<PAGE> 1
Exhibit 4.4
=========================================
AMENDED AND RESTATED
DECLARATION
OF TRUST
HOUSEHOLD CAPITAL TRUST VI
Dated as of ________ ___, 2001
=========================================
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
-------------------
<S> <C>
310(a) . . . . . . . . . . . . . . . . . . . . . . . 5.3(a)
310(b) . . . . . . . . . . . . . . . . . . . . . . . 5.3(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)
313 . . . . . . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(f) . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . . . . . . 3.9(b)
315(b) . . . . . . . . . . . . . . . . . . . . . . . 2.8
315(c) . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
315(d) . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
316(a) . . . . . . . . . . . . . . . . . . . . . . . Exhibit At 2.6
316(c) . . . . . . . . . . . . . . . . . . . . . . . 3.6(e)
</TABLE>
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
DECLARATION OF TRUST ..................................................... 1
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions ............................................. 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application ........................ 8
SECTION 2.2 Lists of Holders of Securities .......................... 8
SECTION 2.3 Reports by the Property Trustee ......................... 9
SECTION 2.4 Periodic Reports to Property Trustee .................... 9
SECTION 2.5 Evidence of Compliance with Conditions Precedent ........ 9
SECTION 2.6 Events of Default; Waiver ............................... 9
SECTION 2.7 Event of Default; Notice ................................ 11
ARTICLE III
ORGANIZATION
SECTION 3.1 Name .................................................... 12
SECTION 3.2 Office .................................................. 12
SECTION 3.3 Purpose ................................................. 12
SECTION 3.4 Authority ............................................... 12
SECTION 3.5 Title to Property of the Trust .......................... 13
SECTION 3.6 Powers and Duties of the Regular Trustees ............... 13
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees .... 16
SECTION 3.8 Powers and Duties of the Property Trustee ............... 17
SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee ............................................... 19
SECTION 3.10 Certain Rights of Property Trustee ...................... 20
SECTION 3.11 Delaware Trustee ........................................ 23
SECTION 3.12 Execution of Documents .................................. 23
SECTION 3.13 Not Responsible for Recitals or Issuance
of Securities ......................................... 23
SECTION 3.14 Duration of Trust ....................................... 24
SECTION 3.15 Mergers ................................................. 24
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities ................. 26
SECTION 4.2 Responsibilities of the Sponsor ......................... 26
</TABLE>
<PAGE> 4
<TABLE>
ARTICLE V
TRUSTEES
<S> <C>
SECTION 5.1 Number of Trustees ...................................... 27
SECTION 5.2 Delaware Trustee ........................................ 27
SECTION 5.3 Property Trustee; Eligibility ........................... 28
SECTION 5.4 Qualifications of Regular Trustees and Delaware
Trustee Generally ..................................... 29
SECTION 5.5 Initial Trustees ........................................ 29
SECTION 5.6 Appointment, Removal and Resignation of Trustees ........ 29
SECTION 5.7 Vacancies Among Trustees ................................ 31
SECTION 5.8 Effect of Vacancies ..................................... 32
SECTION 5.9 Meetings ................................................ 32
SECTION 5.10 Delegation of Power ..................................... 32
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions ........................................... 33
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities ................. 33
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust .................................... 34
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities .................................. 35
SECTION 9.2 Transfer of Certificates ................................ 36
SECTION 9.3 Deemed Security Holders ................................. 36
SECTION 9.4 Book Entry Interests .................................... 37
SECTION 9.5 Notices to Clearing Agency .............................. 37
SECTION 9.6 Appointment of Successor Clearing Agency ................ 38
SECTION 9.7 Definitive Preferred Security Certificates .............. 38
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates ....... 39
</TABLE>
<PAGE> 5
<TABLE>
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
<S> <C>
SECTION 10.1 Liability ............................................... 39
SECTION 10.2 Exculpation ............................................. 40
SECTION 10.3 Fiduciary Duty .......................................... 40
SECTION 10.4 Indemnification ......................................... 42
SECTION 10.5 Outside Businesses ...................................... 42
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year ............................................. 43
SECTION 11.2 Certain Accounting Matters .............................. 43
SECTION 11.3 Banking ................................................. 44
SECTION 11.4 Withholding ............................................. 44
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments .............................................. 44
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent ............................. 46
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee ...... 48
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices ................................................. 49
SECTION 14.2 Governing Law ........................................... 50
SECTION 14.3 Intention of the Parties ................................ 50
SECTION 14.4 Headings ................................................ 50
SECTION 14.5 Successors and Assigns .................................. 50
SECTION 14.6 Partial Enforceability .................................. 51
SECTION 14.7 Counterparts ............................................ 51
</TABLE>
<PAGE> 6
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
HOUSEHOLD CAPITAL TRUST VI
_______ __, 2001
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and effective
as of _______ __, 2001 by the undersigned trustees (together with all other
Persons from time to time duly appointed and serving as trustees in accordance
with the provisions of this Declaration, the "Trustees"), Household
International, Inc., a Delaware corporation, as trust sponsor (the "Sponsor"),
and by the holders, from time to time, of undivided beneficial interests in the
Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established a trust (the "Trust") under
the Delaware Business Trust Act pursuant to a Declaration of Trust, dated as of
________, 2001 (the "Original Declaration") and a Certificate of Trust filed
with the Secretary of State of Delaware on ________, 2001, 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 Junior Subordinated Debt Securities of the Sponsor;
NOW, THEREFORE, it being the intention of the parties hereto to continue the
Trust as a statutory business trust under the Business Trust Act and that this
Declaration constitutes the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
(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 of Trust as modified, supplemented or amended
from time to time;
1
<PAGE> 7
(d) all references in this Declaration to Articles and Sections
and Exhibits are to Articles and Sections of 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.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Appointment Event" means an event defined in the terms of the Preferred
Securities as set forth in Exhibit A which entitles the Holders of a Majority
in liquidation amount of the Preferred Securities to appoint a Special Regular
Trustee.
"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 Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a day on which banking institutions in
New York, New York, Chicago, Illinois, or the State of Delaware are authorized
or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del.
C. Section Section 3801 et seq., as it may be amended from time to time.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depository for
the Preferred Securities and in whose name or in the name of a nominee of that
organization, shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
2
<PAGE> 8
"Closing Date" means ____________________, 2001.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" has the meaning specified in Section 3.6.
"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement of the Sponsor in
respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully registered
form representing a Common Security substantially in the form of Annex II to
Exhibit A.
"Coupon Rate" has the meaning set forth in Section 2(a) of Exhibit A hereto.
"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.
"Debt Issuer" means Household International, Inc., a Delaware corporation.
"Debt Trustee" means Bank One, National Association, a national banking
association, as trustee under the Indenture until a successor is appointed
thereunder and thereafter means such successor trustee.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.4.
"Direction" by a Person means a written direction signed (a) if the Person is a
natural person, by that Person; or (b) in any other case, in the name of such
Person by one or more Authorized Officers of that Person.
"Dissolution Tax Opinion" has the meaning set forth in Section 4(c) of Exhibit
A hereto.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing Agency.
3
<PAGE> 9
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time or any successor legislation.
"Event of Default" in respect of the Securities means an Event of Default (as
defined in the Indenture) has occurred and is continuing in respect of the
Notes.
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a Security is
registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means any Trustee, any Affiliate of any Trustee, or any
officers, directors, shareholders, members, partners, employees,
representatives or agents of any Trustee, or any employee or agent of the Trust
or its Affiliates.
"Indenture" means the Indenture dated as of May 15, 1995 among the Debt Issuer,
and Bank One, National Association, as trustee and the indenture supplemental
thereto pursuant to which the Notes are to be issued.
"Investment Company" means an investment company as defined in the Investment
Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as amended
from time to time or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities, Holder(s) of Securities voting together
as a single class or, as the context may require, Holder(s) of Preferred
Securities or Common Securities each, voting separately as a class, who vote
Securities of a relevant class, and the aggregate liquidation amount (including
the stated amount that would be paid on redemption, liquidation or maturity,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of the Securities voted by such Holders represents
more than 50% of the above stated liquidation amount of all Securities of such
class.
"Ministerial Action" has the meaning set forth in the terms of the Securities
as set forth in Exhibit A.
"No Recognition Opinion" has the meaning set forth in Section 4(c) of Exhibit A
hereto.
"Notes" means the series of junior subordinated debt securities to be issued by
the Debt Issuer under the Indenture to the Property
4
<PAGE> 10
Trustee, a specimen certificate for such series of Notes being Exhibit B.
"Officers' Certificate" means, with respect to any Person, 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 Certificate has
read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Person" means a legal entity, including any individual, corporation, estate,
partnership, joint venture, association, joint stock company, limited liability
company, trust, unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement of the Sponsor
in respect of the Preferred Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a Preferred
Security substantially in the form of Annex I to Exhibit A.
5
<PAGE> 11
"Property Trustee" means the Trustee meeting the eligibility requirements set
forth in Section 5.3.
"Property Account" has the meaning set forth in Section 3.8(c).
"Quorum" means a majority of the Regular Trustees or if there are only two
Regular Trustees, both of them.
"Redemption Tax Opinion" has the meaning set forth in Section 4(c) of Exhibit A
hereto.
"Regular Trustee" means any Trustee other than the Property Trustee and the
Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person which owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, the chairman
of the board of directors, the president, any vice-president, any assistant
vice-president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, any trust officer or assistant trust officer or any other
officer 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.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Guarantees" means the Common Securities Guarantee and the Preferred
Security Guarantee.
"66-2/3% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities, Holder(s) of Securities voting together
as a single class or, as the context may require, Holder(s) of Preferred
Securities or Common Securities, each voting separately as a class, who vote
Securities of a relevant class, and the aggregate liquidation amount (including
the stated amount that would be paid on redemption, liquidation or maturity,
plus accrued and unpaid Distributions, to the date upon which the voting
percentages are determined) of the Securities voted by such Holders represents
66-2/3% of the above-stated liquidation amount of all Securities of such class.
6
<PAGE> 12
"Special Event" has the meaning set forth in the terms of the Securities.
"Special Regular Trustee" means a Regular Trustee appointed by the Holders of a
Majority in liquidation amount of the Preferred Securities in accordance with
Section 5.6(a)(ii)(B).
"Sponsor" means Household International, Inc., a Delaware corporation or any
successor entity in a merger, in its capacity as sponsor of the Trust.
"Successor Entity" has the meaning set forth in Section 3.15(b).
"Successor Property Trustee" means a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.3(a).
"Successor Securities" has the meaning set forth in Section 3.15(b).
"Super Majority" means where consent under the Indenture would require the
consent of greater than a majority of the holders in principal amount of Notes
affected thereby.
"Tax Event" has the meaning set forth in Section 4(c) of Exhibit A hereto.
"10% in liquidation amount of the Securities" means, except as provided in the
terms of the Preferred Securities, Holder(s) of Securities voting together as a
single class or, as the context may require, Holder(s) of Preferred Securities
or Common Securities, each voting separately as a class, who vote Securities of
a relevant class, and the liquidation amount (including the stated amount that
would be paid on redemption, liquidation or maturity, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
the Securities voted by such Holders represents 10% of the above stated
liquidation amount of all Securities of such class.
"Treasury Regulations" means 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.
7
<PAGE> 13
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Underwriting Agreement" means the Underwriting Agreement for the offering and
sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and
shall, to the extent applicable, be governed by such provisions;
(b) the 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 Section
Section 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control; and
(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, the Debt Issuer and the Regular Trustees
on behalf of the Trust shall provide the Property Trustee (i)
within 14 days after each record date for payment of Distributions a
list, in such form as the Property Trustee may reasonably require,
of the names and addresses of the Holders of the Securities ("List
of Holders") as of such record date, provided that none of the
Sponsor, the Debt Issuer or the Regular Trustees on behalf of the
Trust shall be obligated to provide such List of Holders at any time
the List of Holders does not differ from the most recent List of
Holders given to the Property Trustee by the Sponsor, the Debt
Issuer and the Regular Trustees on behalf of the Trust, and (ii) at
any other time, within 30 days of receipt by the Trust of a written
request for a List of Holders as of a date no more than 14 days
before such List of Holders is given to the Property Trustee. The
Property Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of
8
<PAGE> 14
Holders given to it or which it receives in its capacity as Paying
Agent (if acting in such capacity) provided that the Property
Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders; and (b) the Property Trustee
shall comply with its obligations under Sections 311(a), 311(b)
and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year, the Property Trustee shall provide to
the Holders of the Preferred Securities such reports as are required by Section
313 of the Trust Indenture Act, if any, in the form and in the manner provided
by Section 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor, the Debt Issuer and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as required by Section 314 (if any) and the compliance certificate
required by Section 314 of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor, the Debt Issuer and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Declaration which
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 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default in respect of
the Preferred Securities and its consequences provided that if the
Event of Default arises out of an Event of Default under the
Indenture:
(i) which is not waivable under the Indenture, the
Event of Default under the Declaration shall also not be
waivable; or
9
<PAGE> 15
(ii) which requires the consent or vote of all or a
Super Majority of the holders of the Notes to be waived under
the Indenture, the Event of Default under the Declaration may
only be waived by the vote of all of the Holders of the
Preferred Securities or such proportion thereof in liquidation
amount as represents the relevant Super Majority of the
aggregate principal amount of Notes outstanding.
Upon such waiver, any such default shall cease to exist, and any
Event of Default with respect to the Preferred Securities arising
therefrom shall be deemed to have been cured, for every purpose of
this Declaration, but no such waiver shall extend to any subsequent
or other default or Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by
the Holders of the Preferred Securities of an Event of Default with
respect to the Preferred Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of any
such Event of Default with respect to the Common Securities.
(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 Event of Default arises out of an Event of Default under the
Indenture:
(i) which 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, the Event of Default under the Declaration is not
waivable; or
(ii) which requires the consent or vote of all or a
Super Majority of the holders of the Notes to be waived under
the Indenture, the Event of Default under the Declaration may
only be waived by the vote of all of the Holders of the
Preferred Securities or such proportion thereof in liquidation
amount as represents the relevant Super Majority of the
aggregate principal amount of the Notes outstanding,
provided that, 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 until all Events of Default with
respect to the Preferred Securities have been cured, waived or
otherwise eliminated and until such Events of Default have been so
10
<PAGE> 16
cured, waived or otherwise eliminated, the Property Trustee will be
deemed to be acting solely on behalf of the Holders of the
Preferred Securities and only the Holders of the Preferred
Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. Subject to the
foregoing proviso, 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 Preferred Securities,
constitutes a waiver of the corresponding Event of Default under
this Declaration.
SECTION 2.7 Event of Default; Notice
(a) The Property Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all
defaults with respect to the Securities known to 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 Notes
or in the payment of any sinking fund installment established for
the Notes, the Property 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 Property Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of
the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 6.01(a)(1) and 6.01(a)(2) of the
Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice or a Responsible
11
<PAGE> 17
Officer charged with the administration of the Declaration
shall have obtained written notice of.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust created hereby shall be known as "Household Capital Trust VI", as such
name may be modified from time to time by the Regular Trustees following written
notice to the Holders of Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o Household International,
Inc., 2700 Sanders Road, Prospect Heights, Illinois 60070. On ten Business Days
written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Securities and use the proceeds from such sale to acquire the Notes, and (b)
except as otherwise limited herein, to enter into such agreements and engage in
only those other activities necessary, or incidental thereto. The Trust shall
not borrow money, issue debt or reinvest proceeds derived from investments,
pledge any of its assets, or otherwise undertake (or permit to be undertaken)
any activity that would cause the Trust to be classified for United States
federal income tax purposes as other than grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the specific
duties of the Property Trustee, the Regular Trustees shall have exclusive and
complete authority to carry out the purposes of the Trust. An action taken by
the Regular Trustees in accordance with their powers shall constitute the act
of and serve to bind the Trust and an action taken by the Property Trustee 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.
12
<PAGE> 18
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Notes and the Property
Account or as otherwise provided in this Declaration, legal title to all assets
of the Trust shall be vested in the Trust. The Holders shall not have legal
title to any part of the assets of the Trust, but shall have an undivided
beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power and authority and duty to
cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however,
that the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities, and,
provided further, there shall be no interests in the Trust other
than the Securities and the issuance of Securities shall be limited
to a one time, simultaneous issuance of both Preferred Securities
and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Securities and Exchange Commission
(the "Commission") the registration statement on Form S-3
prepared by the Sponsor in relation to the Preferred
Securities, including any amendments thereto prepared by the
Sponsor;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor as necessary in
order to qualify or register all or part of the Preferred
Securities in any State in which the Sponsor has determined to
qualify or register such Preferred Securities for sale;
(iii) execute and file an application prepared by the Sponsor
to the New York Stock Exchange or any other national stock
exchange or the NASDAQ National Market for listing upon notice
of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration statement
on Form 8-A prepared by the Sponsor relating to the
registration of the Preferred Securities under Section 12(b)
of the Exchange Act, including any amendments thereto prepared
by the Sponsor; and
13
<PAGE> 19
(v) execute and enter into the Underwriting Agreement providing
for the sale of the Preferred Securities;
(c) to acquire the Notes with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however,
that the Regular Trustees shall cause legal title to the Notes to be
held of record in the name of the Property Trustee for the benefit
of the Holders of the Preferred Securities and the Common
Securities;
(d) to give the Debt Issuer, the Sponsor and the Property Trustee
prompt written notice of the occurrence of a Special Event provided,
that the Regular Trustees shall consult with the Debt Issuer, the
Sponsor and the Property Trustee before taking or refraining from
taking any Ministerial Action in relation to 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
for the purposes of Section 316(c) of the Trust Indenture Act and
with respect to Distributions, voting rights, redemptions and
exchanges, and to issue relevant notices to the Holders of Preferred
Securities and Common Securities as to such actions and applicable
record dates;
(f) to take all actions and perform such duties as may be
required of the Regular Trustees pursuant to the terms of the
Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or
against the Trust ("Legal Action"), unless pursuant to 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 to the Property Trustee required by
Section 314(a)(4) of the Trust Indenture Act which certificate may
be executed by any Regular Trustee;
14
<PAGE> 20
(k) incur expenses which are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Debt Issuer of its
election to defer payments of interest on the Notes by extending the
interest payment period under the Indenture;
(n) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing;
(o) to take all action which 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 Securities or to enable the
Trust to effect the purposes for which the Trust was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, which the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the
activities of the Trust as set out in this Section 3.6 including,
but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment
Company Act;
(ii) causing the Trust to be characterized for United States
federal income tax purposes as other than a grantor trust; and
(iii) cooperating with the Debt Issuer to ensure that the Notes
will be treated as indebtedness of the Debt Issuer for
United States federal income tax purposes, provided that such
action does not adversely affect the interests of Holders; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the Regular
Trustees, on behalf of the Trust.
15
<PAGE> 21
The Regular Trustees must exercise the powers set forth in this Section 3.6 in
a manner which is consistent with the purposes and functions of the Trust set
out in Section 3.3 and the Regular Trustees shall not take any action which is
inconsistent with the purposes and functions of the Trust set forth in Section
3.3. Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Property Trustee set forth in Section 3.8.
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 not:
(i) invest any proceeds received by the Trust from holding the
Notes but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of
the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Notes;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other
than the Securities; or
(vii) (A) direct the time, method and place of exercising any
trust or power conferred upon the Debt Trustee with respect
to the Notes, (B) waive any past default that is
waivable under Section 7.13 of the Indenture, (C) exercise
any right to rescind or annul any declaration that the
principal of all the Notes shall be due and payable or (D)
consent to any amendment, modification or termination of the
Indenture or the Notes, 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
16
<PAGE> 22
federal income tax purposes the Trust will be characterized
as other than a grantor trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Notes shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit
of the Holders of the Securities. The right, title and interest of
the Property Trustee to the Notes shall vest automatically in each
Person who may hereafter be appointed as Property Trustee as set
forth in Section 5.6. Such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed
and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Notes to the Regular 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 bank account (the "Property Account") in the name of
and under the exclusive control of the Property Trustee on
behalf of the Holders of the Securities and, upon the receipt
of payments of funds made in respect of the Notes held by the
Property Trustee, deposit such funds into the Property Account
and make payments to the Holders of the Preferred Securities
and the Common Securities from the Property Account in
accordance with Section 6.1. Funds in the Property Account
shall be held uninvested until disbursed in accordance with
this Declaration. The Property Account shall be an account
which is maintained with a banking institution the rating on
whose long term unsecured indebtedness is at least equal to
the rating assigned to the Preferred Securities by a
"nationally recognized statistical rating organization", as
that term is defined for purposes of Rule 436(g)(2) under the
Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the
Preferred Securities and the Common Securities to the extent
the Notes are redeemed or mature; and
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Preferred Securities and the
Common Securities,
17
<PAGE> 23
engage in such ministerial activities as shall be
necessary or appropriate to effect the distribution of the
Notes to Holders of Securities upon the occurrence of certain
special events (as may be defined in the terms of the
Securities) arising from a change in law or a change in legal
interpretation or other specified circumstances pursuant to
the terms of the Securities;
(d) the Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant
to the terms of the Securities;
(e) the Property Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default or the Property
Trustee's duties and obligations under this Declaration or the Trust
Indenture Act;
(f) the Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders of Securities
pursuant to the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and accepted
that appointment in accordance with Section 5.6;
(g) the Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Notes under the
Indenture and, if an Event of Default occurs and is continuing,
the Property Trustee shall, for the benefit of Holders of the
Securities, enforce its rights as holder of the Notes subject to the
rights of the Holders pursuant to the terms of such Securities;
(h) the Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to either
or both of the Preferred Securities and the Common Securities and
any such Paying Agent shall comply with Section 317(b) of the Trust
Indenture Act. Any Paying Agent may be removed by the Property
Trustee at any time and a successor Paying Agent or additional
Paying Agents may be appointed at any time by the Property Trustee;
and
18
<PAGE> 24
(i) subject to this Section 3.8, the Property Trustee shall have
none of the powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this Section 3.8 in
a manner which is consistent with the purposes and functions of the Trust set
forth in Section 3.3 and the Property Trustee shall not take any action which
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 terms of 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), 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 any Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this
Declaration and in the terms of 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 no
implied covenants or obligations shall be read into this
Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as
to the truth of the statements and the correctness of
the opinions
19
<PAGE> 25
expressed therein, upon any certificates or opinions
furnished to the Property Trustee and conforming to the
requirements of this Declaration; but in the case of
any such certificates or opinions that by any provision
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 Securities at the time
outstanding 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; and
(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 ground for believing that the
repayment of such funds or liability is not reasonably assured
to it under the terms of this Declaration or adequate
indemnity against such risk or liability is not reasonably
assured to it.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may 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
20
<PAGE> 26
believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently
evidenced by a Direction or 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 and, if the Trust is excluded from the
definition of an Investment Company solely by means of Rule
3a-5, subject to the requirements of Rule 3a-5, request and
rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the
Regular Trustees;
(iv) the Property 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 Property Trustee may consult with counsel and
the written 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 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 adequate security
and indemnity which would satisfy a reasonable person in the
position of the Property Trustee, against the costs, expenses
(including attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or
direction, including such reasonable advances as
21
<PAGE> 27
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 or attorneys and the Property Trustee
shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by
it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the
Securities and the signature of the Property Trustee or its
agents alone shall be sufficient and effective to perform any
such action; and no third party shall be required to inquire
as to the authority of the Property Trustee to so act, or as
to its compliance with any of the terms and 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, (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 acting in
accordance with such instructions; and
22
<PAGE> 28
(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 except upon the Direction of the Sponsor or
the Regular Trustees as the case may be.
(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. 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, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Regular Trustees and the Property Trustee described in this Declaration. Except
as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for the
sole and limited purpose of fulfilling the requirements of Section 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents
Unless otherwise determined by the Regular Trustees and except as otherwise
required by the Business Trust Act, a majority of, or if there are only two,
both of the Regular Trustees are authorized to execute on behalf of the Trust
any documents which the Regular Trustees have the power and authority to
execute pursuant to Section 3.6, provided that any listing application prepared
by the Sponsor referred to in Section 3.6(b)(iii) may be executed by any
Regular Trustee.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be taken
as the statements of the Sponsor and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
23
<PAGE> 29
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII hereof,
shall have existence until ________, ____.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to any corporation or other
body, except as described in Section 3.15 (b) and (c).
(b) The Trust may, with the consent of a majority of the Regular
Trustees and without the consent of the Holders of the Securities,
the Delaware Trustee or the Property Trustee, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any state; provided, that:
(i) such successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations of the Trust
under the Preferred Securities; or
(B) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred
Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Preferred
Securities rank with respect to priority of Distributions
and payments upon liquidation, redemption and maturity;
(ii) the Debt Issuer expressly acknowledges a trustee of the Successor
Entity which possess the same powers and duties as the Property
Trustee as the Holder of the Notes;
(iii) the Preferred Securities or any Successor Securities are listed,
or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor
Securities) to be
24
<PAGE> 30
downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of
the Holders of the Preferred Securities (including any
Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the new
entity);
(vi) such successor entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a
nationally recognized independent counsel to the Trust
experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and
privileges of the Holders of the Preferred Securities
(including any Successor Securities) in any material
respect (other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity
will be required to register as an Investment Company;
and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the
extent provided by the Preferred Securities Guarantee;
and
(c) notwithstanding Section 3.15(b), the Trust shall not consolidate,
amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger
or replacement would cause the Trust or Successor Entity for United
States federal income tax purposes to be classified as other than a
grantor trust, except with the consent of Holders of 100% in
liquidation amount of the Securities.
25
<PAGE> 31
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all the Common Securities issued
by the Trust, at the same time as the Preferred Securities are sold, in an
amount equal to 3% of the capital of the Trust.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the Sponsor
shall have the exclusive right and responsibility to engage in the following
activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;
(b) to determine the states in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities
and to take any and all such acts, other than actions which must be
taken by the Trust, and advise the Trust of actions it must take,
and prepare for execution and filing any documents to be executed
and filed by the Trust, as the Sponsor deems necessary or advisable
in order to comply with the applicable laws of any such states;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the
Nasdaq National Market for listing upon notice of issuance of any
Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of
the Preferred Securities under Section 12(b) of the Exchange Act,
including any amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement providing for
the sale of the Preferred Securities.
26
<PAGE> 32
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees shall initially be three (3), and:
(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase the number of Trustees; and
(b) after the issuance of any Securities:
(i) and except as provided in Section 5.1 (b)(ii)and 5.6 (a) (ii)
(B) with respect to the Special Regular Trustee, 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; and
(ii) the number of Trustees shall be increased automatically by one
(1) if an Appointment Event has occurred and is continuing and
the Holders of a Majority in liquidation amount of the
Preferred Securities appoint a Special Regular Trustee in
accordance with Section 5.6,
provided that in any case, the number of Trustees shall be at least three (3)
so long as the Trustee that acts as the Property Trustee also acts as the
Delaware Trustee pursuant to Section 5.2. In the event the Property Trustee is
not also acting as the Delaware Trustee, the number of Trustees shall be at
least five (5).
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
27
<PAGE> 33
requirements of applicable law, then the Property Trustee shall also be
the Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (which may be the
Delaware Trustee) which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any state or
territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or
examination by federal, state, territorial or District of
Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 5.3
(a) (ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus asset
forth in its most recent report of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible to so
act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set out in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Property Trustee and the 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.
28
<PAGE> 34
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause
(i) of the first provision contained in Section 310(b) of the Trust
Indenture Act.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
Each Regular 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 which shall act through one or more Authorized
Officers.
SECTION 5.5 Initial Trustees.
The initial Regular Trustees shall be:
Dennis J. Mickey
2700 Sanders Road
Prospect Heights, Illinois 60070
and
Benjamin B. Moss, Jr.
2700 Sanders Road
Prospect Heights, Illinois 60070
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
------------
------------
------------
The initial Property Trustee should be:
The Bank of New York
------------
------------
------------
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b) Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities;
(A) other than in respect to a Special Regular Trustee, 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
29
<PAGE> 35
(B) if an Appointment Event has occurred and is continuing,
one (1) additional Regular Trustee (the "Special Regular
Trustee") may be appointed by vote of the Holders of a
Majority in liquidation amount of the Preferred
Securities, voting as a class at a meeting of the Holders
of the Preferred Securities and such Special Regular
Trustee may only be removed (otherwise than by the
operation of Section 5.6(c)), by vote of the Holders of a
Majority in liquidation amount of the Preferred
Securities voting as a class at a meeting of the Holders
of the Preferred Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.6(a) until Successor Property Trustee
has been appointed and has accepted such appointment by written
instrument executed by such Successor Property Trustee and delivered
to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with this Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under
Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or
resignation, provided that a Special Regular Trustee shall only hold
office while an Appointment Event is continuing and shall cease to
hold office immediately after the Appointment Event pursuant to which
the Special Regular Trustee was appointed and all other Appointment
Events cease to be continuing. Any Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing signed by the Trustee and delivered to the Sponsor and the
Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective until either:
30
<PAGE> 36
(A) 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) 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; and
(iii) no such resignation of a Special Regular Trustee shall be
effective until the 60th day following delivery of the
instrument of resignation of the Special Regular Trustee to
the Sponsor and the Trust or such later date specified in such
instrument during which period the Holders of the Preferred
Securities shall have the right to appoint a successor Special
Trustee as provided in this Section 5.6.
(d) If no Successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the
Trust of an instrument of resignation, the resigning Property
Trustee or Delaware Trustee may petition any court of competent
jurisdiction for appointment of a Successor Property Trustee or
Successor Delaware Trustee. Such court may thereupon after 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.
SECTION 5.7 Vacancies Among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 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 a majority of the Regular Trustees
shall be conclusive evidence of the existence of such vacancy. The vacancy
shall be filled with a Trustee appointed in accordance with Section 5.6.
31
<PAGE> 37
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee, or
any one of them, shall not operate to annul the Trust. Whenever a vacancy in
the number of Regular Trustees shall occur, until such vacancy is filled by the
appointment of a Regular Trustee in accordance with Section 5.6, the Regular
Trustees in office, regardless of their number, shall have all the powers
granted to the Regular Trustees and shall discharge all the duties imposed upon
the Regular Trustees by this Declaration.
SECTION 5.9 Meetings.
Meetings of the Regular Trustees shall be held from time to time upon the
call of any Regular Trustee. Regular meetings of the Regular Trustees may be
held at a time and place fixed by resolution of the Regular Trustees. Notice
of any in-person meetings of the Regular Trustees shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 48 hours before such meeting. Notice of any
telephonic meetings of the Regular Trustees or any committee thereof shall be
hand delivered or otherwise delivered in writing (including by facsimile, with
a hard copy by overnight courier) not less than 24 hours before a meeting.
Notices shall contain a brief statement of the time, place and anticipated
purposes of the meeting. The presence (whether in person or by telephone) of a
Regular Trustee at a meeting shall constitute a waiver of notice of such
meeting except where a Regular Trustee attends a meeting for the express
purpose of objecting to the transaction of any activity on the ground that the
meeting has not been lawfully called or convened. Unless provided otherwise in
this Declaration, any action of the Regular Trustees may be taken at a meeting
by vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible vote with respect to such matter, provided that a
quorum is present, or without a meeting by the unanimous written consent of the
Regular Trustees.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of
21 his or her power for the purpose of executing any documents
contemplated in Section 3.6 including any registration statement or
amendment thereto filed with the Commission or making any other
governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to time
to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name
of the Trust or the
32
<PAGE> 38
names of the Regular Trustees or otherwise as the Regular Trustees
may deem expedient, to the extent such delegation is not prohibited
by applicable law or contrary to the provisions of the Trust, as
set forth herein.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions in accordance with the applicable terms of
the relevant Holder's Securities. Distributions shall be made on the Preferred
Securities and the Common Securities in accordance with the preferences set
forth in their respective terms. If and to the extent that the Debt Issuer
makes a payment of interest (including Compounded Interest (as defined in the
Indenture)), premium and principal on the Notes held by the Property Trustee
(the amount of any such payment being a "Payment Amount"), the Property Trustee
shall and is directed, to the extent funds are available for that purpose, to
make a Distribution of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall, on behalf of the Trust, issue one class
of preferred securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in
Exhibit A and incorporated herein by reference (the "Preferred
Securities"), and one class of common securities representing
undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Exhibit A and incorporated herein by
reference (the "Common Securities"). The Trust shall have no
securities or other interests in the assets of the Trust other than
the Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by the
Regular Trustees (or if there are more than two Regular Trustees by
any two of the Regular Trustees). Such signatures may be the manual
or facsimile signatures of the present or any future Regular
Trustee. Typographical and other minor errors or defects in any such
reproduction of any such signature shall not affect
33
<PAGE> 39
the validity of any Certificate. In case any Regular Trustee of the
Trust who shall have signed any of the Certificates shall cease to
be such Regular Trustee before the Certificate so signed shall be
delivered by the Trust, such Certificate nevertheless may be
delivered as though the person who signed such Certificate had not
ceased to be such Regular Trustee; and any Certificate may be signed
on behalf of the Trust by such persons who shall at the actual date
of execution of such Security, shall be the Regular Trustees of the
Trust, although at the date of the execution and delivery of the
Declaration any such person was not such a Regular Trustee.
Certificates shall be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the
Regular Trustees, as evidenced by their execution thereof, and may
have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees
may deem appropriate, or as may be required to comply with any law
or with any rule or regulation of any stock exchange on which
Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully
paid and nonassessable.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed
to the terms of, and shall be bound by this Declaration.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall dissolve;
(i) upon the bankruptcy of the Holder of the Common Securities,
the Sponsor or the Debt Issuer;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common Securities,
the Sponsor or the Debt Issuer,
34
<PAGE> 40
the filing of a certificate of cancellation with respect to the
Trust or the revocation of the Holder of the Common Securities,
the Sponsor's or the Debt Issuer's charter and the expiration
of 90 days after the date of revocation without a reinstatement
thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor, the Debt Issuer or
the Trust;
(iv) 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;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in
accordance with the terms of the Securities and all of the
Notes endorsed thereon shall have been distributed to the
Holders of Securities in exchange for all of the Securities; or
(vi) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1 (a), the Trustees shall, after paying or making
reasonable provision for payment of the liabilities of the Trust,
file a certificate of cancellation with the Secretary of State of
the State of Delaware and the Trust shall terminate.
(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.
35
<PAGE> 41
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of
the Sponsor, provided, that, any such transfer is subject to the
condition precedent that the transferor obtain the written opinion
of nationally recognized independent counsel experienced in such
matters that such transfer would not cause more than an
insubstantial risk that:
(i) the Trust would be classified for United States federal income
tax purposes as an association taxable as a corporation or a
partnership and each Holder of Securities would not be treated
as owning an undivided beneficial interest in the Notes; and
(ii) the Trust would be an Investment Company, or would be
controlled by an Investment Company.
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates and of
transfers of Certificates, which will be effected without charge but only upon
payment (with such indemnity as the Regular Trustees may require) in respect of
any tax or other government charges which may be imposed in relation to it.
Upon surrender for registration of transfer of any Certificate, the Regular
Trustees shall cause one or more new Certificates to be issued in the name of
the designated transferee or transferees. Every Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Certificate. By acceptance of a Certificate, each transferee
shall be deemed to have agreed to be bound by this Declaration and the
documents incorporated by reference herein.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on
36
<PAGE> 42
the part of any Person, whether or not the Trustees shall have actual or other
notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities, the
Preferred Securities Certificates, on original issuance, will be issued in the
form of one or more, fully registered, global Preferred Security Certificates
(each a "Global Certificate"), to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered Preferred
Security Certificates (the "Definitive Preferred Security Certificates") have
been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the
Preferred Securities and the sole holder of the Global Certificates
and shall have no obligation to the Preferred Security Beneficial
Owners;
(c) to the extent that the provisions of this Section 9.4 conflict with
any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Preferred
Security Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants. DTC will make book entry transfers
among the Clearing Agency Participants and receive and transmit
payments of Distributions on the Global Certificates to such
Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security Holders is
required under this Declaration, unless and until Definitive Preferred Security
Certificates shall have been issued
37
<PAGE> 43
to the Preferred Security Beneficial Owners pursuant to Section 9.7, the
Regular Trustees shall give all such notices and communications specified herein
to be given to the Preferred Security Holders to the Clearing Agency, and shall
have no notice obligations to the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities, then:
(c) Definitive Preferred Security Certificates shall be prepared by the
Regular Trustees on behalf of the Trust with respect to such
Preferred Securities; and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall
cause Definitive Certificates to be delivered to Preferred Security
Beneficial Owners in accordance with the instructions of the
Clearing Agency. Neither the Trustees nor the Trust shall be liable
for any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on, such
instructions. The Definitive Preferred Security Certificates shall be
printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which Preferred Securities may be listed, or to
conform to usage.
38
<PAGE> 44
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate;
and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them harmless,
then in the absence of notice that such Certificate shall have been
acquired by a bona fide purchaser, any two Regular Trustees on behalf of
the Trust shall execute and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like denomination. In connection with the issuance of any new
Certificate under this Section 9.8, the Regular Trustees may require the
payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate Certificate
issued pursuant to this Section shall constitute conclusive evidence of an
ownership interest in the relevant Securities, as if originally is sued,
whether or not the lost, stolen or destroyed Certificate shall be found at
any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the
Trust; and
(ii) required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise.
39
<PAGE> 45
(b) The Holder of the Common Securities 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 Preferred Securities shall be entitled to the same limitation
of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law
of the State of Delaware.
SECTION 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, in the case of the Property Trustee, negligence) or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person
as to matters the Indemnified Person reasonably believes are within
such other Person's professional or expert competence and who has
been selected with reasonable care by or on behalf of the Trust,
including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any
other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person
acting under this Declaration, subject to any duties or obligations
imposed on the Property Trustee under the Trust Indenture Act and
40
<PAGE> 46
Rule 3a-5, 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 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 here in:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provide 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,
41
<PAGE> 47
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) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the
scope of authority conferred on such Indemnified Person by this
Declaration, except that no Indemnified Person shall be entitled to
be indemnified in respect of any loss, damage or claim incurred by
such Indemnified Person by reason of gross negligence (or, in the
case of the Property Trustee, negligence) or willful misconduct with
respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from
time to time, be advanced by the Sponsor prior to the final
disposition of such claim, demand, action, suit or proceeding upon
receipt by the Sponsor of an undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall be determined
that the Indemnified Person is not entitled to be indemnified as
authorized in Section 10.4(a).
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Debt Issuer, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this 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 Debt
Issuer, 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 Debt Issuer, the
Delaware Trustee and the Property Trustee shall have the right to take for its
own account (individually or
42
<PAGE> 48
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
depository for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or
such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on
the accrual method of accounting, in accordance with generally
accepted accounting principles, consistently applied. The Trust shall
use the accrual method of accounting for United States federal income
tax purposes. The books of account and the records of the Trust shall
be examined by and reported upon as of the end of each Fiscal Year by
a firm of independent certified public accountants selected by the
Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of
each Fiscal Year of the Trust, annual financial statements of the
Trust, including a balance sheet of the Trust as of the end of such
Fiscal Year, and the related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders of Securities, any annual United States
federal income tax information statement, required by the Code,
containing such information with regard to the Securities held by
each Holder as is required by the Code and the Treasury Regulations.
Notwithstanding any right under the Code to deliver any such
statement at a later date, the Regular Trustees shall endeavor to
deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
43
<PAGE> 49
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States
federal income tax return, on a Form 1041 or such other form
required by United States federal income tax law, and any other
annual income tax returns required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for the sole
benefit of the Trust; provided, however, that all payments of funds in respect
of the Notes held by the Property Trustee shall be made directly to the Property
Account and no other funds of the Trust shall be deposited in the Property
Account. The sole signatories for such accounts shall be designated by the
Regular Trustees; provided, however, that the Property Trustee shall designate
the sole signatories for the Property Account.
SECTION 11.4 Withholding.
The Trust and the 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 Trust shall file required forms with applicable jurisdictions
and, unless an exemption from withholding is properly established by a Holder,
shall remit amounts withheld with respect to the Holder to applicable
jurisdictions. To the extent that the Trust is required to withhold and pay over
any amounts to any authority with respect to distributions or allocations to any
Holder, the amount withheld shall be deemed to be a distribution in the amount
of the withholding to the Holder. In the event of any claimed over withholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount 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 be amended
by, and only by, a written instrument
44
<PAGE> 50
approved and executed by the Regular Trustees (or, if there are more
than two Regular Trustees a majority of the Regular Trustees);
provided, however, that:
(i) no amendment shall be made, and any such purported amendment
shall be void and ineffective, to the extent the result
thereof would be to:
(A) cause the Trust to be characterized for purposes of
United States federal income taxation as other than a
grantor trust;
(B) reduce or otherwise adversely affect the rights, powers,
obligations or liabilities of the Property Trustee or
the Delaware Trustee without the written consent of the
affected trustee; or
(C) cause the Trust to be deemed to be an Investment Company
which is required to be registered under the Investment
Company Act;
(ii) at such time after the Trust has issued any Securities which
remain outstanding, any amendment which 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;
(iii) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(iv) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common
Securities; and
(v) 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.
(b) Notwithstanding Section 12.1(a)(ii), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
45
<PAGE> 51
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of
this Declaration;
(iii) to add to the covenants, restrictions or obligations of the
Sponsor; and
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative
body, court, government agency or regulatory authority which
amendment does not have a material adverse effect on the
right, preferences or privileges of the Holders.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of
such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock
exchange on which the Preferred Securities are listed or admitted for
trading. The Regular Trustees shall call a meeting of such class of
Holders, if directed to do so by the Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall
be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the
meeting is to be called. Any Holders of Securities calling a meeting
shall specify in writing the Security Certificates held by the
Holders of Securities exercising the right to call a meeting and only
those 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 7 days
and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of
Securities is permitted or required under this Declaration or
the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such
46
<PAGE> 52
vote, consent or approval may be given at a meeting of the
Holders of Securities. Any action that may be taken at a
meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less
than the minimum amount of Securities in liquidation amount
that would be necessary to authorize or take such action at a
meeting at which all Holders of Securities having a right to
vote thereon were present and voting. Prompt notice of the
taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented
in writing. The Regular Trustees may specify that any written
ballot submitted to the Security Holder for the purpose of
taking any action without a meeting shall be returned to the
Trust within the time specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is
entitled to participate, including waiving notice of any
meeting, or voting or participating at a meeting. No proxy
shall be valid after the expiration of 11 months from the date
thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided here in, all
matters relating to the giving, voting or validity of proxies
shall be governed by the General Corporation Law of the State
of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that
the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities or the listing rules of any stock exchange on
which the Preferred Securities are then listed or trading
otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the
time, place or purpose of any meeting at which any matter is
to be voted on
47
<PAGE> 53
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
SECTION 13.1 Representations and Warranties of Property Trustee.
The Trustee which 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 Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing under
the laws of the State of Delaware, with trust power and authority to
execute and deliver, and to carry out and perform its obligations
under the terms of, the Declaration.
(b) The execution, delivery and performance by the Property Trustee of
the Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been
duly executed and delivered by the Property Trustee, and it
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered
in a proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of
the Certificate of Incorporation or By-laws of the Property Trustee.
(d) 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
the Declaration.
48
<PAGE> 54
(e) The Property Trustee, pursuant to the Declaration, shall hold legal
title and a valid ownership interest in the Notes under the law of
its place of incorporation and Delaware law.
(f) The Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and the Declaration. The Declaration
under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity
or at law).
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly signed
by the party giving such notice, and shall be delivered, telecopied or mailed
by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust
may give notice of to the Holders of the Securities):
Household Capital Trust VI
2700 Sanders Road
Prospect Heights, Illinois 60070
Attention: Treasurer
(b) if given to the Property Trustee, at the mailing address set forth
below (or such other address as the Property Trustee may give notice
of to the Holders of the Securities):
The Bank of New York
____________________________
____________________________
____________________________
49
<PAGE> 55
(c) 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):
Household International, Inc.
2700 Sanders Road
Prospect Heights, Illinois 60070
Attention: Treasurer
(d) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices shall be deemed to have been given when received in person,
telecopied with receipt confirmed, or mailed by first class mail, postage
prepaid except that if a notice or other document is refused delivery or cannot
be delivered because of a changed address of which no notice was given, such
notice or other document shall be deemed to have been delivered on the date of
such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be governed by
and interpreted in accordance with the laws of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to principles
of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust not be characterized
for United States federal income tax purposes as an association taxable as a
corporation or a partnership but rather, the Trust be characterized as a
grantor trust or otherwise in a manner that each Holder of Securities be
treated as owning an undivided beneficial interest in the Notes. The provisions
of this undivided beneficial interest in the Notes. The provisions of this
Declaration shall be interpreted to further this intention of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is named or
50
<PAGE> 56
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such provision to
any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the signature page
and this Declaration may be executed by the affixing of the signature of each
of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have
the same force and effect as though all of the signers had signed a single
signature page.
51
<PAGE> 57
IN WITNESS WHEREOF, the undersigned has caused these presents to be executed as
of the day and year first above written.
------------------------------------
Dennis J. Mickey,
as Trustee
------------------------------------
Benjamin B. Moss Jr.,
as Trustee
The Bank of New York,
as Trustee and as Property Trustee
By:
------------------------------------
Name:
Title:
Household International, Inc.,
as Sponsor
By:
------------------------------------
Name: John W. Blenke
Title: Vice President-Corporate Law
52
<PAGE> 58
EXHIBIT A
TERMS OF
_______% TRUST PREFERRED SECURITIES
_______% TRUST COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust, dated
as of ________________, 2001 (as amended from time to time, the "Declaration"),
the designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Preferred Securities and the Common Securities are set
out below (each capitalized term used but not defined herein has the meaning
set forth in the Declaration or, if not defined in such Declaration, as defined
in the Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust
of $______________ and a liquidation amount with respect to the
assets of the Trust of $25 per Preferred Security, are hereby
designated for the purposes of identification only as "____% Trust
Preferred Securities" (the "Preferred Securities"). The Preferred
Security Certificates evidencing the Preferred Securities shall be
substantially in the form attached hereto as Annex I, with such
changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice or to conform to the
rules of any stock exchange on which the Preferred Securities are
listed.
(b) Common Securities. Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust
of $__________________ and a liquidation amount with respect to the
assets of the Trust of $__ per Common Security, are hereby
designated for the purposes of identification only as "_____% Trust
Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially
in the form attached hereto as Annex II,
1
<PAGE> 59
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 _____% (the "Coupon Rate") of the stated
liquidation amount of $25 per Security, such rate being the rate of
interest payable on the Notes to be held by the Property Trustee.
Distributions in arrears for more than one quarter will bear interest
thereon, compounded quarterly at the Coupon Rate (to the extent
permitted by applicable law). The term "Distributions" as used herein
includes such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Notes held by the Property
Trustee. The amount of Distributions payable for any period will be
computed (i) for any full 90-day quarterly Distribution period, on
the basis of a 360-day year of twelve 30-day months and (ii) for any
period shorter than a full 90-day quarterly Distribution period for
which Distributions are computed, on the basis of a 30-day month, and
for periods of less than a month, the actual number of days elapsed
per 30-day month.
(b) Distributions on the Securities will be cumulative, will
accrue from _______________, 2001 and will be payable quarterly in
arrears, on ___________, ____________, ____________, and ___________
of each year, commencing on ____________, 2001, except as otherwise
described below. The Debt Issuer has the right under the Indenture to
defer payments of interest by extending the interest payment period
from time to time on the Notes for a period not exceeding 20
consecutive quarters (each, an "Extension Period") and, as a
consequence of such extension, Distributions will also be deferred.
No Extension Period will extend beyond the maturity date for the
Notes. Despite such deferral, quarterly Distributions will continue
to accrue with interest thereon (to the extent permitted by
applicable law) at the Coupon Rate during any such Extension Period.
Prior to the termination of any such Extension Period, the Debt
Issuer may further extend such Extension Period; provided that such
Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters and
provided further that no Extension Period may extend beyond the
maturity date for the Notes. Payments of accrued Distributions will
be payable to Holders as they appear on the books and records of the
Trust on the first record date after the end of the
2
<PAGE> 60
Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debt Issuer may commence a
new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the
relevant record dates. While the Preferred Securities remain in
book-entry only form, the relevant record dates shall be one Business
Day prior to the relevant payment dates which payment dates
correspond to the interest payment dates on the Notes. Subject to any
applicable laws and regulations and the provisions of the
Declaration, each such payment in respect of the Preferred Securities
will be made as described under the heading "Description of the
Preferred Securities -- Book-Entry Only Issuance - The Depository
Trust Company" in the Prospectus dated ___________, (the
"Prospectus"), included in the Registration Statement on Form S-3 of
the Sponsor, the Debt Issuer and the Trust. The relevant record
dates for the Common Securities, and if the Preferred Securities
shall not continue to remain in book-entry only form, the relevant
record dates for the Preferred Securities, shall conform to the rules
of any securities exchange on which the securities are listed and, if
none, shall be selected by the Regular Trustees, which dates shall be
at least one Business Day but less than 60 Business Days before the
relevant payment dates which payment dates correspond to the interest
payment dates on the Notes. Distributions payable on any Securities
that are not punctually paid on any Distribution payment date as a
result of the Debt Issuer or the Sponsor having failed to make a
payment under the Notes, will cease to be payable to the Person in
whose name such Securities are registered on the relevant record
date, and such defaulted Distribution will instead be payable to the
Person in whose name such Securities are registered on the special
record date or other specified date determined in accordance with the
Indenture. If any date on which Distributions are payable on the
Securities is not a Business Day, then payment of the Distribution
payable on such date will be made on the next succeeding day that is
a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force
and effect as if made on such date.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for
3
<PAGE> 61
hereunder, such property shall be distributed Pro Rata (as defined
herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up or
termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities after satisfaction of liabilities to creditors, an amount equal to
the aggregate of the stated liquidation amount of $25 per Security plus
accrued and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
dissolution, winding-up or termination, Notes in an aggregate principal amount
equal to the aggregate stated liquidation amount of such Securities, with an
interest rate equal to the Coupon Rate of, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on, such
Securities, shall be distributed on a Pro Rata basis to the Holders of the
Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by
the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Notes in whole or in part, whether at
maturity or upon redemption, the proceeds from such repayment or
payment shall be simultaneously applied to redeem Securities having
an aggregate liquidation amount equal to the aggregate principal
amount of the Notes so repaid or redeemed at a redemption price of
$25 per Security plus an amount equal to accrued and unpaid
Distributions thereon to the date of the redemption, payable in cash
(the "Redemption Price"). Holders will be given not less than 30 nor
more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as
described in Section 4(f)(ii) below.
(c) If, at any time, a Tax Event or an Investment Company Event (each as
defined below, and each a "Special Event")
4
<PAGE> 62
shall occur and be continuing, the Regular Trustees shall dissolve
the Trust and, after satisfaction of creditors, cause Notes held by
the Property Trustee, having an aggregate principal amount equal to
the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on and having the same
record date for payment as the Securities to be distributed to the
Holders of the Securities in liquidation of such Holders' interests
in the Trust on a Pro Rata basis, within 90 days following the
occurrence of such Special Event (the "90 Day Period"), provided,
however, that in the case of the occurrence of a Tax Event, as a
condition of such dissolution and distribution, the Regular Trustees
shall have received an opinion of a nationally recognized independent
tax counsel experienced in such matters (a "No Recognition Opinion"),
which opinion may rely on published revenue rulings of the Internal
Revenue Service, to the effect that the Holders of the Securities
will not recognize any gain or loss for United States federal income
tax purposes as a result of the dissolution of the Trust and the
distribution of Notes and provided, further, that, if at the time
there is available to the Trust the opportunity to eliminate, within
the 90 Day Period, the Special Event by taking some ministerial
action, such as filing a form or making an election, or pursuing some
other similar reasonable measure that has no adverse effect on the
Trust, the Debt Issuer, the Sponsor or the Holders of the Securities
("Ministerial Action"), the Trust will pursue such Ministerial Action
in lieu of dissolution. In addition, if a Tax Event shall occur and
be continuing, the Debt Issuer has the right to advance the maturity
date of the Notes to the minimum extent required in order to permit
payments of interest on the Notes to be deductible by the Debt Issuer
for United States federal income tax purposes, but the resulting
maturity may not be less than 15 years from the original issuance of
the Notes. The Debt Issuer may take such action only if nationally
recognized independent tax counsel to the Debt Issuer experienced in
such matters has delivered an opinion, which opinion may rely on
published revenue rulings of the Internal Revenue Service, to the
effect that (i) after advancing the maturity of the Notes, interest
payments on the Notes will be deductible for United States federal
income tax purposes and (ii) advancing the maturity date of the Notes
will not result in a taxable event to holders of the Preferred
Securities.
If, in the case of the occurrence of a Tax Event (i) the Debt Issuer
has received an opinion (a "Redemption Tax
5
<PAGE> 63
Opinion") of a nationally recognized independent tax counsel
experienced in such matters that, as a result of a Tax Event, there
is more than an insubstantial risk that the Debt Issuer would be
precluded from deducting the interest on the Notes for United States
federal income tax purposes even if the Notes were distributed to the
Holders of Securities in liquidation of such Holders' interests in
the Trust as described in this Section 4(c), or (ii) the Regular
Trustees shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, the Debt Issuer
shall have the right at any time, upon not less than 30 nor more than
60 days notice, to redeem the Notes in whole or in part for cash
within 90 days following the occurrence of such Tax Event, and
following such redemption, Securities with an aggregate liquidation
amount equal to the aggregate principal amount of the Notes so
redeemed shall be redeemed by the Trust at the Redemption Price on a
Pro Rata basis; provided, however, that, if at the time there is
available to the Trust the opportunity to eliminate, within such 90
day period, the Tax Event by taking some Ministerial Action, the
Trust or the Debt Issuer will pursue such Ministerial Action in lieu
of redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the
effect that on or after the date of the Prospectus, 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 therefore or
therein, or (b) any amendment to, or change in, an interpretation or
application of any such laws or regulations by any legislative body,
court, governmental agency or regulatory authority, which amendment
or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which
action is taken, in each case on or after the date of the Prospectus,
there is more than an insubstantial risk that (i) the Trust is or
will be within 90 days of the date thereof, subject to United States
federal income tax with respect to interest accrued or received on
the Notes, (ii) the Trust is, or will be within 90 days of the date
thereof, subject to more than a de minimis amount of taxes, duties or
other governmental charges, or (iii) interest payable by the Debt
Issuer to the Trust on the Notes is not, or within 90 days of the
date thereof will not be, deductible, in whole or in part, by the
Debt Issuer for United States federal income tax purposes.
6
<PAGE> 64
"Investment Company Event" means that the Regular Trustees shall
have received an opinion of a nationally recognized independent
counsel experienced in practice under the Investment Company Act
that, as a result of the occurrence of a change in law or regulation
or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law"), the Trust is or
will be considered an Investment Company which is required to be
registered under the Investment Company Act, which Change in 1940 Act
Law becomes effective on or after the date of the Prospectus
Supplement.
On and from the date fixed by the Regular Trustees for any
distribution of Notes and dissolution of the Trust: (i) the
Securities will no longer be deemed to be outstanding, (ii) The
Depository Trust Company (the "Depository") or its nominee (or any
successor Clearing Agency or its nominee), as the record Holder of
the Preferred Securities, will receive a registered global
certificate or certificates representing the Notes and the Note
Guarantee to be delivered upon such distribution and any certificates
representing Securities, except for certificates representing
Preferred Securities held by the Depository or its nominee (or any
successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Notes having an aggregate
principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued
and unpaid interest equal co accrued and unpaid Distributions on such
Securities until such certificates are presented to the Debt Issuer
or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or
before the date of redemption.
(e) If the Notes are distributed to holders of the Securities, pursuant
to the terms of the Indenture, the Debt Issuer will use its best
efforts to have the Notes listed on the New York Stock Exchange or on
such other exchange as the Preferred Securities were listed
immediately prior to the distribution of the Notes.
(f) "Redemption or Distribution Procedures."
7
<PAGE> 65
(i) Notice of any redemption of, or notice of distribution of
Notes in exchange for the Securities (a "Redemption/
Distribution Notice") will be given by the Trust by mail
to each Holder of Securities to be redeemed or exchanged not
fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the
Notes. For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are
given pursuant to this Section 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 of Securities. Each Redemption/
Distribution Notice shall be addressed to the Holders of
Securities at the address of each such Holder appearing in the
books and records of the Trust. No defect in the Redemption/
Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the
redemption or exchange proceedings with respect to any
other Holder.
(ii) In the event that fewer than all the outstanding Securities
are to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Securities, it being
understood that in respect of Preferred Securities registered
in the name of and held of record by DTC (or a successor
clearing agency) or any other Nominee, the distribution of the
proceeds of such redemption will be made to each Clearing
Agency Participant (or person on whose behalf such nominee
holds such securities) in accordance with the procedures
applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice which notice may only be issued
if the Notes are redeemed as set out in this Section 4 (which
notice will be irrevocable) then (A) while the Preferred
Securities are in book entry only form, with respect to the
Preferred Securities, by 12:00 noon, New York City time, on the
redemption date, provided that the Debt Issuer has paid the
Property Trustee a sufficient amount of cash in connection with
the related redemption or maturity of the Notes, the Property
Trustee will deposit irrevocably with the Depository (or
successor Clearing Agency) funds sufficient to pay the
applicable Redemption Price with respect to the
8
<PAGE> 66
Preferred Securities and will give the Depository irrevocable
instructions and authority to pay the Redemption Price to the
Holders of the Preferred Securities, and (B) if the Preferred
Securities are issued in definitive form, with respect to the
Preferred Securities, and with respect to the Common
Securities, provided that the Debt Issuer has paid the Property
Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Notes, the Property
Trustee will pay the relevant Redemption Price to the Holders
of such Securities by check mailed to the address of the
relevant Holder appearing on the books and records of the Trust
on the redemption date. If a Redemption/Distribution Notice
shall have been given and funds deposited as required, if
applicable, then immediately prior to the close of business on
the date of such deposit, or on the redemption date, as
applicable, Distributions will cease to accrue on the
Securities so called for redemption and all rights of Holders
of such Securities so called for redemption will cease, except
the right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption
Price. Neither the Regular Trustees nor the Trust shall be
required to register or cause to be registered the transfer of
any Securities which have been so called for redemption. 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 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 accrue, 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.
(iv) Redemption/Distribution Notices shall be sent by
the Regular Trustees on behalf of the Trust to (A) in respect
of the Preferred Securities, the
9
<PAGE> 67
Depository or its nominee (or any successor Clearing Agency or
its nominee) if the Global Certificates have been issued or
if Definitive Preferred Security Certificates have been issued,
to the Holder thereof, and (B) in respect of the Common
Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws),
provided the acquirer is not the Holder of the Common
Securities or the obligor under the Indenture, the Sponsor or
any of its subsidiaries may at any time and from time to time
purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Section 5(b) and as otherwise required by law
and the Declaration, the Holders of the Preferred Securities will have no
voting rights.
(b) If (i) the Trust fails to make Distributions in full on the Preferred
Securities for six consecutive quarterly Distribution periods (other than
during an Extension Period), or (ii) an Event of Default occurs and is
continuing (each of (i) and (ii) being an "Appointment Event"), then the Holders
of the Preferred Securities, acting as a single class, will be entitled by the
vote of a Majority in liquidation amount of the Preferred Securities to appoint
a Special Regular Trustee in accordance with Section 5.6(a)(ii)(B) of the
Declaration. Any Holder of Preferred Securities (other than the Sponsor, or any
entity directly or indirectly controlling or controlled by or under direct or
indirect common control with the Sponsor) will be entitled to nominate any
person to be appointed as Special Regular Trustee. For purposes of determining
whether the Trust has failed to make Distributions in full for six consecutive
quarterly Distribution periods, Distributions shall be deemed to remain in
arrears, notwithstanding any payments in respect thereof, until full cumulative
Distributions have been or contemporaneously are paid with respect to all
quarterly Distribution periods terminating on or prior to the date of payment
of such cumulative Distributions.
Not later than 30 days after such right to appoint a Special Regular
Trustee arises, the Regular Trustees will convene a meeting for the purpose of
appointing a Special Regular Trustee. If the Regular Trustees fail to convene
such meeting within such 30-day period, the Holders of 10% in liquidation
amount of the Preferred Securities will be entitled to convene such meeting in
accordance with Section 12.2 of the Declaration. The record date for such
meeting will be the close of business on the Business Day which is one Business
Day before the day on which notice of the meeting is
10
<PAGE> 68
sent to Holders. The provisions of the Declaration relating to the convening and
conduct of the meetings of the Holders will apply with respect to any such
meeting.
A Special Regular Trustee may be removed without cause at any time by vote
of the Holders of a Majority in liquidation amount of the Preferred Securities
at a meeting of the Holders of the Preferred Securities in accordance with
Section 5.6(a)(ii)(B) of the Declaration.
The Holders of 10% in liquidation amount of the Preferred Securities will
be entitled to convene such a meeting in accordance with Section 12.2 of the
Declaration. The record date for such meeting will be the close of business on
the Business Day which is one Business Day before the day on which the notice
of meeting is sent to Holders. Notwithstanding the appointment of a Special
Regular Trustee, the Debt Issuer shall retain all rights under the Indenture,
including the right to extend the interest payment period on the Notes.
Subject to the requirements of the second to last sentence of this
paragraph, the Holders of a Majority in liquidation amount of the Preferred
Securities, voting separately as a class may direct 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 the
Declaration, including (i) directing the time, method, place of conducting
any proceeding for any remedy available to the Note Trustee, or executing any
trust or power conferred on the Note Trustee with respect to the Notes, (ii)
waive any past default and its consequences that is waivable under Section 7.13
of the Indenture, (iii) exercise any right to rescind or annul a declaration
that the principal of all the Notes shall be due and payable, or (iv) consent to
any amendment, modification or termination of the Indenture or the Notes, where
such consent shall be required, provided, however, that where a Super Majority
of the holders of the Notes is required, the Property Trustee may only give such
consent at the direction of the Holders of at least the proportion in
liquidation amount of the Preferred Securities which the relevant Super Majority
represents of the aggregate principal amount of the Notes. The Property Trustee
shall not revoke any action previously authorized or approved by a vote of the
Holders of the Preferred Securities. Other than with respect to directing the
time, method and place of conducting any remedy available to the Property
Trustee or the Note Trustee as set forth above, the Property Trustee shall not
take any action in accordance with the directions of the Holders of the
Preferred Securities under this paragraph unless the Property Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust. If the Property Trustee fails to enforce its rights under the
Declaration, any Holder of Preferred Securities
11
<PAGE> 69
may, to the extent permissible by applicable law, after a period of 30 days has
elapsed from such holder's written request to the Property Trustee to enforce
such rights, 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.
Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to
vote or of such matter upon which written consent is sought and (iii)
instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Notes in accordance with the Declaration and the terms of the
Securities.
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Sponsor, or by any entity directly or
indirectly controlling or controlled by or under direct or indirect common
control with 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 Section 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) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of
Trustees, subject to the exclusive right of the Holders of the
Preferred Securities to appoint, remove or replace a Special Regular
Trustee.
(c) Subject to Section 2.6 of this Declaration and only after
12
<PAGE> 70
the Event of Default with respect to the Preferred Securities have
been cured, waived, or otherwise eliminated, and subject to the
requirements of the second to last sentence of this paragraph, the
Holders of a Majority in liquidation amount of the Common Securities,
voting separately as a class may direct the time, method, and place
of conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property
Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available
to the Note Trustee, or executing any trust or power conferred on the
Note Trustee with respect to the Notes, (ii) waive any past default
and its consequences that is waivable under Section 7.13 of the
Indenture, (iii) exercise any right to rescind or annul a declaration
that the principal of all the Notes shall be due and payable, or (iv)
consent to any amendment, modification or termination of the
Indenture or the Notes, where such consent shall be required,
provided, however, that where a consent under the Indenture would
require the consent of greater than a majority of the Holders in
principal amount of Notes affected thereby (a "Super Majority"),the
Property Trustee may only give such consent at the direction of the
Holders of at least the proportion in liquidation amount of the
Common Securities which the relevant Super Majority represents of the
aggregate principal amount of the Notes outstanding. The Property
Trustee shall not revoke any action previously authorized or approved
by a vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting any
remedy available to the Property Trustee or the Note Trustee as set
forth above, the Property Trustee shall not take any action in
accordance with the directions of the Holders of the Common
Securities under this paragraph unless the Property Trustee has
obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust. If the Property Trustee
fails to enforce its rights under the Declaration, any Holder of
Common Securities may, after a period of 30 days has elapsed from
such holder's written request to the Property Trustee to enforce such
rights, 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.
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
13
<PAGE> 71
Securities in the Trust or pursuant to written consent. The Regular Trustees
will cause a notice of any meeting at which Holders of Common Securities are
entitled to vote, or of any matter upon which action by written consent of such
Holders is to be taken, to be mailed to each Holder of record of Common
Securities. Each such notice will include a statement setting forth (i) the date
of such meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written consent
is sought and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Notes in accordance with the Declaration and the terms of the Securities.
7. Amendments to Declaration and Indenture.
(a) If any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action
that would adversely affect the powers, preferences or special
rights of the Securities, whether by way of amendment to the
Declaration or otherwise, or (ii) the dissolution, winding-up or
termination of the Trust, other than as described in Section 8.1 of
the Declaration, then the Holders of outstanding Securities as a
class, will be entitled to vote on such amendment or proposal (but
not on any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of the
Holders of at least 66-2/3% in liquidation amount of the Securities,
voting together as a single class provided, however, that the rights
Holders of Preferred Securities under Article V of the Declaration
to appoint, remove or replace a Special Regular Trustee shall not
amended without the consent of each Holder of Preferred Securities,
provided, however, if any amendment or proposal referred to in
clause (i) above would adversely affect only the Preferred
Securities or the Common Securities, only the affected class will be
entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of 66 2/3%
in liquidation amount of such class of securities.
(b) In the event the consent of the Property Trustee as the
holder of the Notes is required under the Indenture with respect to
any amendment, modification or termination of the Indenture or the
Notes, the Property Trustee shall request the direction of the
Holders of the Securities with respect to such amendment,
modification or
14
<PAGE> 72
termination and shall vote with respect to such amendment,
modification or termination as directed by a Majority in liquidation
amount of the Securities voting together as a single class; provided,
however, that where a consent under the Indenture would require the
consent of a Super Majority, the Property Trustee may only give such
consent at the direction of the Holders of at least the proportion in
liquidation amount of the Securities which the relevant Super
Majority represents of the aggregate principal amount of the Notes
outstanding provided, further, that the Property Trustee shall not
take any action in accordance with the directions of the Holders of
the Securities under this Section 7(b) unless the Property Trustee
has obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust.
8. Pro Rata.
A reference in these terms of the Securities to any payment, distribution
or treatment as being "Pro Rata" shall mean pro rata to each Holder of
Securities according to the aggregate liquidation amount of the Securities held
by the relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Indenture has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate
liquidation amount of Common Securities held by the relevant Holder relative to
the aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pari pasu and payment thereon shall be made
Pro Rata with the Common Securities except that where an Event of Default
occurs and is continuing under the Indenture in respect of the Notes held by
the Property Trustee, the rights of Holders of the Common Securities to payment
in respect of Distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights to payment of the Holders of the
Preferred Securities.
15
<PAGE> 73
10. Listing.
The Regular Trustees shall use their best efforts to cause the Preferred
Securities to be listed for quotation on the New York Stock Exchange.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to subscribe
for any additional Securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Regular Trustees will provide a copy of the Declaration, the Preferred
Securities Guarantee and the Indenture to a Holder without charge on written
request to the Trust at its principal place of business.
16
<PAGE> 74
Annex I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository.
This Preferred Security is exchangeable for Preferred Securities registered in
the name of a person other than the Depository or its nominee only in the
limited circumstances described in the Declaration and no transfer of this
Preferred Security (other than a transfer of this Preferred Security as a whole
by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
the Trust or its agent for registration of transfer, exchange or payment, and
any Preferred Security issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number Number of Preferred Securities
CUSIP NO. ___________________
Certificate Evidencing Preferred Securities
of
HOUSEHOLD PREFERRED TRUST VI
Preferred Securities.
(Liquidation Amount $25 per Preferred Security)
Household Capital Trust VI, a business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that _____________ (the
"Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the _____% Trust Preferred Securities (liquidation amount $25 per
Preferred Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and
A-1
<PAGE> 75
provisions of the Preferred Securities represented hereby are issued and shall
in all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of ______________, as the same may be
amended from time to time (the "Declaration") including the designation of the
terms of the Preferred Securities as set forth in Exhibit A to the Declaration.
Capitalized terms used herein but not defined shall have the meaning given them
in the Declaration. The Holder is entitled to the benefits of the Preferred
Securities Guarantee to the extent provided therein. The Trust will provide a
copy of the Declaration, the Preferred Securities Guarantee and the Indenture to
a Holder without charge upon written request to the Trust at its principal place
of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat the Notes as indebtedness and the
Preferred Securities as evidence of indirect beneficial ownership in the Notes.
IN WITNESS WHEREOF, the Trust has executed this
certificate this ______ day of , 200_.
[ ]
as Trustee
____________________________
[ ]
as Trustee
____________________________
A-2
<PAGE> 76
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfer this Preferred
Security Certificate to:
_____________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_______________(Insert assignee's social security of tax identification number)
_____________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________________
(Insert address and zip code of assignee) and irrevocably appoint)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_________________________________________ agent to transfer this Preferred
Security Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date:__________________________________________________
Signature:_____________________________________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
A-3
<PAGE> 77
Annex II
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
HOUSEHOLD CAPITAL TRUST VI
Common Securities
(Liquidation Amount $25 per Common Security)
Household Capital Trust VI, a business trust formed 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 _______% Trust
Common Securities (liquidation amount $25 per Common Security) (the "Common
Securities"). The Common Securities are transferable on the books and records of
the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of ___________, 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 Exhibit A to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Common Securities Guarantee to the
extent provided therein. The Trust will provide a copy of the Declaration, the
Common Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration and is
entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat the Notes as indebtedness and the
Common Securities as evidence of indirect beneficial ownership in the Notes.
IN WITNESS WHEREOF, the Trust has executed this certificate this day of
_____, 2001.
[ ]
as Trustee
_______________________________
[ ]
as Trustee
_______________________________
A-4
<PAGE> 78
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfer this Common
Security Certificate to:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_______________(Insert assignee's social security of tax identification number)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________________
(Insert address and zip code of assignee) and irrevocably appoint)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_________________________________________ 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)
A-5
<PAGE> 79
EXHIBIT B
SPECIMEN OF NOTE
<PAGE> 80
EXHIBIT C
UNDERWRITING AGREEMENT
