
Issuer will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement) with respect to the Debentures. The term
"Distributions", as used herein, includes such cash distributions and any such
interest and such Liquidated Damages payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds legally available therefor.
Distributions on the Capital Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or
duly provided for or, if no Distributions have been paid or duly provided for,
from April 3, 1997 and will be payable semi-annually in arrears, on April 1
and October 1 of each year, commencing on October 1, 1997, except as
otherwise described below. Distributions will be computed on the basis of a
360-day year consisting of twelve 30-day months and, for any period less than a
full calendar month, the number of days elapsed in such month. As long as no
Event of Default has occurred and is continuing under the Indenture, the
Debenture Issuer has the right under the Indenture to defer payments of
interest by extending the interest payment period at any time and from time to
time on the Debentures for a period not exceeding 10 consecutive calendar semi
- -annual periods, including the first such semi-annual period during such
extension period (each an "Extension Period"), provided that no Extension
Period shall end on a day other than an Interest Payment Date for the
Debentures or shall extend beyond the Maturity Date of the Debentures. As a
consequence of such deferral of payments of interest on the Debentures,
Distributions will also be deferred. Despite such deferral, semi-annual
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate of interest
then accruing on the Debentures) at the Coupon Rate compounded semi-annually
during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further defer payments of interest
by further extending such Extension Period; provided that such Extension
Period, together with all such previous and further extensions within such
Extension Period, may not exceed 10 consecutive semi-annual periods, including
the first semi-annual period during such Extension Period, or extend beyond the
Maturity Date of the Debentures. Payments of accumulated Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date preceding 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.
Subject to certain conditions set forth in the Declaration and the
Indenture, the Property Trustee may, at the direction of the Sponsor, at any
time liquidate the Trust and cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust or, simultaneous with
any prepayment of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Capital Securities shall be redeemable as provided in the Declaration.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security Certificate to:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Insert assignee's social security or tax identification number)
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
______________________________________________________________ agent to
transfer this Capital Security Certificate on the books of the Trust. The
agent may substitute another to act for him or her.
Date:
_____________________________
Signature:
________________________
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
Signature Guarantee/***/:
___________________________________
/***/ Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
_______________________________
Signature
SCHEDULE A/*/
The initial aggregate liquidation amount of Capital Securities evidenced
by the Certificate to which this Schedule is attached is $_________
(equivalent to _____ Capital Securities). The notations on the following
table evidence decreases and increases in the number of Capital Securities
evidenced by such Certificate.
Liquidation
Amount of
Capital
Increase in Securities
Decrease in Liquidation Liquidation Remaining After
Amount of Capital Amount of Capital Such Decrease or Notation by
Securities Securities Increase Registration
_______________________ _________________ ________________ ____________
_______________________________________________________________________________
/*/ Append to Global Capital Securities only.
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW.
Certificate Number Number of Common Securities: _______
Aggregate Liquidation Amount $_______
Certificate Evidencing Common Securities
of
Equitable of Iowa Companies Capital Trust II
8.424% Common Securities
(liquidation amount $1,000 per Common Security)
Equitable of Iowa Companies Capital Trust II, a statutory business trust
created under the laws of the State of Delaware (the "Trust"), hereby
certifies that _______________________ (the "Holder") is the registered owner
of _____ common securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the 8.424% Common Securities
(liquidation amount $1,000 per Common Security) (the "Common Securities").
Subject to the limitations in Section 9.1(c) of the Declaration (as defined
below), 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 March 31, 1997, 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 but not defined herein shall have the meaning given them in the
Declaration. The Sponsor will provide a copy of the Declaration, the Common
Securities Guarantee and the Indenture (including any supplemental indenture)
to a Holder without charge upon written request to the Sponsor at its principal
place of business.
Upon receipt of this certificate, the Sponsor is bound by the Declaration
and is entitled to the benefits thereunder and to the benefits of the Common
Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities
as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ___ day
of ____________, ____.
EQUITABLE OF IOWA COMPANIES
CAPITAL TRUST II
By: _______________________________
Name:
Administrative Trustee
[SIGNATURE PAGE OF FORM OF COMMON SECURITY CERTIFICATE]
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of 8.424%(the "Coupon Rate") of the liquidation amount of $1,000
per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Except for Distributions
which are deferred as provided below, Distributions in arrears for more than
one semi-annual period will bear interest thereon compounded semi-annually at
the Coupon Rate (to the extent permitted by applicable law). Pursuant to the
Registration Rights Agreement, in certain limited circumstances the Debenture
Issuer will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement) with respect to the Debentures. The term
"Distributions", as used herein, includes such cash distributions and any
such interest and such Liquidated Damages payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect
of the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds legally available therefor.
Distributions on the Common Securities will be cumulative, will accrue
from the most recent date to which Distributions have been paid or duly
provided for or, if no Distributions have been paid or duly provided for,
from April 3, 1997 and will be payable semi-annually in arrears, on April 1
and October 1 of each year, commencing on October 1, 1997, except as otherwise
described below. Distributions will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period less than a full calendar
month, the number of days elapsed in such month. As long as no Event of Default
has occurred and is continuing under the Indenture, the Debenture Issuer has
the right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 10 consecutive calendar semi-annual periods, including
the first such semi-annual period during such extension period (each an
"Extension Period"), provided that no Extension Period shall end on a day other
than an Interest Payment Date for the Debentures or extend beyond the Maturity
Date of the Debentures. As a consequence of such deferral of payments of
interest on the Debentures, Distributions will also be deferred. Despite such
deferral, Distributions will continue to accumulate with interest thereon (to
the extent permitted by applicable law, but not at a rate exceeding the rate of
interest then accruing on the Debentures) at the Coupon Rate compounded
semi-annually during any such Extension Period. Prior to the termination of any
such Extension Period, the Debenture Issuer may further defer payments of
interest by further extending such Extension Period; provided that such
Extension Period, together with all such previous and further extensions within
such Extension Period, may not exceed 10 consecutive semi-annual periods,
including the first semi-annual period during such Extension Period, or
extend beyond the Maturity 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 preceding 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.
Subject to certain conditions set forth in the Declaration and the
Indenture, the Property Trustee may, at the direction of the Sponsor, at any
time liquidate the Trust and cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust or, simultaneous with
any prepayment of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Common Securities shall be redeemable as provided in the Declaration.
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.
______________________________
Signature
EXHIBIT 4.4
__________________________________________________________________________
REGISTRATION RIGHTS AGREEMENT
Dated as of April 3, 1997
among
EQUITABLE OF IOWA COMPANIES
EQUITABLE OF IOWA COMPANIES CAPITAL TRUST II
and
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
as Initial Purchaser
__________________________________________________________________________
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of April 3, 1997 among EQUITABLE OF IOWA COMPANIES, an Iowa corporation
(the "Company"), EQUITABLE OF IOWA COMPANIES CAPITAL TRUST II, a business trust
formed under the laws of the state of Delaware (the "Trust"), and MERRILL LYNCH
& CO. and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (together, the
"Initial Purchaser").
This Agreement is made pursuant to the Purchase Agreement dated March 31,
1997 (the "Purchase Agreement"), among the Company, as issuer of the 8.424%
Series A Subordinated Deferrable Interest Debentures due 2027 (the "Series A
Subordinated Debentures"), the Trust and the Initial Purchaser, which provides
for among other things, the sale by the Trust to the Initial Purchaser of
50,000 of the Trust's 8.424% Series A Capital Securities, liquidation amount
$1,000 per Capital Security (the "Series A Capital Securities"), the proceeds
of which will be used by the Trust to purchase the Series A Subordinated
Debentures. The Series A Capital Securities, together with the Series A
Subordinated Debentures and the Company's guarantee of the Series A Capital
Securities (the "Series A Capital Securities Guarantee") are collectively
referred to as the "Series A Securities." In order to induce the Initial
Purchaser to enter into the Purchase Agreement, the Company and the Trust have
agreed to provide to the Initial Purchaser and its direct and indirect
transferees the registration rights set forth in this Agreement. The execution
and delivery of this Agreement is a condition to closing under the Purchase
Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Advice" shall have the meaning set forth in the last paragraph of Section
3 hereof.
"Applicable Period" shall have the meaning set forth in Section 3(s)
hereof.
"Business Day" means any day other than a Saturday, a Sunday, or a day on
which banking institutions in the City of New York are authorized or required
by law or executive order to close.
"Closing Time" shall mean the Closing Time as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.
"Declaration" or "Declaration of Trust" shall mean the Amended and
Restated Declaration of Trust, dated as of March 31, 1997, by the trustees
named therein and the Company as sponsor.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Trust; provided, however, that such depositary
must have an address in the Borough of Manhattan, in The City of New York.
"Effectiveness Period" shall have the meaning set forth in Section 2(b)
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Exchange Offer" shall mean the offer by the Company and the Trust to the
Holders to exchange all of the Registrable Securities (other than Private
Exchange Securities) for a like principal amount or liquidation amount, as the
case may be, of Exchange Securities pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2(a) hereof.
"Exchange Securities" shall mean (i) with respect to the Series A
Subordinated Debentures, the 8.424% Series B Subordinated Deferrable Interest
Debentures due April 1, 2027 (the "Exchange Debentures") containing terms
identical to the Series A Subordinated Debentures (except that they will not
contain terms with respect to the transfer restrictions under the Securities
Act, will not require transfers thereof to be in minimum blocks of $100,000
principal amount and will not provide for any increase in the interest rate
thereon), (ii) with respect to the Series A Capital Securities, the Trust's
8.424% Series B Capital Securities, liquidation amount $1,000 per Capital
Security (the "Exchange Capital Securities") which will have terms identical
to the Series A Capital Securities (except they will not contain terms with
respect to transfer restrictions under the Securities Act, will not require
minimum transfers thereof to be in blocks of $100,000 liquidation amount and
will not provide for any increase in the Distribution rate thereon) and (iii)
with respect to the Series A Capital Securities Guarantee, the Company's
guarantee (the "Exchange Guarantee") of the Exchange Capital Securities which
will have terms identical to the Series A Capital Securities Guarantee.
"Holder" shall mean the Initial Purchaser, for so long as it shall own
any Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture or Declaration of Trust.
"Indenture" shall mean the Indenture relating to the Series A Subordinated
Debentures and the Exchange Debentures dated as of March 31, 1997 among the
Company, as issuer, and First National Bank of Chicago, as trustee, as the same
may be amended from time to time in accordance with the terms thereof.
"Initial Purchaser" shall have the meaning set forth in the preamble to
this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(m) hereof.
"Issue Date" shall mean the date of original issuance of the Series A
Securities.
"Liquidated Damages" shall have the meaning set forth in Section 2(e)
hereof.
"Majority Holders" shall mean the Holders of a majority of the aggregate
liquidation amount of outstanding Series A Capital Securities or Exchange
Securities.
"Material Event" has the meaning set forth in Section 3(e) hereof.
"Participating Broker-Dealer" shall have the meaning set forth in
Section 3(s) hereof.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, limited liability Company, or a government or
agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section 2(a)
hereof.
"Private Exchange Securities" shall have the meaning set forth in
Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"Purchase Agreement" shall have the meaning set forth in the preamble to
this Agreement.
"Records" shall have the meaning set forth in Section 3(m) hereof.
"Registrable Securities" shall mean the Series A Securities and, if issued,
the Private Exchange Securities; provided, however, that Series A Securities or
Private Exchange Securities, as the case may be, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such Series A
Securities or Private Exchange Securities for the exchange or resale thereof,
as the case may be, shall have been declared effective under the Securities Act
and such Series A Securities or Private Exchange Securities, as the case may
be, shall have been disposed of pursuant to such Registration Statement, (ii)
such Series A Securities or Private Exchange Securities, as the case may be,
shall have been sold to the public pursuant to Rule 144 (or any similar
provision then in force, but not Rule 144A) under the Securities Act, (iii)
such Series A Securities or Private Exchange Securities, as the case may be,
shall have ceased to be outstanding or (iv) with respect to the Series A
Securities, such Series A Securities have been exchanged for Exchange
Securities upon consummation of the Exchange Offer and are thereafter freely
tradeable by the holder thereof (other than an affiliate of the Company).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, including, if applicable, the
fees and expenses of any "qualified independent underwriter" (and its counsel)
that is required to be retained by any Holder of Registrable Securities in
accordance with the rules and regulations of the NASD, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue
sky laws (including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities) and compliance with the rules of
the NASD, (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus and any amendments or supplements thereto, and in
preparing or assisting in preparing, printing and distributing any underwriting
agreements, securities sales agreements and other documents relating to the
performance of and compliance with this Agreement, (iv) all rating agency fees,
(v) the fees and disbursements of counsel for the Company and of the
independent certified public accountants of the Company, including the expenses
of any "cold comfort" letters required by or incident to such performance and
compliance, (vi) the fees and expenses of the Trustee, and any exchange agent
or custodian, (vii) all fees and expenses incurred in connection with the
listing, if any, of any of the Registrable Securities on any securities
exchange or exchanges, and (viii) the reasonable fees and expenses of any
special experts retained by the company in connection with any Registration
Statement.
"Registration Statement" shall mean any registration statement of the
Company and the Trust which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, and all
amendments and supplements to any such Registration Statement, including post
- -effective amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference therein,
provided that for purposes of this Agreement, any reference in this Agreement
to the obligation of the Company to use its best efforts to have a Registration
Statement (whether an Exchange Offer Registration Statement or a Shelf
Registration Statement) become or be declared effective or remain effective
shall refer only to the registration statement forming a part of such
Registration Statement.
"Rule 144(k) Period" shall mean the period of three years (or such shorter
period as may hereafter be referred to in Rule 144(k) under the Securities Act
(or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Series A Securities" shall have the meaning set forth in the preamble
to this Agreement.
"Series A Capital Securities" shall have the meaning set forth in the
preamble to this Agreement.
"Series A Capital Securities Guarantee" shall have the meaning set forth
in the preamble to this Agreement.
"Series A Subordinated Debentures" shall have the meaning set forth in
the preamble to this Agreement.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in Section
2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration statement
of the Company and the Trust pursuant to the provisions of Section 2(b) hereof
which covers all of the Registrable Securities or all of the Private Exchange
Securities, as the case may be, on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"TIA" shall have the meaning set forth in Section 3(k) hereof.
"Trustees" shall mean any and all trustees with respect to (i) the Series
A Capital Securities under the Declaration, (ii) the Series A Subordinated
Debentures under the Indenture and (iii) the Series A Capital Securities
Guarantee.
2. Registration Under the Securities Act.
______________________________________
(a) Exchange Offer. Subject to Section 2(b) below, to the extent
not prohibited by any applicable law or applicable interpretation of the staff
of the SEC, the Company and the Trust shall, for the benefit of the Holders, at
the Company's cost, use their best efforts to (i) cause to be filed with the
SEC within 150 days after the Issue Date an Exchange Offer Registration
Statement on an appropriate form under the Securities Act covering the Exchange
Offer, (ii) cause such Exchange Offer Registration Statement to be declared
effective under the Securities Act by the SEC not later than the date which is
180 days after the Issue Date, and (iii) keep such Exchange Offer Registration
Statement effective for not less than 30 calendar days (or longer if required by
applicable law) after the date notice of the Exchange Offer is mailed to the
Holders. Upon the effectiveness of the Exchange Offer Registration Statement,
the Company and the Trust shall promptly commence the Exchange Offer, it being
the objective of such Exchange Offer to enable each Holder eligible and
electing to exchange Registrable Securities for a like principal amount of
Exchange Debentures or a like liquidation amount of Exchange Capital
Securities, together with the Exchange Guarantee, as applicable (assuming that
such Holder is not an affiliate of the Company within the meaning of Rule 405
under the Securities Act and is not a broker-dealer tendering Registrable
Securities acquired directly from the Company for its own account, acquires
the Exchange Securities in the ordinary course of such Holder's business and
has no arrangements or understandings with any Person to participate in the
Exchange Offer for the purpose of distributing the Exchange Securities) to
transfer such Exchange Securities from and after their receipt without any
limitations or restrictions under the Securities Act and under state
securities or blue sky laws.
In connection with the Exchange Offer, the Company and the Trust shall:
(i) mail to each Holder a copy of the Prospectus forming part of
the Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of
not less than 30 days after the date notice thereof is mailed to the Holders
(or longer if required by applicable law) (such period referred to herein as
the "Exchange Period");
(iii) utilize the services of the Depositary for the Exchange
Offer;
(iv) permit Holders to withdraw tendered Series A Securities at any
time prior to the close of business, New York time, on the last Business Day of
the Exchange Period, by sending to the institution specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of
such Holder, the principal amount or liquidation amount, as the case may be, of
Series A Securities delivered for exchange, and a statement that such Holder
is withdrawing its election to have such Series A Securities exchanged;
(v) notify each Holder, in such letter of transmittal or otherwise,
that any Series A Security not tendered by such Holder in the Exchange Offer
will remain outstanding and continue to accrue interest or accumulate
distributions, as the case may be, but will not retain any rights under this
Agreement (except in the case of the Initial Purchaser and Participating
Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
If the Initial Purchaser determines upon advice of its outside
counsel that it is not eligible to participate in the Exchange Offer with
respect to the exchange of Series A Securities constituting any portion of an
unsold allotment in the initial distribution, as soon as practicable upon
receipt by the Company and the Trust of a written request from the Initial
Purchaser, and subject to any restrictions or requirements imposed on such
exchange by law, the Company and the Trust, as applicable, shall issue and
deliver to the Initial Purchaser in exchange (the "Private Exchange") for the
Series A Securities held by the Initial Purchaser, a like liquidation amount
of Capital Securities of the Trust, together with the Exchange Guarantee
("Private Exchange Capital Securities"), or a like principal amount of the
Series A Subordinated Debentures of the Company ("Private Exchange
Debentures"), as applicable, that are identical (except that such securities
may bear a customary legend with respect to restrictions on transfer pursuant
to the Securities Act) to the Exchange Securities (the Private Exchange Capital
Securities and the Private Exchange Debentures are hereinafter referred to
collectively as the "Private Exchange Securities") and which are issued
pursuant to the Indenture, the Declaration or the Exchange Guarantee (which
provides that the Exchange Securities will not be subject to the transfer
restrictions set forth in the Indenture or the Declaration, as applicable, and
that the Exchange Securities, the Private Exchange Securities and the Series A
Securities will vote and consent together on all matters as one class and that
neither the Exchange Securities, the Private Exchange Securities nor the Series
A Securities will have the right to vote or consent as a separate class on any
matter). The Private Exchange Securities shall be of the same series as the
Exchange Securities and the Company and the Trust will seek to cause the CUSIP
Service Bureau to issue the same CUSIP Numbers for the Private Exchange
Securities as for the Exchange Securities issued pursuant to the Exchange
Offer. In the event the Initial Purchaser shall make a request for a Private
Exchange, it shall use its best efforts to assist the Company in completing
such Private Exchange.
As soon as practicable after the close of the Exchange Offer and,
if applicable, the Private Exchange, the Company and the Trust, as the case
may be, shall:
(i) accept for exchange all Series A Securities or portions
thereof tendered and not validly withdrawn pursuant to the Exchange Offer or
the Private Exchange;
(ii) deliver, or cause to be delivered, to the applicable Trustee
for cancellation all Series A Securities or portions thereof so accepted for
exchange by the Company and the Trust; and
(iii) issue, and cause the applicable Trustee under the Indenture,
the Declaration or the Exchange Guarantee, as applicable, to promptly
authenticate and deliver to each Holder, new Exchange Securities or Private
Exchange Securities, as applicable, equal in principal amount to the principal
amount of the Series A Subordinated Debentures or equal in liquidation amount
to the liquidation amount to the Series A Capital Securities (together with the
guarantee thereof) as are surrendered by such Holder.
Distributions on each Exchange Capital Security and Private Exchange
Security and interest on each Exchange Debenture and Private Exchange Debenture
issued pursuant to the Registered Exchange Offer and in the Private Exchange
will accrue from the last date on which a Distribution or interest was paid on
the Series A Capital Security or the Series A Subordinated Debenture surrendered
in exchange therefore or, if no Distribution or interest has been paid on such
Series A Capital Security or Series A Subordinated Debenture, from the Issue
Date. To the extent not prohibited by any law or applicable interpretation of
the staff of the SEC, the Company and the Trust shall use their best efforts to
complete the Exchange Offer as provided above, and shall comply with the
applicable requirements of the Securities Act, the Exchange Act and other
applicable laws in connection with the Exchange Offer. The Exchange Offer shall
not be subject to any conditions, other than that the Exchange Offer does not
violate applicable law or any applicable interpretation of the staff of the
SEC. Each Holder of Registrable Securities who wishes to exchange such
Registrable Securities for Exchange Securities in the Exchange Offer will be
required to make certain customary representations in connection therewith,
including, in the case of any Holder of Series A Capital Securities and/or
Series A Subordinated Debentures, representations that (i) it is not an
affiliate of the Trust or the Company, (ii) the Exchange Securities to be
received by it were acquired in the ordinary course of its business and (iii)
at the time of the Exchange Offer, it has no arrangement with any person to
participate in the distribution (within the meaning of the Securities Act) of
the Exchange Capital Securities. The Company and the Trust shall inform the
Initial Purchaser, after consultation with the Trustee, of the names and
addresses of the Holders to whom the Exchange Offer is made, and the Initial
Purchaser shall have the right to contact such Holders and otherwise facilitate
the tender of Registrable Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply, mutatis
mutandis, solely with respect to Registrable Securities that are Private
Exchange Securities and Exchange Securities held by Participating
Broker-Dealers, and the Company and the Trust shall have no further obligation
to register the Registrable Securities (other than Private Exchange Securities)
pursuant to Section 2(b) of this Agreement.
(b) Shelf Registration. In the event that (i) the Company, the Trust or
the Majority Holders reasonably determine, after conferring with counsel (which
may be in-house counsel), that the Exchange Offer Registration provided in
Section 2(a) above is not available because of any change in law or in
currently prevailing interpretations of the staff of the SEC, (ii) the Exchange
Offer Registration Statement is not declared effective within 180 days of the
Issue Date, (iii) upon the request of the Initial Purchaser with respect to any
Registrable Securities held by it, if the Initial Purchaser is not permitted,
in the reasonable opinion of counsel (which may be in-house counsel), pursuant
to applicable law or applicable interpretations of the staff of the SEC, to
participate in the Exchange Offer and thereby receive securities that are freely
tradeable without restriction under the Securities Act and applicable blue sky
or state securities laws, (iv) upon the occurrence of a Tax Event (as defined
in the Indenture) in respect of the issuance of the Exchange Securities or
(v) upon the request of the Company or the Trust in the event of any reasonable
uncertainty as determined by the Company or the Trust regarding the
non-applicability to the Exchange Securities of the Proposed Legislation or any
similar legislation or regulation (any of the events specified in (i) - (v)
being a "Shelf Registration Event" and the date of occurrence thereof, the
"Shelf Registration Event Date"), the Company and the Trust shall, at their
cost, use their best efforts to cause to be filed, in the case of a Shelf
Registration Event pursuant to (ii) above, as promptly as practicable after
such Shelf Registration Event Date, and, in all other cases, within 150 days
of the Issue Date, a Shelf Registration Statement providing for the sale by
the Holders of all of the Registrable Securities, and shall use its best
efforts to have such Shelf Registration Statement declared effective by the
SEC as soon as practicable in the case of a Shelf Registration Event pursuant
to (ii) above and , in all other cases, within 180 days of the Issue Date. No
Holder of Registrable Securities shall be entitled to include any of its
Registrable Securities in any Shelf Registration pursuant to this Agreement
unless and until such Holder agrees in writing to be bound by all of the
provisions of this Agreement applicable to such Holder and furnishes to the
Company and the Trust in writing, within 15 days after receipt of a request
therefor, such information as the Company and the Trust may, after conferring
with counsel with regard to information relating to Holders that would be
required by the SEC to be included in such Shelf Registration Statement or
Prospectus included therein, reasonably request for inclusion in any Shelf
Registration Statement or Prospectus included therein. Each Holder as to which
any Shelf Registration is being effected agrees to furnish to the Company and
the Trust all information with respect to such Holder necessary to make the
information previously furnished to the Company by such Holder not materially
misleading.
The Company and the Trust agree to use their best efforts, subject
to Section 3(i) and the last paragraph of Section 3, to keep the Shelf
Registration Statement continuously effective for the Rule 144(k) Period
(subject to extension pursuant to the last paragraph of Section 3 hereof) or
for such shorter period which will terminate when all of the Registrable
Securities covered by the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement or cease to be outstanding (the
"Effectiveness Period"). The Company and the Trust shall not permit any
securities other than Registrable Securities to be included in the Shelf
Registration. The Company and the Trust will, in the event a Shelf Registration
Statement is declared effective, provide to each Holder a reasonable number of
copies of the Prospectus which is part of the Shelf Registration Statement,
notify each such Holder when the Shelf Registration has become effective and use
its best efforts to take all other actions required to permit resales of the
Registrable Securities. The Company and the Trust further agree, if necessary,
to supplement or amend the Shelf Registration Statement, if required by the
rules, regulations or instructions applicable to the registration form used by
the Company for such Shelf Registration Statement or by the Securities Act or by
any other rules and regulations thereunder for shelf registrations, and the
Company and the Trust agree to furnish to the Holders of Registrable Securities
copies of any such supplement or amendment promptly after its being used or
filed with the SEC.
(c) Expenses. The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) or 2(b) hereof and
will reimburse the Initial Purchaser for the reasonable fees and disbursements
of LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the Initial Purchaser,
incurred in connection with the Exchange Offer and, if applicable, the Private
Exchange Offer, and either LeBoeuf, Lamb, Greene & MacRae, L.L.P., or any one
other counsel designated in writing by the Majority Holders to act as counsel
for the Holders of the Registrable Securities in connection with a Shelf
Registration Statement, which other counsel shall be reasonably satisfactory to
the Company. Except as provided herein, each Holder shall pay all expenses of
its counsel, underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. An Exchange Offer Registration
Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement
pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC; provided, however, that if,
after such registration statement has been declared effective, the offering
of Registrable Securities pursuant to a Shelf Registration Statement is
interfered with by any stop order, injunction or other order or request of
the SEC or any other governmental agency or court relating to the effectiveness
of such registration statement, such registration statement will be deemed not
to have been effective during the period of such interference, until the
offering of Registrable Securities pursuant to such Registration Statement may
legally resume. The Company and the Trust will be deemed not to have used their
best efforts to cause the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, to become, or to remain, effective
during the requisite period if either of them voluntarily takes any action which
is not in compliance with the terms of Section 2(b), Sections 3(i) or 3(s), and
that would result in any such Registration Statement not being declared
effective or in the Holders of Registrable Securities covered thereby not being
able to exchange or offer and sell such Registrable Securities during that
period unless such action is required by applicable law.
(e) Liquidated Damages. In the event that (A) neither the Exchange
Offer Registration Statement nor a Shelf Registration Statement is filed with
the SEC on or prior to the 150th day after the Issue Date or (B) notwithstanding
that the Company and the Trust have consummated or will consummate an Exchange
Offer, the Company and the Trust are required to file a Shelf Registration
Statement and such Shelf Registration Statement is not filed on or prior to the
date required by Section 2(b) hereof, then commencing on the day after the
applicable required filing date, additional interest shall accrue on the
principal amount of the Series A Subordinated Debentures, and additional
Distributions shall accumulate on the liquidation amount of the Series A Capital
Securities, each at a rate of 0.25% per annum; or
(ii) (A) neither the Exchange Offer Registration Statement nor a
Shelf Registration Statement is declared effective by the SEC on or prior to
the date required by Section 2(a), in the case of an Exchange Offer
Registration Statement, or Section 2(b), in the case of a Shelf Registration
Statement or (B) notwithstanding that the Company and the Trust have consummated
an Exchange Offer, the Company and the Trust are required to file a Shelf
Registration Statement and such Shelf Registration Statement is not declared
effective by the SEC on or prior to the date required by Section 2(b), then,
commencing on the 31st day after the applicable required filing date, additional
interest shall accrue on the principal amount of the Series A Subordinated
Debentures, and additional distributions shall accumulate on the liquidation
amount of the Series A Capital Securities, each at a rate of 0.25% per annum; or
(iii) either (A) the Trust has not exchanged Exchange Capital
Securities for all Series A Capital Securities or the Company has not exchanged
Exchange Guarantees or Exchange Debentures for all Series A Capital Securities
Guarantees or Series A Subordinated Debentures validly tendered, in accordance
with the terms of the Exchange Offer on or prior to the 45th day after the date
on which the Exchange Offer Registration Statement was declared effective or
(B) if applicable, the Shelf Registration Statement has been declared effective
and such Shelf Registration Statement ceases to be effective at any time prior
to expiration of the 144(k) Period (other than after such time as all Series A
Capital Securities have been disposed of thereunder or otherwise cease to be
Registrable Securities within the meaning of this Agreement), then additional
interest shall accrue on the principal amount of Series A Subordinated
Debentures, and additional distributions shall accumulate on the liquidation
amount of the Series A Capital Securities, each at a rate of 0.25% per annum
commencing on (x) the 46th day after such effective date, in the case of
(A) above, or (y) the day such Shelf Registration Statement ceases to be
effective in the case of (B) above; provided, that if, in the case of (B) above,
such Shelf Registration Statement ceases to be effective as a result of a
Material Event, neither such additional distributions shall accumulate nor such
additional interest shall accrue so long as such Shelf Registration Statement
again becomes effective within 60 days of the date notice of such Material
Event was received by holders of Series A Capital Securities, Series A Capital
Securities Guarantees and Series A Subordinated Debentures; and provided
further, that if such Shelf Registration Statement does not again become
effective within such 60-day period, additional interest shall accrue and
additional distributions shall accumulate, each at a rate of 0.25% per annum,
commencing on the 61st day after such Shelf Registration Statement ceases to
be effective.
Notwithstanding the foregoing, neither the additional interest rate on the
Series A Subordinated Debentures, nor the additional distributions rate on
the Liquidation Amount of the Series A Capital Securities may exceed 0.25%
per annum, provided, that (1) upon the filing of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (i) above),
(2) upon the effectiveness of the Exchange Offer Registration Statement or a
Shelf Registration Statement (in the case of clause (ii) above), or (3) upon the
exchange of Exchange Capital Securities, Exchange Guarantees and Exchange
Debentures for all Series A Capital Securities, Series A Capital Securities
Guarantees and Series A Subordinated Debentures tendered (in the case of clause
(iii)(A) above), or, upon the effectiveness of the Shelf Registration Statement
which had ceased to remain effective (in the case of clause (iii)(B) above),
additional interest on the Series A Subordinated Debentures, and additional
distributions on the liquidation amount of the Series A Capital Securities as
a result of such clause (or the relevant subclause thereof), as the case may
be, shall cease to accrue or accumulate, as the case may be.
Any amounts of additional interest and additional Distributions due
pursuant to Section 2(e)(i), (ii) or (iii) above ("Liquidated Damages") will
be payable in cash on the next succeeding March 15 or September 15, as the case
may be, to holders on the relevant record dates for the payment of interest and
Distributions pursuant to the Indenture and the Declaration, respectively.
(f) Specific Enforcement. Without limiting the remedies available to
the Holders, the Company and the Trust acknowledge that any failure by the
Company or the Trust to comply with its obligations under Section 2(a) and
Section 2(b) hereof may result in material irreparable injury to the Holders
for which there is no adequate remedy at law, that it would not be possible
to measure damages for such injuries precisely and that, in the event of any
such failure, any Holder may obtain such relief as may be required to
specifically enforce the Company's and the Trust's obligations under Section
2(a) and Section 2(b) hereof.
3. Registration Procedures. In connection with the obligations of the
Company and the Trust with respect to the Registration Statements pursuant to
Sections 2(a) and 2(b) hereof, the Company and the Trust shall use their best
efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof within
the relevant time period specified in Section 2 hereof on the appropriate form
under the Securities Act, which form (i) shall be selected by the Company and
the Trust, (ii) shall, in the case of a Shelf Registration, be available for
the sale of the Registrable Securities by the selling Holders thereof and (iii)
shall comply as to form in all material respects with the requirements of the
applicable form and include (or incorporate by reference) all financial
statements required by the SEC to be included therein; and use its best efforts
to cause such Registration Statement to become effective and remain effective
in accordance with Section 2 hereof; provided, however, that if (1) such filing
is pursuant to Section 2(b), or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2(a) is required to be
delivered under the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Securities, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Company and the Trust
shall furnish to and afford the Holders of the Registrable Securities and each
such Participating Broker-Dealer, as the case may be, covered by such
Registration Statement, their counsel and the managing underwriters, if any, a
reasonable opportunity to review copies of all such documents (including copies
of any documents to be incorporated by reference therein and all exhibits
thereto) proposed to be filed. The Company and the Trust shall not file any
Registration Statement or Prospectus or any amendments or supplements thereto
in respect of which the Holders must be afforded an opportunity to review prior
to the filing of such document if the Majority Holders or such Participating
Broker-Dealer, as the case may be, their counsel or the managing underwriters,
if any, shall reasonably object;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the Effectiveness Period or the Applicable
Period, as the case may be; and cause each Prospectus to be supplemented, if so
determined by the Company or the Trust or requested by the SEC, by any required
prospectus supplement and as so supplemented to be filed pursuant to Rule 424
(or any similar provision then in force) under the Securities Act, and comply
with the provisions of the Securities Act, the Exchange Act and the rules and
regulations promulgated thereunder applicable to it with respect to the
disposition of all securities covered by each Registration Statement during the
Effectiveness Period or the Applicable Period, as the case may be, in
accordance with the intended method or methods of distribution by the selling
Holders thereof described in this Agreement (including sales by any
Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities included in the Shelf Registration Statement, at least
three Business Days prior to filing, that a Shelf Registration Statement with
respect to the Registrable Securities is being filed and advising such Holder
that the distribution of Registrable Securities will be made in accordance
with the method selected by the Majority Holders; and (ii) furnish to each
Holder of Registrable Securities included in the Shelf Registration Statement
and to each underwriter of an underwritten offering of Registrable Securities,
if any, without charge, as many copies of each Prospectus, including each
Preliminary Prospectus, and any amendment or supplement thereto and such other
documents as such Holder or underwriter may reasonably request, in order to
facilitate the public sale or other disposition of the Registrable Securities;
and (iii) consent to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of Registrable Securities included in
the Shelf Registration Statement in connection with the offering and sale of
the Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;
(d) in the case of a Shelf Registration, use its best efforts to
register or qualify the Registrable Securities under all applicable state
securities or "blue sky" laws of such jurisdictions by the time the applicable
Registration Statement is declared effective by the SEC as any Holder of
Registrable Securities covered by a Registration Statement and each underwriter
of an underwritten offering of Registrable Securities shall reasonably request
in writing in advance of such date of effectiveness, and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
Holder and underwriter to consummate the disposition in each such jurisdiction
of such Registrable Securities owned by such Holder; provided, however, that
the Company and the Trust shall not be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (ii) file any
general consent to service of process in any jurisdiction where it would not
otherwise be subject to such service of process or (iii) subject itself to
taxation in any such jurisdiction if it is not then so subject;
(e) in the case of (i) a Shelf Registration or (ii) Participating
Broker-Dealers from whom the Company or the Trust has received prior written
notice that they will be utilizing the Prospectus contained in the Exchange
Offer Registration Statement as provided in Section 3(s) hereof, are seeking
to sell Exchange Securities and are required to deliver Prospectuses, notify
each Holder of Registrable Securities, or such Participating Broker-Dealers,
as the case may be, their counsel and the managing underwriters, if any, and
promptly confirm such notice in writing (i) when a Registration Statement has
become effective and when any post-effective amendments and supplements thereto
become effective, (ii) of any request by the SEC or any state securities
authority for amendments and supplements to a Registration Statement or
Prospectus or for additional information after the Registration Statement has
become effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a Registration
Statement or the qualification of the Registrable Securities or the Exchange
Securities to be offered or sold by any Participating Broker-Dealer in any
jurisdiction described in paragraph 3(d) hereof or the initiation of any
proceedings for that purpose, and (iv) of the happening of any event or the
failure of any event to occur or the discovery of any facts or otherwise (each
a "Material Event"), during the Effectiveness Period which makes any statement
made in such Registration Statement or the related Prospectus untrue in any
material respect or which causes such Registration Statement or Prospectus to
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and
(v) of the Company and the Trust's reasonable determination that a
post-effective amendment to the Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the earliest
possible moment;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities included within the coverage of such Shelf Registration
Statement, without charge, at least one conformed copy of each Registration
Statement relating to such Shelf Registration and any post-effective amendment
thereto (without documents incorporated therein by reference or exhibits
thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends and in such denominations (consistent with
the provisions of the Indenture and the Declaration) and registered in such
names as the selling Holders or the underwriters may reasonably request at
least two Business Days prior to the closing of any sale of Registrable
Securities pursuant to such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by Section
3(e)(ii), 3(e)(iii), 3(e)(iv) or 3(e)(v) hereof, use its best efforts,
following the resolution or satisfaction of any Material Event, to prepare a
supplement or post-effective amendment to a Registration Statement or the
related Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Securities, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; and to notify each Holder to suspend use of the
Prospectus as promptly as practicable after the occurrence of such an event,
and each Holder hereby agrees to suspend use of the Prospectus until the
Company has amended or supplemented the Prospectus to correct such misstatement
or omission;
(j) obtain a CUSIP number for all Exchange Capital Securities and
the Series A Capital Securities (and if the Trust has made a distribution of the
Series A Subordinated Debentures to the Holders of the Series A Capital
Securities, the Series A Subordinated Debentures or the Exchange Debentures)
as the case may be, not later than the effective date of a Registration
Statement, and provide the Trustee with printed certificates for the Exchange
Securities or the Registrable Securities, as the case may be, in a form
eligible for deposit with the Depositary;
(k) cause the Indenture, the Declaration, the Series A Capital
Securities Guarantee and the Exchange Guarantee to be qualified under the
Trust Indenture Act of 1939 (the "TIA"), in connection with the registration
of the Exchange Securities or Registrable Securities, as the case may be, and
effect such changes to such documents as may be required for them to be so
qualified in accordance with the terms of the TIA and execute, and use its
best efforts to cause the relevant trustee to execute, all documents as may
be required to affect such changes, and all other forms and documents required
to be filed with the SEC to enable such documents to be so qualified in a
timely manner;
(l) in the case of a Shelf Registration, enter into such agreements
(including underwriting agreements) as are customary in underwritten offerings
and take all such other appropriate actions as are reasonably requested in
order to expedite or facilitate the registration or the disposition of such
Registrable Securities, and in such connection, whether or not an underwriting
agreement is entered into and whether or not the registration is an
underwritten registration, if requested by (x) the Initial Purchaser, in the
case where the Initial Purchaser holds Series A Securities acquired by it as
part of its initial distribution and (y) other Holders of Series A Securities
covered thereby: (i) make such representations and warranties to Holders of
such Registrable Securities and the underwriters (if any), with respect to the
business of the Trust, the Company and its subsidiaries as then conducted and
the Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten offerings, and
confirm the same if and when requested; (ii) obtain opinions of counsel to
the Company and the Trust and updates thereof (which may be in the form of a
reliance letter) in form and substance reasonably satisfactory to the managing
underwriters (if any) and the Holders of a majority in principal amount of
the Registrable Securities being sold, addressed to each selling Holder and
the underwriters (if any) covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by such underwriters (it being agreed that the matters to be covered
by such opinion may be subject to customary qualifications and exceptions);
(iii) obtain "cold comfort" letters and updates thereof in form and substance
reasonably satisfactory to the managing underwriters from the independent
certified public accountants of the Company and the Trust (and, if necessary,
any other independent certified public accountants of any subsidiary of the
Company and the Trust or of any business acquired by the Company and the Trust
for which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each of the underwriters,
such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with underwritten
offerings and such other matters as reasonably requested by such underwriters
in accordance with, and subject to, Statement on Auditing Standards No. 72; and
(iv) if an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those set
forth in Section 4 hereof with respect to all parties to be indemnified
pursuant to said Section (including, without limitation, such underwriters
and selling Holders). The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder;
(m) if (1) a Shelf Registration is filed pursuant to Section 2(b)
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2(a) is required to be delivered under the Securities Act
by any Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period, make reasonably available for inspection by any selling
Holder of such Registrable Securities being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any such
disposition of Registrable Securities, if any, and any attorney, accountant or
other agent retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable business
hours, all financial and other records, pertinent corporate documents and
properties of the Trust, the Company and its subsidiaries (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors
and employees of the Trust, the Company and its subsidiaries to supply all
relevant information in each case reasonably requested by any such Inspector in
connection with such Registration Statement provided, however, that the
foregoing inspection and information gathering shall be coordinated on behalf
of the Holders by the Initial Purchaser and on behalf of the other parties, by
one counsel designated by the Initial Purchaser and on behalf of such other
parties as described in Section 2(c) hereof. Records which the Company and the
Trust determine, in good faith, to be confidential and any records which it
notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of such Records is necessary to avoid or
correct a material misstatement or omission in such Registration Statement,
(ii) the release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction or is necessary in connection
with any action, suit or proceeding or (iii) the information in such Records
has been made generally available to the public. Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will be
required as a condition to the receipt of such information to agree in writing
that information obtained by it as a result of such inspections shall be kept
confidential by the recipient thereof and shall be deemed confidential and
shall not be used by it as the basis for any market transactions in the
securities of the Trust or the Company unless and until such is made generally
available to the public. Each selling Holder of such Registrable Securities
and each such Participating Broker-Dealer will be required to further agree in
writing that it will, upon learning that disclosure of such Records is sought
in a court of competent jurisdiction, give notice to the Company and allow the
Company at its expense to undertake appropriate action to prevent disclosure of
the Records deemed confidential;
(n) comply with all applicable rules and regulations of the SEC so
long as any provision of this Agreement shall be applicable and make generally
available to its securityholders earning statements satisfying the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar
rule promulgated under the Securities Act) no later than 45 days after the end
of any 12-month period (or 90 days after the end of any 12-month period if such
period is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm commitment or
best efforts underwritten offering and (ii) if not sold to underwriters in such
an offering, commencing on the first day of the first fiscal quarter of the
Company after the effective date of a Registration Statement, which statements
shall cover said 12-month periods;
(o) upon consummation of an Exchange Offer or a Private Exchange, if
requested by a Trustee, obtain an opinion of counsel to the Company addressed
to the Trustee for the benefit of all Holders of Registrable Securities
participating in the Exchange Offer or the Private Exchange, as the case may
be, and which includes an opinion that (i) the Company and the Trust, as the
case requires, has duly authorized, executed and delivered the Exchange
Securities and Private Exchange Securities, and (ii) each of the Exchange
Securities or the Private Exchange Securities, as the case may be, constitute
a legal, valid and binding obligation of the Company or the Trust, as the case
requires, enforceable against the Company or the Trust, as the case requires,
in accordance with its respective terms (in each case, with customary
exceptions);
(p) if an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Securities by Holders to the Company or the
Trust, as applicable (or to such other Person as directed by the Company or
the Trust, respectively), in exchange for the Exchange Securities or the
Private Exchange Securities, as the case may be, the Company or the Trust, as
applicable, shall mark, or cause to be marked, on such Registrable Securities
delivered by such Holders that such Registrable Securities are being cancelled
in exchange for the Exchange Securities or the Private Exchange Securities, as
the case may be; in no event shall such Registrable Securities be marked as
paid or otherwise satisfied;
(q) cooperate with each seller of Registrable Securities covered by
any Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the NASD;
(r) use its best efforts to take all other steps necessary to effect
the registration of the Registrable Securities covered by a Registration
Statement contemplated hereby;
(s) (A) in the case of the Exchange Offer Registration Statement (i)
include in the Exchange Offer Registration Statement a section entitled "Plan
of Distribution," which section shall be reasonably acceptable to the Initial
Purchaser or another representative of the Participating Broker-Dealers, and
which shall contain a summary statement of the positions taken or policies made
by the staff of the SEC with respect to the potential "underwriter" status of
any broker-dealer (a "Participating Broker-Dealer") that holds Registrable
Securities acquired for its own account as a result of market-making activities
or other trading activities and that will be the beneficial owner (as defined
in Rule 13d-3 under the Exchange Act) of Exchange Securities to be received by
such broker-dealer in the Exchange Offer, whether such positions or policies
have been publicly disseminated by the staff of the SEC or such positions or
policies, in the reasonable judgment of the Initial Purchaser or such other
representative, represent the prevailing views of the staff of the SEC,
including a statement that any such broker-dealer who receives Exchange
Securities for Registrable Securities pursuant to the Exchange Offer may be
deemed a statutory underwriter and must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Securities, (ii) furnish to each Participating Broker-Dealer who has
delivered to the Company the notice referred to in Section 3(e), without charge,
as many copies of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary prospectus, and any amendment or supplement
thereto, as such Participating Broker-Dealer may reasonably request (each of the
Company and the Trust hereby consents to the use of the Prospectus forming part
of the Exchange Offer Registration Statement or any amendment or supplement
thereto by any Person subject to the prospectus delivery requirements of the
Securities Act, including all participating Broker-Dealers, in connection with
the sale or transfer of the Exchange Securities covered by the Prospectus or any
amendment or supplement thereto), (iii) use its best efforts to keep the
Exchange Offer Registration Statement effective and to amend and supplement the
Prospectus contained therein in order to permit such Prospectus to be lawfully
delivered by all Persons subject to the prospectus delivery requirements of the
Securities Act for such period of time as such Persons must comply with such
requirements under the Securities Act and applicable rules and regulations in
order to resell the Exchange Securities; provided, however, that such period
shall not be required to exceed 90 days (or such longer period if extended
pursuant to the last sentence of Section 3 hereof) (the "Applicable Period"),
and (iv) include in the transmittal letter or similar documentation to be
executed by an exchange offeree in order to participate in the Exchange Offer
(x) the following provision:
"If the exchange offeree is a broker-dealer holding Registrable
Securities acquired for its own account as a result of market-making
activities or other trading activities, it will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of Exchange
Securities received in respect of such Registrable Securities pursuant to the
Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making
the acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer
will not be deemed to admit that it is an underwriter within the meaning of
the Securities Act; and
(B) in the case of any Exchange Offer Registration Statement, the
Company and the Trust agree to deliver to the Initial Purchaser or to another
representative of the Participating Broker-Dealers, if requested by the Initial
Purchaser or such other representative of the Participating Broker-Dealers, on
behalf of the Participating Broker-Dealers upon consummation of the Exchange
Offer (i) an opinion of counsel in form and substance reasonably satisfactory
to the Initial Purchaser or such other representative of the Participating
Broker-Dealers, covering the matters customarily covered in opinions requested
in connection with Exchange Offer Registration Statements and such other matters
as may be reasonably requested (it being agreed that the matters to be covered
by such opinion may be subject to customary qualifications and exceptions),
(ii) an officers' certificate containing certifications substantially similar to
those set forth in section 5(b) of the Purchase Agreement and such additional
certifications as are customarily delivered in a public offering of debt
securities and (iii) as well as upon the effectiveness of the Exchange Offer
Registration Statement, a comfort letter, in each case, in customary form if
permitted by Statement on Auditing Standards No. 72 or 76.
The Company or the Trust may require each seller of Registrable
Securities as to which any registration is being effected to furnish to the
company or the Trust, as applicable, such information regarding such seller
as may be required by the securities laws or regulations to be included in a
Registration Statement. The Company or the Trust may exclude from such
registration the Registrable Securities of any seller who unreasonably fails
to furnish such information within a reasonable time after receiving such
request. The Company shall have no obligation to register under the Securities
Act the Registrable Securities of a seller who so fails to furnish such
information and such seller shall not be entitled to receive Liquidated Damages
with respect to the Registrable Securities held by it.
In the case of (i) a Shelf Registration Statement or (ii)
Participating Broker-Dealers who have notified the Company and the Trust that
they will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(s) hereof, are seeking to sell
Exchange Securities and are required to deliver Prospectuses, each Holder
agrees that, upon receipt of any notice from the Company or the Trust of the
happening of any event of the kind described in Section 3(e)(ii), 3(e)(iii),
3(e)(iv) or 3(e)(v) hereof, such Holder will forthwith discontinue disposition
of Registrable Securities pursuant to a Registration Statement until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(i) hereof or until it is advised in writing (the
"Advice") by the Company and the Trust that the use of the applicable
Prospectus may be resumed, and, if so directed by the Company and the Trust,
such Holder will deliver to the Company or the Trust (at the Company's or the
Trust's expense, as the case requires) all copies in such Holder's possession,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Registrable Securities or Exchange Securities, as
the case may be, current at the time of receipt of such notice of suspension
or disposition. If the Company or the Trust shall give any such notice to
suspend the disposition of Registrable Securities or Exchange Securities, as
the case may be, pursuant to a Registration Statement, the Company and the
Trust shall use their best efforts to file and have declared effective (if an
amendment) as soon as practicable following the satisfaction or resolution of
the Material Event an amendment or supplement to the Registration Statement and
shall extend the period during which such Registration Statement shall be
maintained effective pursuant to this Agreement by the number of days in the
period from and including the date of the giving of such notice to and
including the date when the Company and the Trust shall have made available to
the Holders (x) copies of the supplemented or amended Prospectus necessary to
resume such dispositions or (y) the Advice.
4. Indemnification and Contribution. In connection with any
Registration Statement, the Company and the Trust agree to jointly and severally
indemnify and hold harmless the Initial Purchaser, each Holder, each underwriter
who participates in an offering of the Registrable Securities, each
Participating Broker-Dealer, each Person, if any, who controls any of such
parties within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, joint or several, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto), covering Registrable Securities or
Exchange Securities, including all documents incorporated therein by reference,
or the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a material
fact contained in any Prospectus (or any amendment or supplement thereto) or
the omission or alleged omission therefrom of a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, if such settlement
is effected with the prior written consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of counsel chosen by the Initial
Purchaser, such Holder, such Participating Broker-Dealer, or any underwriter
(except to the extent otherwise expressly provided in Section 4(c) hereof)),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any court or governmental
agency or body, commenced or threatened, or any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement
or omission, to the extent that any such expense is not paid under subparagraph
(i) or (ii) of this Section 4(b);
provided, however, that (i) this indemnity does not apply to any loss,
liability, claim, damage of expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished in writing to the
Company or the Trust by such Holder, Participating Broker-Dealer or any
underwriter with respect to such Holder, Participating Broker-Dealer or any
underwriter, as the case may be, expressly for use in the Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) and (ii) the Company and the Trust shall not be liable to any such
Holder, Participating Broker-Dealer, any underwriter or controlling person, with
respect to any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary Prospectus to the extent that any such loss,
liability claim, damage or expense of any Holder, Participating Broker-Dealer,
any underwriter or controlling person results from the fact that such Holder,
any underwriter or Participating Broker-Dealer sold Securities to a person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the final Prospectus as then amended or supplemented if the
Company had previously furnished copies thereof to such Holder, underwriter or
Participating Broker-Dealer and the loss, liability, claim, damage or expense
of such Holder, underwriter, Participating Broker-Dealer or controlling person
results from an untrue statement or omission of a material fact contained in the
preliminary Prospectus which was corrected in the final Prospectus. Any amounts
advanced by the Company or the Trust to an indemnified party pursuant to this
Section 4 as a result of such losses shall be returned to the Company or the
Trust if it shall be finally determined by such a court in a judgment not
subject to appeal or final review that such indemnified party was not entitled
to indemnification by the Company or the Trust.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Trust, any underwriter and the other selling
Holders and each of their respective directors, officers and trustees (including
each director, officer or trustee of the Company and the Trust who signed the
Registration Statement), employees and agents and each Person, if any, who
controls the Company, the Trust, any underwriter or any other selling Holder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all loss, liability, claim, damage and
expense whatsoever described in the indemnity contained in Section 4(a) hereof,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company or the Trust by such selling Holder with respect to such Holder
expressly for use in the Registration Statement (or any amendment thereto), or
any such Prospectus (or any amendment thereto); provided, however, that, in the
case of a Shelf Registration Statement, no such Holder shall be liable for any
claims hereunder in excess of the amount of net proceeds received by such Holder
from the sale of Registrable Securities pursuant to such Shelf Registration
Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers properly
served on such indemnified party, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it
may have under this Section 4, except to the extent that it is materially
prejudiced by such failure. An indemnifying party may participate at its own
expense in the defense of such action. If an indemnifying party elects within
a reasonable time after receipt of such notice, an indemnifying party, severally
or jointly with any other indemnifying parties receiving such notice, may
assume the defense of such action with counsel chosen by it and reasonably
acceptable to the indemnified parties defendant in such action, provided,
however, that if (i) representation of such indemnified party by the same
counsel would present a conflict of interest or (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and any such indemnified party reasonably
determines that there are likely to be legal defenses available to such
indemnified party which are inconsistent or in conflict with those available
to such indemnifying party, then in the case of clauses (i) and (ii) of this
Section 4(c) such indemnifying party and counsel for each indemnifying party
or parties shall not be entitled to assume such defense. If an indemnifying
party is not entitled to assume the defense of such action as a result of the
proviso to the preceding sentence, counsel for such indemnifying party and
counsel for each indemnified party or parties shall be entitled to conduct the
defense of such indemnified party or parties. If an indemnifying party assumes
the defense of such action, in accordance with and as permitted by the
provisions of this paragraph, such indemnifying party shall not be liable for
any fees and expenses of counsel for the indemnified parties incurred thereafter
in connection with such action. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one counsel (in addition to local
counsel), separate from its own counsel, for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 4 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional written release in form and substance satisfactory to
the indemnified parties of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Notwithstanding the last sentence of Section 4(c), if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of counsel
pursuant to Section 4(a)(iii) above, such indemnifying party agrees that it
shall be liable for any settlement effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall have received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement; provided that an indemnifying
party shall not be liable for any such settlement effected without its consent
if such indemnifying party (1) reimburses such indemnified party in accordance
with such request to the extent it considers reasonable and (2) provides written
notice to the indemnified party in form and substance reasonably acceptable to
the indemnified parties substantiating the unpaid balance as unreasonable, in
each case prior to the date of such settlement.
(e) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Trust, and
the Holders shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Company, the Trust and the Holders, as incurred; provided
that no Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any
Person that was not guilty of such fraudulent misrepresentation. As between
the Company, the Trust, and the Holders, such parties shall contribute to
such aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement in such proportion as shall be
appropriate to reflect the relative fault of the Company and Trust, on the one
hand, and the Holders, on the other hand, with respect to the statements or
omissions which resulted in such loss, liability, claim, damage or expense, or
action in respect hereof, as well as any other relevant equitable
considerations. The relative fault of the Company and the Trust, on the one
hand, and of the Holders, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Trust, on the one hand,
or by or on behalf of the Holders, on the other, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Trust and the Holders of the
Registrable Securities agree that it would not be just and equitable if
contribution pursuant to this Section 4 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the relevant equitable considerations. For purposes of this Section 4, each
affiliate of a Holder, and each director, officer, employee, agent and Person,
if any, who controls a Holder or such affiliate within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Holder, and each director of each of the Company
or the Trust, each officer of each of the Company or the Trust who signed the
Registration Statement, and each Person, if any, who controls each of the
Company or the Trust within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as
each of the Company or the Trust.
5. Participation in Underwritten Registrations. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all reasonable
questionnaires, lock-up letters and other documents reasonably required under
the terms of such underwriting arrangements. In the event a Holder fails to
provide information as required by (b) above, such Holder shall not be entitled
to receive Liquidated Damages with respect to the Registrable Securities held
by it.
6. Selection of Underwriters. The Holders of Registrable Securities
covered by the Shelf Registration Statement who desire to do so may sell the
securities covered by such Shelf Registration in an underwritten offering. In
any such underwritten offering, the underwriter or underwriters and manager
or managers that will administer the offering will be selected by the Holders
of a majority in aggregate principal amount of the Registrable Securities
included in such underwritten offering; provided, however, that such
underwriters and managers must be reasonably satisfactory to the Company and
the Trust.
7. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the Company or the Trust is
subject to the reporting requirements of Section 13 or 15 of the Exchange Act
and any Registrable Securities remain outstanding, the Company and the Trust,
as the case may be, will use their best efforts to file the reports required
to be filed by it under the Securities Act and Section 13(a) or 15(d) of the
Exchange Act and the rules and regulations adopted by the SEC thereunder, that
if it ceases to be so required to file such reports, it will, upon the request
of any Holder of Registrable Securities (a) make publicly available such
information as is necessary to permit sales of their Registrable Securities
pursuant to Rule 144 under the Securities Act, (b) deliver such information to
a prospective purchaser as is necessary to permit sales of their securities
pursuant to Rule 144A under the Securities Act and it will take such further
action as any Holder of Registrable Securities may reasonably request, and
(c) take such further action that is reasonable in the circumstances, in each
case, to the extent required from time to time to enable such Holder to sell
its Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (i) Rule 144 under the Securities
Act, as such rule may be amended from time to time, (ii) Rule 144A under the
Securities Act, as such rule may be amended from time to time, or (iii) any
similar rules or regulations hereafter adopted by the SEC. Upon the request of
any Holder of Registrable Securities, the Company and the Trust will deliver to
such Holder a written statement as to whether it has complied with such
requirements.
(b) No Inconsistent Agreements. The Company or the Trust has not
entered into nor will the Company or the Trust on or after the date of this
Agreement enter into any agreement which is inconsistent with the rights
granted to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with the rights granted to the holders of
the Company's or the Trust's other issued and outstanding securities under any
such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company and the Trust have obtained the written
consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or departure; provided no amendment, modification or
supplement or waiver or consent to the departure with respect to the provisions
of Section 4 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder of Registrable
Securities. Notwithstanding the foregoing sentence, (i) this Agreement may be
amended, without the consent of any Holder of Registrable Securities, by
written agreement signed by the Company, the Trust and the Initial Purchaser,
to cure any ambiguity, correct or supplement any provision of this Agreement
that may be inconsistent with any other provision of this Agreement or to make
any other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with other provisions of this
Agreement, (ii) this Agreement may be amended, modified or supplemented, and
waivers and consents to departures from the provisions hereof may be given, by
written agreement signed by the Company, the Trust and the Initial Purchaser to
the extent that any such amendment, modification, supplement, waiver or consent
is, in their reasonable judgment, necessary or appropriate to comply with
applicable law (including any interpretation of the Staff of the SEC) or any
change therein and (iii) to the extent any provision of this Agreement relates
to the Initial Purchaser, such provision may be amended, modified or
supplemented, and waivers or consents to departures from such provisions may be
given, by written agreement signed by the Initial Purchaser, the Company and the
Trust.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder
to the Company or the Trust by means of a notice given in accordance with the
provisions of this Section 7(d), which address initially is, with respect to
the Initial Purchaser, the address set forth in the Purchase Agreement; and
(ii) if to the Company or the Trust, initially at the Company's address set
forth in the Purchase Agreement and thereafter at such other address, notice
of which is given in accordance with the provisions of this Section 7(d).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Initial Purchaser, including, without limitation and without the need for an
express assignment, subsequent Holders; provided, however, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement or
the Indenture. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all
of the terms of this Agreement and such Person shall be entitled to receive
the benefits hereof.
(f) Third Party Beneficiary. The Initial Purchaser shall be a third
party beneficiary of the agreements made hereunder between the Company and
the Trust, on the one hand, and the Holders, on the other hand, and shall
have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights
of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE
IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF THE PARTIES
HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Securities Held by the Company, the Trust or its Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by
the Company, the Trust or its affiliates (as such term is defined in Rule 405
under the Securities Act) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
EQUITABLE OF IOWA COMPANIES
By: /s/ Paul E. Larson
_____________________________________
Name: Paul E. Larson
Title: Executive Vice President and
Chief Financial Officer
EQUITABLE OF IOWA COMPANIES CAPITAL TRUST II
By: /s/ Fred S. Hubbell
_____________________________________
Title: Administrative Trustee
By: /s/ Paul E. Larson
_____________________________________
Title: Administrative Trustee
By: /s/ John A. Merriman
_____________________________________
Title: Administrative Trustee
Confirmed and accepted as of the date
first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ John P. Tullsen, Jr.
________________________________
Name: John P. Tullsen, Jr.
Title: Authorized Signatory
EXHIBIT 4.5
==============================================================================
SERIES A CAPITAL SECURITIES GUARANTEE AGREEMENT
EQUITABLE OF IOWA COMPANIES CAPITAL TRUST II
Dated as of April 3, 1997
==============================================================================
CROSS REFERENCE TABLE*
Section of Trust Section of
Indenture Act of Guarantee
1939, as amended Agreement
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(a)
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(c)
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
312(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
313(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
313(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
313(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d); 3.2(a)
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7(a)
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6; 5.4(a)
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.10; 5.4
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
______________________
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not have any bearing upon the interpretation of any of
its terms or provisions.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
SECTION 2.2 Lists of Holders of Securities
SECTION 2.3 Reports by Capital Securities Guarantee Trustee
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee
SECTION 2.5 Evidence of Compliance with Conditions Precedent
SECTION 2.6 Guarantee Event of Default; Waiver
SECTION 2.7 Guarantee Event of Default; Notice
SECTION 2.8 Conflicting Interests
SECTION 2.9 Disclosure of Information
SECTION 2.10 Preferred Guarantee Trustee May File Proofs of Claim
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Capital Securities Guarantee Trustee
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee
SECTION 3.3 Not Responsible for Recitals or Issuance of Series A Capital
Securities Guarantee
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities
Guarantee Trustee
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
SECTION 5.2 Waiver of Notice and Demand
SECTION 5.3 Obligations Not Affected
SECTION 5.4 Rights of Holders
SECTION 5.5 Guarantee of Payment
SECTION 5.6 Subrogation
SECTION 5.7 Independent Obligations
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
SECTION 6.2 Ranking
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
SECTION 8.2 Indemnification
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
SECTION 9.2 Amendments
SECTION 9.3 Notices
SECTION 9.4 Exchange Offer
SECTION 9.5 Benefit
SECTION 9.6 Execution in Counterparts
SECTION 9.7 Governing Law
SERIES A CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Series A Capital Securities Guarantee"),
dated as of April 3, 1997, is executed and delivered by Equitable of Iowa
Companies, an Iowa corporation (the "Guarantor"), and The First National Bank
of Chicago, as trustee (the "Capital Securities Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Series A
Capital Securities (as defined herein) of Equitable of Iowa Companies Capital
Trust II, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to the Declaration (as defined herein), the Issuer is
issuing on the date hereof 50,000 capital securities, having an aggregate
liquidation amount of $50,000,000, such capital securities being designated
the 8.424% Series A Capital Securities (collectively the "Series A Capital
Securities") and, in connection with an Exchange Offer (as defined in the
Declaration), the Company has agreed to execute and deliver the Series B
Capital Securities Guarantee (as defined in the Declaration) for the benefit
of holders of the Series B Capital Securities (as defined in the Declaration).
WHEREAS, as incentive for the Holders to purchase the Series A Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree,
to the extent set forth in this Series A Capital Securities Guarantee, to pay
to the Holders the Guarantee Payments (as defined herein). The Guarantor agrees
to make certain other payments on the terms and conditions set forth herein.
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (as amended, modified or supplemented from time to time, the "Common
Securities Guarantee") with substantially identical terms to this Series A
Capital 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 payments under the Common Securities Guarantee are
subordinated, to the extent and in the manner set forth in the Common Securities
Guarantee, to the rights of Holders of Series A Capital Securities and the
Series B Capital Securities to receive Guarantee Payments under this Series A
Capital Securities Guarantee and the Series B Capital Securities Guarantee, as
the case may be.
NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby acknowledges shall benefit the Guarantor, the
Guarantor executes and delivers this Series A Capital Securities Guarantee
for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.
_______________________________
In this Series A Capital Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Series A Capital Securities Guarantee
but not defined in the preamble above have the respective meanings assigned
to them in this Section 1.1;
(b) terms defined in the Declaration as at the date of execution of this
Series A Capital Securities Guarantee have the same meaning when used in
this Series A Capital Securities Guarantee unless otherwise defined in this
Series A Capital Securities Guarantee;
(c) a term defined anywhere in this Series A Capital Securities Guarantee
has the same meaning throughout;
(d) all references to "the Series A Capital Securities Guarantee" or "this
Series A Capital Securities Guarantee" are to this Series A Capital
Securities Guarantee as modified, supplemented or amended from time to
time;
(e) all references in this Series A Capital Securities Guarantee to
Articles and Sections are to Articles and Sections of this Series A Capital
Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Series A Capital Securities Guarantee, unless otherwise
defined in this Series A Capital Securities Guarantee or unless the context
otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"AFFILIATE" has the same meaning as given to that term in Rule 405 under
the Securities Act of 1933, as amended, or any successor rule thereunder.
"BUSINESS DAY" means any day other than a Saturday or a Sunday, or a day
on which banking institutions in New York, New York are authorized or
required by law or executive order to close.
"CAPITAL SECURITIES GUARANTEE TRUSTEE" means The First National Bank of
Chicago, until a Successor Capital Securities Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of this
Series A Capital Securities Guarantee and thereafter means each such Successor
Capital Securities Guarantee Trustee.
"COMMON SECURITIES" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"CORPORATE TRUST OFFICE" means the office of the Capital Securities
Guarantee Trustee at which the corporate trust business of the Capital
Securities Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Series A Capital
Securities Guarantee is located at One First National Plaza - Suite 0126,
Chicago, Illinois 60670-0126, Attention: Corporate Trust Services Division;
telecopy no. (312) 407-1708.
"COVERED PERSON" means any Holder or beneficial owner of Series A Capital
Securities.
"DEBENTURES" means the series of subordinated deferrable interest
debentures to be issued by the Guarantor designated the 8.424% Series A
Subordinated Deferrable Interest Debentures due April 1, 2027 held by the
Property Trustee (as defined in the Declaration) of the Issuer.
"DECLARATION" means the Amended and Restated Declaration of Trust, dated
as of March 31, 1997, as amended, modified or supplemented from time to time,
among the trustees of the Issuer, the Guarantor, as sponsor, and the holders
from time to time of undivided beneficial interests in the assets of the Issuer.
"GUARANTEE EVENT OF DEFAULT" means a default by the Guarantor on any of its
payment or other obligations under this Series A Capital Securities Guarantee.
"GUARANTEE PAYMENTS" means the following payments or distributions, without
duplication, with respect to the Series A Capital Securities, to the extent not
paid or made by the Issuer: (i) any accumulated and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Series A
Capital Securities to the extent the Issuer has funds legally available
therefor at such time, (ii) the redemption price, including all accumulated and
unpaid Distributions to the date of redemption (the "Redemption Price") to the
extent the Issuer has funds legally available therefor at such time, with
respect to any Series A Capital Securities called for redemption by the Issuer,
and (iii) upon a voluntary or involuntary termination and liquidation of the
Issuer (other than in connection with the distribution of Debentures to the
Holders in exchange for Series A Capital Securities as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation amount and all
accumulated and unpaid Distributions on the Series A Capital Securities to the
date of payment, to the extent the Issuer has funds legally 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 or any guarantee payment under
Other Common Securities Guarantees shall be made until the Holders of the Series
A Capital Securities shall be paid in full the Guarantee Payments to which they
are entitled under this Series A Capital Securities Guarantee.
"HOLDER" shall mean any holder, as registered on the books and records
of the Issuer, of any Series A Capital Securities; provided, however, that,
in determining whether the holders of the requisite percentage of Series A
Capital Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor; and
provided further, that in determining whether the Holders of the requisite
liquidation amount of Series A Capital Securities have voted on any matter
provided for in this Series A Capital Securities Guarantee, then for the purpose
of such determination only (and not for any other purpose hereunder), if the
Series A Capital Securities remain in the form of one or more Global Capital
Security certificates (as defined in the Declaration), the term "Holders" shall
mean the holder of the Global Capital Security certificate acting at the
direction of the Capital Security Beneficial Owners (as defined in the
Declaration).
"INDEMNIFIED PERSON" means the Capital Securities Guarantee Trustee, any
Affiliate of the Capital Securities Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Capital Securities Guarantee Trustee.
"INDENTURE" means the Indenture dated as of March 31, 1997, among the
Guarantor (the "Debenture Issuer") and The First National Bank of Chicago, as
trustee, and any indenture supplemental thereto pursuant to which the Debentures
are to be issued to the Property Trustee (as defined in the Declaration) of the
Issuer.
"MAJORITY IN LIQUIDATION AMOUNT OF THE SERIES A CAPITAL SECURITIES" means,
except as provided by the Trust Indenture Act, a vote by the Holder(s) of more
than 50% of the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accumulated and
unpaid Distributions to the date upon which the voting percentages are
determined) of all Series A Capital Securities. In determining whether the
Holders of the requisite amount of Series A Capital Securities have voted,
Series A Capital Securities which are owned by the Guarantor or any Affiliate of
the Guarantor or any other obligor on the Series A Capital Securities shall be
disregarded for the purpose of any such determination.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a certificate
signed by two Authorized Officers (as defined in the Declaration) of such
Person. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Series A Capital Securities Guarantee
(other than pursuant to Section 314(a)(4) of the Trust Indenture Act) shall
include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"OTHER COMMON SECURITIES GUARANTEES" shall have the same meaning as "Other
Guarantees" in the Common Securities Guarantee.
"OTHER DEBENTURES" means all subordinated debentures issued, or to be
issued, by the Guarantor to trusts established, or to be established, by the
Guarantor, in each case similar to the Issuer, including, without limitation,
the Guarantor's 8.70% Subordinated Deferrable Interest Debentures due July 30,
2026 issued by Guarantor on July 23, 1996 to Equitable of Iowa Companies Capital
Trust in the principal amount of $128,866,000.
"OTHER GUARANTEES" means all guarantees issued, or to be issued, by the
Guarantor with respect to capital or other securities similar to the Series A
Capital Securities issued by other trusts established, or to be established, by
the Guarantor, in each case similar to the Issuer, including, without
limitation, the Preferred Securities Guarantee Agreement issued by the
Guarantor with respect to $125,000,000 of 8.70% Trust Originated Preferred
Securities due July 30, 2026 issued by Equitable of Iowa Companies Capital
Trust on July 23, 1996.
"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.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement,
dated as of April 3, 1997, by and among the Guarantor, the Issuer and the
Initial Purchaser named therein, as such agreement may be amended, modified
or supplemented from time to time.
"RESPONSIBLE OFFICER" means, with respect to the Capital Securities
Guarantee Trustee, any officer within the Corporate Trust Office of the Capital
Securities Guarantee Trustee, including any vice-president, any assistant
vice-president, any secretary, any assistant secretary, the treasurer, any
assistant treasurer, any trust officer, any senior trust officer or other
officer of the Corporate Trust Office of the Capital Securities 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 CAPITAL SECURITIES GUARANTEE TRUSTEE" means a successor Capital
Securities Guarantee Trustee possessing the qualifications to act as Capital
Securities Guarantee Trustee under Section 4.1.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"TRUST SECURITIES" means the Common Securities and the Series A Capital
Securities and Series B Capital Securities, collectively.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
_________________________________
(a) This Series A Capital Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Series A Capital Securities Guarantee and shall, to the extent applicable, be
governed by such provisions.
(b) If and to the extent that any provision of this Series A Capital
Securities Guarantee limits, qualifies or conflicts with the duties imposed
by Sections 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 Capital Securities Guarantee Trustee
(unless the Capital Securities Guarantee Trustee is otherwise the registrar of
the Capital Securities) with a list, in such form as the Capital Securities
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") (i) within one Business Day after January 1 and
June 30 of each year and current as of such date, 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 Capital Securities 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 Capital
Securities Guarantee Trustee by the Guarantor. The Capital Securities Guarantee
Trustee shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it, provided that it may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Capital Securities 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 Capital Securities Guarantee Trustee.
________________________________________________
Within 60 days after May 15 of each year, commencing in the year of the
first anniversary of the issuance of the Series A Capital Securities, the
Capital Securities Guarantee Trustee shall provide to the Holders 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
Capital Securities Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee.
_________________________________________________________
The Guarantor shall provide to the Capital Securities Guarantee Trustee
such documents, reports and information as required by Section 314 (if any)
of the Trust Indenture Act 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, provided that such
compliance certificate shall be delivered on or before 120 days after the end
of each fiscal year of the Guarantor.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
_________________________________________________
The Guarantor shall provide to the Capital Securities Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided
for in this Series A Capital Securities Guarantee that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
SECTION 2.6 Guarantee Event of Default; Waiver.
___________________________________
The Holders of a Majority in liquidation amount of Series A Capital
Securities may, by vote, on behalf of all the Holders, waive any past Guarantee
Event of Default and its consequences. Upon such waiver, any such Guarantee
Event of Default shall cease to exist, and any Guarantee Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Series A Capital Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Guarantee Event of Default or impair any right
consequent thereon.
SECTION 2.7 Guarantee Event of Default; Notice.
___________________________________
(a) The Capital Securities Guarantee Trustee shall, within five Business
Days after the occurrence of a Guarantee Event of Default is actually known to a
Responsible Officer of the Capital Securities Guarantee Trustee, mail, by first
class postage prepaid, to all Holders, notices of all such defaults, unless
such defaults have been cured before the giving of such notice; provided, that,
except in the case of default in the payment of any Guarantee Payment, the
Capital Securities Guarantee Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors and/or Responsible Officers of the Capital
Securities Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Series A Capital
Securities.
(b) The Capital Securities Guarantee Trustee shall not be deemed to
have knowledge of any Guarantee Event of Default unless the Capital Securities
Guarantee Trustee shall have received written notice from the Guarantor or a
Holder, or a Responsible Officer of the Capital Securities Guarantee Trustee
charged with the administration of this Series A Capital Securities Guarantee
shall have obtained actual knowledge, of such Guarantee Event of Default.
SECTION 2.8 Conflicting Interests.
______________________
The Declaration shall be deemed to be specifically described in this
Series A Capital Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 2.9 Disclosure of Information.
__________________________
The disclosure of information as to the names and addresses of the Holders
of the Series A Capital Securities in accordance with Section 312 of the Trust
Indenture Act, regardless of the source from which such information was derived,
shall not be deemed to be a violation of any existing law, or any law hereafter
enacted which does not specifically refer to Section 312 of the Trust Indenture
Act, nor shall the Capital Securities Guarantee Trustee be held accountable by
reason of mailing any material pursuant to a request made under Section 312(b)
of the Trust Indenture Act.
SECTION 2.10 Capital Securities Guarantee Trustee May File Proofs of Claim.
______________________________________________________________
Upon the occurrence of a Guarantee Event of Default, the Capital Securities
Guarantee Trustee is hereby authorized to (a) recover judgment, in its own name
and as trustee of an express trust, against the Guarantor for the whole amount
of any Guarantee Payments remaining unpaid and (b) file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have its
claims and those of the Holders of the Series A Capital Securities allowed in
any judicial proceedings relative to the Guarantor, its creditors or its
property.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Capital Securities Guarantee Trustee.
__________________________________________________________
(a) This Series A Capital Securities Guarantee shall be held by the
Capital Securities Guarantee Trustee for the benefit of the Holders, and the
Capital Securities Guarantee Trustee shall not transfer this Series A Capital
Securities Guarantee to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(b) or to a Successor Capital Securities Guarantee
Trustee on acceptance by such Successor Capital Securities Guarantee Trustee of
its appointment to act as Successor Capital Securities Guarantee Trustee. The
right, title and interest of the Capital Securities Guarantee Trustee in and to
this Series A Capital Securities Guarantee shall automatically vest in any
Successor Capital Securities Guarantee Trustee, and such vesting and succession
of title shall be effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such Successor Capital
Securities Guarantee Trustee.
(b) If a Guarantee Event of Default actually known to a Responsible
Officer of the Capital Securities Guarantee Trustee has occurred and is
continuing, the Capital Securities Guarantee Trustee shall enforce this Series
A Capital Securities Guarantee for the benefit of the Holders.
(c) The Capital Securities Guarantee Trustee, before the occurrence of
any Guarantee Event of Default and after the curing or waiving of all Guarantee
Events of Default that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Series A Capital Securities
Guarantee, and no implied covenants shall be read into this Series A Capital
Securities Guarantee against the Capital Securities Guarantee Trustee. In case
a Guarantee 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
Capital Securities Guarantee Trustee, the Capital Securities Guarantee Trustee
shall exercise such of the rights and powers vested in it by this Series A
Capital 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 Series A Capital Securities Guarantee shall be
construed to relieve the Capital Securities Guarantee Trustee from liability
for its own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) prior to the occurrence of any Guarantee Event of Default and after
the curing or waiving of all such Guarantee Events of Default that may have
occurred:
(A) the duties and obligations of the Capital Securities Guarantee
Trustee shall be determined solely by the express provisions of this
Series A Capital Securities Guarantee, and the Capital Securities
Guarantee Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Series A Capital Securities Guarantee, and no implied covenants or
obligations shall be read into this Series A Capital Securities
Guarantee against the Capital Securities Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Capital
Securities Guarantee Trustee, the Capital Securities 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 Capital Securities Guarantee Trustee and
conforming to the requirements of this Series A Capital 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 Capital Securities Guarantee Trustee, the Capital Securities
Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Series A Capital Securities Guarantee;
(ii) the Capital Securities Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Capital Securities Guarantee Trustee, unless it shall be proved that the
Capital Securities Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Capital Securities 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 a Majority in liquidation
amount of the Series A Capital Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the Capital
Securities Guarantee Trustee, or exercising any trust or power conferred
upon the Capital Securities Guarantee Trustee under this Series A Capital
Securities Guarantee; and
(iv) no provision of this Series A Capital Securities Guarantee shall
require the Capital Securities 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 Capital Securities 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 Series A Capital Securities Guarantee
or indemnity, reasonably satisfactory to the Capital Securities Guarantee
Trustee, against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee.
_______________________________________________________
(a) Subject to the provisions of Section 3.1:
(i) The Capital Securities 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 Series A
Capital Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Series A Capital Securities
Guarantee, the Capital Securities Guarantee Trustee shall deem it desirable
that a matter be proved or established before taking, suffering or omitting
any action hereunder, the Capital Securities Guarantee Trustee (unless
other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request, shall be entitled to receive and may
conclusively rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor.
(iv) The Capital Securities 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 Capital Securities 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 Capital Securities Guarantee Trustee shall have the
right at any time to seek instructions concerning the administration of
this Series A Capital Securities Guarantee from any court of competent
jurisdiction.
(vi) The Capital Securities Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Series A
Capital Securities Guarantee at the request or direction of any Holder,
unless such Holder shall have provided to the Capital Securities Guarantee
Trustee such security and indemnity, reasonably satisfactory to the Capital
Securities Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the Capital Securities
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 Capital
Securities Guarantee Trustee; provided, that nothing contained in this
Section 3.2(a)(vi) shall be taken to relieve the Capital Securities
Guarantee Trustee, upon the occurrence of a Guarantee Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Series A Capital Securities Guarantee.
(vii) The Capital Securities 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 Capital Securities
Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(viii) The Capital Securities 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 Capital Securities 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 Capital Securities Guarantee Trustee or its
agents hereunder shall bind the Holders, and the signature of the Capital
Securities 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 Capital Securities Guarantee Trustee to
so act or as to its compliance with any of the terms and provisions of this
Series A Capital Securities Guarantee, both of which shall be conclusively
evidenced by the Capital Securities Guarantee Trustee's or its agent's
taking such action.
(x) Whenever in the administration of this Series A Capital Securities
Guarantee the Capital Securities Guarantee Trustee shall deem it desirable
to receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Capital Securities Guarantee Trustee
(i) may request instructions from the Holders of a Majority in liquidation
amount of the Series A Capital Securities, (ii) may refrain from enforcing
such remedy or right or taking such other action until such instructions
are received, and (iii) shall be protected in conclusively relying on or
acting in accordance with such instructions.
(b) No provision of this Series A Capital Securities Guarantee shall be
deemed to impose any duty or obligation on the Capital Securities 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 Capital Securities 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, or
which would expose the Capital Securities Guarantee Trustee to liability,
financial or otherwise. No permissive power or authority available to the
Capital Securities Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Series A Capital
____________________________________________________________
Securities Guarantee.
_____________________
The recitals contained in this Series A Capital Securities Guarantee shall
be taken as the statements of the Guarantor, and the Capital Securities
Guarantee Trustee does not assume any responsibility for their correctness.
The Capital Securities Guarantee Trustee makes no representation as to the
validity or sufficiency of this Series A Capital Securities Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
Section 4.1 Capital Securities Guarantee Trustee; Eligibility.
__________________________________________________
(a) There shall at all times be a Capital Securities 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 Capital Securities Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Capital Securities Guarantee
Trustee shall immediately resign in the manner and with the effect set out in
Section 4.2(c).
(c) If the Capital Securities Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital Securities Guarantee Trustee and Guarantor shall in
all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act, subject only to the penultimate paragraph thereof.
Section 4.2 Appointment, Removal and Resignation of Capital Securities
__________________________________________________________
Guarantee Trustee.
__________________
(a) Subject to Section 4.2(b), the Capital Securities Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor except
during a Guarantee Event of Default.
(b) The Capital Securities Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Capital Securities Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Capital Securities Guarantee Trustee
and delivered to the Guarantor.
(c) The Capital Securities Guarantee Trustee shall hold office until a
Successor Capital Securities Guarantee Trustee shall have been appointed or
until its removal or resignation. The Capital Securities Guarantee Trustee
may resign from office (without need for prior or subsequent accounting) by
an instrument in writing executed by the Capital Securities Guarantee Trustee
and delivered to the Guarantor, which resignation shall not take effect until
a Successor Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Capital Securities Guarantee Trustee and delivered to the Guarantor and the
resigning Capital Securities Guarantee Trustee.
(d) If no Successor Capital Securities 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 Capital
Securities Guarantee Trustee resigning or being removed may petition any court
of competent jurisdiction for appointment of a Successor Capital Securities
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Capital Securities Guarantee
Trustee.
(e) No Capital Securities Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Capital Securities Guarantee Trustee.
(f) Upon termination of this Series A Capital Securities Guarantee or
removal or resignation of the Capital Securities Guarantee Trustee pursuant
to this Section 4.2, the Guarantor shall pay to the Capital Securities
Guarantee Trustee all amounts due to the Capital Securities Guarantee Trustee
accrued to the date of such termination, removal or resignation.
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 other than the defense of
payment. 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 Series A Capital
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. Notwithstanding anything to the contrary herein, the
Guarantor retains all of its rights under the Indenture to extend the interest
payment period on the Debentures (in accordance with the terms of the Indenture)
and the Guarantor shall not be obligated hereunder to make any Guarantee
Payments during any Extended Interest Payment Period (as defined in the
Indenture) with respect to the Distributions (as defined in the Declaration) on
the Series A Capital Securities.
Section 5.3 Obligations Not Affected.
_________________________
Except as otherwise provided herein, the obligations, covenants, agreements
and duties of the Guarantor under this Series A Capital 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 Series A Capital
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 Series A Capital Securities
or the extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Series A Capital Securities
(other than an extension of time for payment of Distributions, Redemption
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
Property Trustee or the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Property Trustee or the Holders
pursuant to the terms of the Series A Capital 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 Series A Capital
Securities;
(f) The settlement or compromise of any obligation guaranteed hereby or
hereby incurred;
(g) The consummation of the Exchange Offer; or
(h) 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 with respect to
the Guarantee Payments shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Capital Securities Guarantee Trustee
or the Holders to give notice to, or obtain consent of, the Guarantor with
respect to the happening of any of the foregoing.
No setoff, counterclaim, reduction or diminution of any obligation, or
any defense of any kind or nature that the Guarantor has or may have against
any Holder shall be available hereunder to the Guarantor against such Holder
to reduce the payments to it under this Series A Capital Securities Guarantee.
SECTION 5.4 Rights of Holders.
__________________
(a) The Holders of a Majority in liquidation amount of the Series A
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Capital Securities
Guarantee Trustee in respect of this Series A Capital Securities Guarantee or
exercising any trust or power conferred upon the Capital Securities Guarantee
Trustee under this Series A Capital Securities Guarantee.
(b) If the Capital Securities Guarantee Trustee fails to enforce this
Series A Capital Securities Guarantee, any Holder may institute a legal
proceeding directly against the Guarantor to enforce the Capital Securities
Guarantee Trustee's rights under this Series A Capital Securities Guarantee,
without first instituting a legal proceeding against the Issuer, the Capital
Securities Guarantee Trustee or any other person or entity. Notwithstanding
the foregoing, if the Guarantor has failed to make a Guarantee Payment, a Holder
may directly institute a proceeding against the Guarantor for enforcement of
this Series A Capital Securities Guarantee for such payment to the Holder, and
the amount of the payment will be based on the Holder's pro rata share of the
amount due and owing on all of the Series A Capital Securities. The Guarantor
hereby waives any right or remedy to require that any action on this Series A
Capital Securities Guarantee 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 Series A Capital 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 Series A Capital 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 Series A Capital
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Series A Capital 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 Series A Capital
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Series A
Capital Securities Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (h), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
___________________________
So long as any Series A Capital Securities remain outstanding, the
Guarantor shall not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any
of the Guarantor's capital stock (which includes common, preferred and
preference stock), (ii) make any payment of principal, interest, or premium,
if any, on or repay, repurchase or redeem any debt securities of the Guarantor
(including any Other Debentures) that rank pari passu with or junior in right of
payment to the Debentures or (iii) make any guarantee payments with respect to
any guarantee by the Guarantor of any securities of any subsidiary of the
Guarantor (including Other Guarantees) if such guarantee ranks pari passu with
or junior in right of payment to the Debentures (other than (a) dividends or
distributions in shares of or options, warrants or rights to subscribe for or
purchase shares of, common stock of the Guarantor, (b) any declaration of a
dividend in connection with the implementation of a stockholder's rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under this Series A
Capital Securities Guarantee, (d) as a direct result of, and only to the extent
required in order to avoid the issuance of fractional shares of capital stock
following, 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 pursuant to an
acquisition in which fractional shares of the Guarantor's capital stock would
otherwise be issued, (e) the purchase of fractional interests in shares of the
Guarantor's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, and
(f) purchases of common stock related to the issuance of common stock or rights
under any benefit plan for directors, officers, agents or employees of the
Guarantor or its subsidiaries or any of the Guarantor's dividend reinvestment
or director, officer, agent or employee stock purchase plans), if at such time
(i) an Event of Default (as defined in the Indenture) shall have occurred and be
continuing, or would occur upon the taking of any action specified in clauses
(i) through (iii) above, (ii) there shall have occurred any event of which the
Guarantor has actual knowledge that (a) is, or with the giving of notice or the
lapse of time, or both, would be an Event of Default (as defined in the
Indenture) and (b) in respect of which the Guarantor shall not have taken
reasonable steps to cure, (iii) the Guarantor shall be in default with respect
to its payment of any obligations under this Series A Capital Securities
Guarantee or (iv) the Guarantor shall have given notice of its election of the
exercise of its right to extend the interest payment period pursuant to Section
16.01 of the Indenture or with respect to any Other Debentures of the Guarantor
and any such extension shall be continuing.
SECTION 6.2 Ranking.
________
This Series A Capital Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right
of payment to all Senior Indebtedness (as defined in the Indenture), to the same
extent and in the same manner that the Debentures are subordinated to Senior
Indebtedness pursuant to the Indenture, it being understood that the terms of
Article XV of the Indenture shall apply to the obligations of the Guarantor
under this Series A Capital Securities Guarantee as if (x) such Article XV were
set forth herein in full and (y) such obligations were substituted for the term
"Securities" appearing in such Article XV, (ii) Subordinate and junior in right
of payment to all other liabilities of the Guarantor, except those liabilities
of the Guarantor made pari passu or subordinate by their terms, (iii) pari passu
with the most senior preferred or preference stock now or hereafter issued by
the Guarantor and with any Other Guarantee and 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 (iv) senior to the Guarantor's common stock.
If an Event of Default (as defined in the Indenture) has occurred and is
continuing, the rights of the holders of the Common Securities to receive any
payments under the Common Securities Guarantee shall be subordinated to the
rights of the Holders to receive the Guarantee Payments hereunder.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.
____________
This Series A Capital Securities Guarantee shall terminate (i) upon full
payment of the Redemption Price of all Series A Capital Securities, (ii) upon
liquidation of the Issuer, the full payment of the amounts payable in accordance
with the Declaration or the distribution of the Debentures to the Holders of
all of the Series A Capital Securities, or (iii) upon exchange of all the Series
A Capital Securities for the Series B Capital Securities in the Exchange Offer
and the execution and delivery of the Series B Capital Securities Guarantee.
Notwithstanding the foregoing, this Series A Capital Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder must restore payment of any sums paid under the Series A Capital
Securities or under this Series A Capital Securities Guarantee.
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 Series A
Capital 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 Series A Capital 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, 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 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 provisions of this
Section 8.2 shall survive the termination of this Series A Capital Securities
Guarantee or the resignation or removal of the Capital Securities Guarantee
Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
_______________________
All guarantees and agreements contained in this Series A Capital
Securities Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
then outstanding.
SECTION 9.2 Amendments.
___________
Except with respect to any changes that do not materially adversely affect
the rights of Holders (in which case no consent of Holders will be required),
this Series A Capital Securities Guarantee may only be amended with the prior
approval of the Holders of a Majority in liquidation amount of the Series A
Capital Securities. The provisions of the Declaration with respect to consents
to amendments thereof (whether at a meeting or otherwise) shall apply to the
giving of such approval.
SECTION 9.3 Notices.
________
All notices provided for in this Series A Capital 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 Capital Securities Guarantee Trustee, at the Capital
Securities Guarantee Trustee's mailing address set forth below (or such
other address as the Capital Securities Guarantee Trustee may give notice
of to the Guarantor, the Holders and the Issuer):
The First National Bank of Chicago
One First National Plaza - Suite 0126
Chicago, Illinois 60670-0126
Attn: Corporate Trust Services Division
Telecopy No. (312) 407-1708
(b) If given to the Guarantor, at the Guarantor's mailing address forth
below (or such other address as the Guarantor may give notice of to the
Capital Securities Guarantee Trustee and the Holders of the Series A
Capital Securities):
Equitable of Iowa Companies
604 Locust Street
Des Moines, Iowa 50309
Attn: John A. Merriman
Telecopy No. (515) 245-6973
(c) If given to any Holder of Series A Capital Securities, at the address
set forth on the books and records of the Issuer.
(d) If given to the Issuer, in care of the Administrative Trustees at the
Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Holders and the Capital Securities
Guarantee Trustee):
Equitable of Iowa Companies Capital Trust II
c/o Equitable of Iowa Companies
604 Locust Street
Des Moines, Iowa 50309
Attn: John A. Merriman
Telecopy No. (515) 245-6973
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 Exchange Offer.
_______________
In the event an Exchange Offer Registration Statement (as defined in the
Registration Rights Agreement) becomes effective and the Issuer issues any
Series B Capital Securities in the Exchange Offer, the Guarantor will enter into
a new capital securities guarantee agreement, in substantially the same form as
this Series A Capital Securities Guarantee, with respect to the Series B Capital
Securities.
SECTION 9.5 Benefit.
________
This Series A Capital Securities Guarantee is solely for the benefit of
the Holders and, subject to Section 3.1(a), is not separately transferable from
the Series A Capital Securities.
SECTION 9.6 Execution in Counterparts.
__________________________
This Series A Capital Securities Guarantee may be executed in any number
of counterparts, each of which shall be an original, but such counterparts shall
constitute but one and the same instrument.
SECTION 9.7 Governing Law.
______________
THIS SERIES A CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF IOWA,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.
IN WITNESS WHEREOF, this Series A Capital Securities Guarantee is executed
as of the day and year first above written.
EQUITABLE OF IOWA COMPANIES,
as Guarantor
By: /s/ Paul E. Larson
_______________________________
Name: Paul E. Larson
_____________________________
Title:Executive Vice President and
______________________________
Chief Financial Officer
______________________________
THE FIRST NATIONAL BANK OF CHICAGO,
as Capital Securities Guarantee Trustee
By: /s/ Richard D. Manella
________________________________
Name: Richard D. Manella
______________________________
Title: Vice President
_______________________________
[Signature Page to the Series A Capital Securities Guarantee Agreement]
