<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 6, 1997
REGISTRATION NO.333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C>
TRENWICK GROUP INC. TRENWICK CAPITAL TRUST I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS TRUST AGREEMENT)
DELAWARE DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
6719 6719
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
06-1152790 06-6442139
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
------------------------
METRO CENTER
ONE STATION PLACE
STAMFORD, CONNECTICUT 06902
(203) 353-5500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
JANE T. WIZNITZER
VICE PRESIDENT-LEGAL AFFAIRS AND SECRETARY
TRENWICK GROUP INC.
METRO CENTER
ONE STATION PLACE
STAMFORD, CONNECTICUT 06902
(203) 353-5510
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENTS FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C> <C>
JAMES R. CAMERON, ESQ. MICHAEL B. TUMAS, ESQ. JONATHAN L. FREEDMAN, ESQ.
BAKER & MCKENZIE POTTER ANDERSON & CORROON DEWEY BALLANTINE
805 THIRD AVENUE 902 MARKET STREET 1301 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10022 350 DELAWARE TRUST BUILDING NEW YORK, NEW YORK 10019-6092
WILMINGTON, DELAWARE 19801
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT OFFERING PRICE AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED UNIT(1)(2)(3) PRICE(1) FEE(2)(3)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
8.82% Exchange Subordinated Capital Income
Securities of Trenwick Capital Trust I,
Liquidation Amount $1,000 per Capital
Security(4).................................... $110,000,000 100% $110,000,000 $33,334
- ------------------------------------------------------------------------------------------------------------------------
8.82% Exchange Junior Subordinated Deferrable
Interest Debentures of Trenwick Group Inc.
(2)........................................... (2) (2) (2) (2)
- ------------------------------------------------------------------------------------------------------------------------
Exchange Guarantee by Trenwick Group Inc. with
respect to the 8.82% Exchange Subordinated
Capital Income Securities(3)(4)............... (3) (3) (3) (3)
- ------------------------------------------------------------------------------------------------------------------------
Total........................................... $110,000,000(4) 100% $110,000,000(5) $33,334
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
(1) Estimated for the sole purpose of computing the registration fee. Pursuant
to Rule 457(n) under the Securities Act, no separate fee is payable with
respect to the Exchange Capital Securities Guarantee of Trenwick Group, Inc.
(the "Exchange Guarantee").
(2) No separate consideration will be received for the Exchange Junior
Subordinated Deferrable Interest Debentures of Trenwick Group Inc. (the
"Exchange Junior Subordinated Debentures") distributed upon any liquidation
of Trenwick Capital Trust I.
(3) No separate consideration will be received for the Exchange Guarantee. See
Note (1).
(4) This Registration Statement (as the same may be amended from time to time,
(the "Registration Statement")) is deemed to cover rights of holders of
Exchange Junior Subordinated Debentures under the Indenture, the rights of
holders of Exchange Subordinated Capital Income Securities of Trenwick
Capital Trust I under the Amended and Restated Declaration of Trust, the
rights of holders of such Exchange Subordinated Capital Income Securities
under the Trenwick Group Inc. Exchange Guarantee and certain backup
undertakings as described herein.
(5) Such amount represents the liquidation amount of the Trenwick Capital Trust
I Exchange Subordinated Capital Income Securities to be exchanged hereunder
and the principal amount of Exchange Junior Subordinated Debentures that may
be distributed to holders of such Exchange Subordinated Capital Income
Securities upon any liquidation of Trenwick Capital Trust I.
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
PROSPECTUS
SUBJECT TO COMPLETION, DATED JUNE 6, 1997
TRENWICK CAPITAL TRUST I
OFFER TO EXCHANGE ITS
8.82% EXCHANGE SUBORDINATED CAPITAL INCOME SECURITIES
(LIQUIDATION AMOUNT $1,000 PER EXCHANGE CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, FOR ANY AND ALL OF ITS OUTSTANDING
8.82% SUBORDINATED CAPITAL INCOME SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY
TRENWICK GROUP INC.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED.
------------------------
Trenwick Capital Trust I, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby offers, upon the terms and
subject to the conditions set forth in this Prospectus (as the same may be
amended or supplemented from time to time, the "Prospectus") and in the
accompanying Letter of Transmittal (which together constitute the "Exchange
Offer"), to exchange up to $110,000,000 aggregate Liquidation Amount, determined
on the basis of $1,000 per Subordinated Capital Income Security ("Liquidation
Amount") of its 8.82% Exchange Subordinated Capital Income Securities (the
"Exchange Capital Securities"), which have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), pursuant to a Registration
Statement of which this Prospectus constitutes a part, for a like Liquidation
Amount of its outstanding 8.82% Subordinated Capital Income Securities (the "Old
Capital Securities"), of which $110,000,000 aggregate Liquidation Amount is
outstanding. Pursuant to the Exchange Offer, Trenwick Group Inc., a Delaware
corporation (the "Company"), is also offering to exchange (i) its guarantee of
payments of cash distributions and payments on liquidation of the Trust or
redemption of the Old Capital Securities, to the extent the Trust has funds
legally available therefor (the "Old Guarantee"), for a like guarantee in
respect of the Exchange Capital Securities (the "Exchange Guarantee") and (ii)
all of its 8.82% Junior Subordinated Deferrable Interest Debentures due February
1, 2037 (the "Old Junior Subordinated Debentures") for a like aggregate
principal amount of its 8.82% Exchange Junior Subordinated Deferrable Interest
Debentures due February 1, 2037 (the "Exchange Junior Subordinated Debentures"),
corresponding to the aggregate Liquidation Amount of the Exchange Capital
Securities which Exchange Guarantee and Exchange Junior Subordinated Debentures
also have been registered under the Securities Act. The Old Capital Securities,
the Old Guarantee and the Old Junior Subordinated Debentures collectively, are
referred to herein as the "Old Securities" and the Exchange Capital Securities,
the Exchange Guarantee and the Exchange Junior Subordinated Debentures
collectively, are referred to herein as the "Exchange Securities."
(Continued on the following page)
SEE "RISK FACTORS" COMMENCING ON PAGE 10 FOR CERTAIN INFORMATION THAT
SHOULD BE CONSIDERED BY HOLDERS IN DECIDING WHETHER TO TENDER OLD CAPITAL
SECURITIES IN THE EXCHANGE OFFER.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is , 1997.
<PAGE> 3
(Continued from the previous page)
The terms of the Exchange Securities are identical in all material respects
to the respective terms of the Old Securities, except that (i) the Exchange
Securities have been registered under the Securities Act and therefore will not
be subject to certain restrictions on transfer applicable to the Old Securities,
(ii) the Exchange Securities will not contain the $100,000 minimum Liquidation
Amount transfer restriction, (iii) the Exchange Capital Securities will not
provide for any increase in the Distribution rate thereon which is payable on
the Old Capital Securities if the Company and the Trust do not or cannot fulfill
certain obligations (which obligations will be satisfied upon the consummation
of the Exchange Offer) under a Registration Rights Agreement dated as of January
31, 1997 (the "Registration Rights Agreement") among the Company, the Trust and
the Initial Purchaser (as defined in "Prospectus Summary -- The Exchange
Securities -- Absence of Market for the Exchange Capital Securities", (iv) the
Exchange Junior Subordinated Debentures will be issued in denominations of
$1,000 but will not contain the $100,000 minimum principal amount transfer
restriction and (v) the Exchange Junior Subordinated Debentures will not provide
for any increase in the interest rate thereon which is payable on the Old Junior
Subordinated Debentures if the Company and the Trust do not or cannot fulfill
certain obligations under the Registration Rights Agreement (which obligations
will be satisfied upon the consummation of the Exchange Offer). See "Description
of Exchange Securities" and "Description of Old Securities." The Exchange
Capital Securities are being offered for exchange to satisfy certain obligations
of the Company and the Trust under the Registration Rights Agreement. In the
event that the Exchange Offer is consummated, any Old Capital Securities which
remain outstanding after consummation of the Exchange Offer and the
corresponding Exchange Securities issued in the Exchange Offer will vote
together as a single class for purposes of determining whether holders of the
requisite percentage in outstanding Liquidation Amount thereof have taken
certain actions or exercised certain rights under the Trust Agreement.
This Prospectus and the Letter of Transmittal are first being mailed to all
holders of Old Capital Securities on or about , 1997.
The Exchange Capital Securities and the Old Capital Securities
(collectively, the "Capital Securities") will represent beneficial interests in
the assets of the Trust. The Company is the owner of all of the beneficial
interests represented by common securities of the Trust (the "Common
Securities," and together with the Capital Securities, the "Trust Securities").
The Chase Manhattan Bank is the Property Trustee of the Trust. The Trust exists
for the sole purpose of issuing the Trust Securities, investing the proceeds
thereof in the Old Junior Subordinated Debentures and the Exchange Junior
Subordinated Debentures for which they may be exchanged (together, the "Junior
Subordinated Debentures") and making Distributions. The Junior Subordinated
Debentures are scheduled to mature on February 1, 2037 (the "Stated Maturity
Date"). The Capital Securities may be redeemed, at the option of the Trust, at
any time after February 1, 2007, and the Stated Maturity may under certain
circumstances be shortened in the event of a Tax Event or Investment Company
Event. See "Description of Exchange Securities -- Description of Exchange
Capital Securities -- Conditional Right to Shorten Maturity and Special Event
Redemption." The Capital Securities will have a preference over the Common
Securities (as defined herein) under certain circumstances with respect to cash
distributions and amounts payable on liquidation, redemption or otherwise. See
"Description of Exchange Securities -- Description of Exchange Capital
Securities -- Subordination of Common Securities." As more fully described
below, the Company, in addition to agreeing to pay all fees, expenses, debts and
obligations (other than the Trust Securities) related to the Trust has entered
into several contractual undertakings which, the Company believes, taken
together, guarantee to the holders of the Capital Securities a full and
unconditional right to enforce the payment of distributions, the payment of the
redemption price upon redemption of the Capital Securities and the payment of
the Liquidation Amount with respect to the Capital Securities upon liquidation
of the Trust. (See "Risk Factors -- Rights Under the Guarantee.") Those
contractual arrangements include the Company's obligations under (i) the
Guarantee for the benefit of the holders of Capital Securities, (ii) the Trust
Agreement, (iii) the Junior Subordinated Debentures and (iv) the Indenture.
As used herein, (i) the "Indenture" means the Indenture, dated as of
January 31, 1997, as amended and supplemented from time to time, between the
Company and The Chase Manhattan Bank, as Debenture
(ii)
<PAGE> 4
(Continued from the previous page)
Trustee (the "Debenture Trustee") relating to the Junior Subordinated
Debentures, (ii) the "Trust Agreement" means the Amended and Restated
Declaration of Trust relating to the Trust, dated as of January 31, 1997, among
the Company as Sponsor, The Chase Manhattan Bank as Property Trustee (the
"Property Trustee"), Chase Manhattan Bank Delaware as Delaware Trustee (the
"Delaware Trustee"), and the Administrative Trustees named therein
(collectively, with the Property Trustee and Delaware Trustee, the "Issuer
Trustees"). In addition, as the context may require, unless otherwise expressly
stated, (i) "Capital Securities" and "Trust Securities" include the Old Capital
Securities and the Exchange Capital Securities, (ii) "Trust Securities" includes
the Capital Securities and the Common Securities, (iii) "Junior Subordinated
Debentures" includes the Old Junior Subordinated Debentures and the Exchange
Junior Subordinated Debentures and (iv) "Guarantee" includes the Old Guarantee
and the Exchange Guarantee.
Except as provided below, the Capital Securities will be represented by
global Capital Securities in fully registered form, deposited with a custodian
for and registered in the name of a nominee of DTC. Beneficial interests in such
Capital Securities will trade in DTC's Same-Day Funds Settlement System and
secondary market trading activity in such interests will therefore settle in
immediately available funds.
Holders of the Exchange Capital Securities will be entitled to receive
preferential cumulative cash distributions arising from the payment of interest
on the Junior Subordinated Debentures, accruing from January 31, 1997, and
payable semi-annually in arrears on February 1 and August 1 of each year,
commencing August 1, 1997, at the annual rate of 8.82% of the Liquidation Amount
of $1,000 per Trust Security ("Distributions"). So long as no Debenture Event of
Default (as defined in "Description of the Exchange Securities -- Description of
Exchange Junior Subordinated Debentures -- Debenture Events of Default") has
occurred and is continuing, the Company will have the right to defer payments of
interest on the Junior Subordinated Debentures at any time and from time to time
for a period not exceeding 10 consecutive semi-annual periods with respect to
each deferral period (each, an "Extension Period"), provided that no Extension
Period may extend beyond the Stated Maturity Date. Upon the termination of any
such Extension Period and the payment of all amounts then due, the Company may
elect to begin a new Extension Period, subject to the requirements set forth in
the Indenture. If and for so long as interest payments on the Junior
Subordinated Debentures are so deferred, Distributions on the Trust Securities
will also be deferred and the Company will not be permitted, subject to certain
exceptions described herein, to declare or pay any cash distributions with
respect to the Company's capital stock (which includes common and preferred
stock) or to make any payment with respect to debt securities of the Company
that rank pari passu with or junior to the Junior Subordinated Debentures. None
of the Company's subsidiaries will be prohibited from declaring and paying cash
distributions with respect to its capital stock or from making payments with
respect to its debt securities. During an Extension Period, interest on the
Junior Subordinated Debentures will continue to accrue (and the amount of
Distributions to which holders of the Trust Securities are entitled will
accumulate) at the rate of 8.82% per annum, compounded semi-annually, and
holders of Trust Securities will be required to accrue such deferred interest
income for United States federal income tax purposes prior to the receipt of
cash payments attributable to such interest income. See "Description of Exchange
Securities -- Description of Exchange Junior Subordinated Debentures -- Option
to Extend Interest Payment Date" and "Certain Federal Income Tax
Consequences -- Interest Income and Original Issue Discount."
Through the Guarantee, the guarantee agreement of the Company relating to
the Common Securities (the "Common Guarantee"), the Trust Agreement, the Junior
Subordinated Debentures and the Indenture, taken together, the Company has
guaranteed or will guarantee, as the case may be, fully, irrevocably and
unconditionally, all of the Trust's obligations under the Trust Securities. See
"Relationship Among the Exchange Capital Securities, the Exchange Junior
Subordinated Debentures and the Exchange Guarantee." The Old Guarantee and the
Common Guarantee guarantee, and the Exchange Guarantee will guarantee, payments
of Distributions and payments on liquidation or redemption of the Trust
Securities, but in each case only to the extent that the Trust holds funds on
hand legally available therefor and has failed to make such payments, as
described herein. See "Description of Exchange Securities -- Description of
Exchange Guarantee." If the Company fails to make a required payment on the
Junior Subordinated Debentures, the Trust will
(iii)
<PAGE> 5
(Continued from the previous page)
not have sufficient funds to make the related payments, including Distributions,
on the Trust Securities. The Guarantee and the Common Guarantee will not cover
any such payment when the Trust does not have sufficient funds on hand legally
available therefor. In such event, a holder of Capital Securities may institute
a legal proceeding directly against the Company to enforce its rights in respect
of such payment. See "Description of Exchange Securities -- Description of
Exchange Junior Subordinated Debentures -- Enforcement of Certain Rights By
Holders of Exchange Capital Securities." The obligations of the Company under
the Guarantee, the Common Guarantee and the Junior Subordinated Debentures will
be subordinate and junior in right of payment to all Senior Indebtedness (as
defined in "Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debentures -- Subordination").
The Trust Securities will be subject to mandatory redemption in a Like
Amount (as defined herein), (i) in whole but not in part, on the Stated Maturity
Date upon repayment of the Junior Subordinated Debentures at a redemption price
equal to the principal amount of, plus accrued and unpaid interest on, the
Junior Subordinated Debentures (the "Maturity Redemption Price"), (ii) in whole
but not in part, at any time prior to February 1, 2007, contemporaneously with
the optional prepayment of the Junior Subordinated Debentures, upon the
occurrence and continuation of a Special Event (as defined herein) at a
redemption price equal to the Special Event Prepayment Price (as defined below)
(the "Special Event Redemption Price"), and (iii) in whole or in part, on or
after February 1, 2007, contemporaneously with the optional prepayment by the
Company of the Junior Subordinated Debentures, at a redemption price equal to
the Optional Prepayment Price (as defined below) (the "Optional Redemption
Price"). Any of the Maturity Redemption Price, the Special Event Redemption
Price and the Optional Redemption Price may be referred to herein as the
"Redemption Price." See "Description of Exchange Securities -- Description of
Exchange Capital Securities -- Redemption." The Junior Subordinated Debentures
will be prepayable prior to the Stated Maturity Date at the option of the
Company (i) on or after February 1, 2007, in whole or in part, at a prepayment
price (the "Optional Prepayment Price") equal to the principal amount thereof
outstanding, plus accrued and unpaid interest thereon to the date of prepayment,
or (ii) at any time, in whole but not in part, upon the occurrence and
continuation of a Special Event, at a prepayment price (the "Special Event
Prepayment Price") equal to the greater of (a) 100% of the principal amount
thereof or (b) the sum, as determined by a Quotation Agent (as defined herein),
of the present values of the remaining scheduled payments of principal and the
interest thereon discounted to the prepayment date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate (as defined herein) plus, in either case, accrued interest thereon
to the date of prepayment. Either of the Optional Prepayment Price or the
Special Event Prepayment Price may be referred to herein as the "Prepayment
Price." See "Description of Exchange Securities -- Description of Exchange
Junior Subordinated Debentures -- Optional Prepayment" and "-- Conditional Right
to Shorten Maturity and Special Event Prepayment."
The Company as the holder of all of the Common Securities, will have the
right at any time to terminate the Trust and cause a Like Amount of the Junior
Subordinated Debentures to be distributed to the holders of the Trust Securities
in liquidation of the Trust, subject to the Company having received an opinion
of counsel to the effect that such distribution will not be a taxable event to
holders of Capital Securities. Unless the Junior Subordinated Debentures are
distributed to the holders of the Trust Securities, in the event of a
liquidation of the Trust as described herein, after satisfaction of liabilities
to creditors of the Trust as required by applicable law, the holders of the
Capital Securities generally will be entitled to receive a Liquidation Amount of
$1,000 per Capital Security plus accumulated Distributions thereon to the date
of payment. See "Description of Exchange Securities -- Description of Exchange
Capital Securities -- Liquidation of the Trust and Distribution of Exchange
Junior Subordinated Debentures."
------------------------
The Trust is making the Exchange Offer of the Exchange Capital Securities
in reliance on the position of the staff of the Division of Corporate Finance of
the Securities and Exchange Commission (the "Commission") as set forth in
certain interpretive letters addressed to third parties in other transactions.
However,
(iv)
<PAGE> 6
(Continued from the previous page)
neither the Company nor the Trust has sought its own interpretive letter and
there can be no assurance that the staff of the Division of Corporate Finance of
the Commission would make a similar determination with respect to the Exchange
Offer as it has in such interpretive letters to third parties. Based on these
interpretations by the staff of the Division of Corporate Finance of the
Commission, and subject to the two immediately following sentences, the Company
and the Trust believe that Exchange Capital Securities issued pursuant to this
Exchange Offer in exchange for Old Capital Securities may be offered for resale,
resold and otherwise transferred by a holder thereof (other than a holder who is
a broker-dealer) without further compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that such Exchange Capital
Securities are acquired in the ordinary course of such holder's business and
that such holder is not participating, and has no arrangement or understanding
with any person to participate, in a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities. Any holder of Old Capital
Securities who is an "affiliate" of the Company or the Trust or who intends to
participate in the Exchange Offer for the purpose of distributing Exchange
Capital Securities, or any broker-dealer who purchased Old Capital Securities
from the Trust for resale pursuant to Rule 144A under the Securities Act ("Rule
144A") or any other available exemption under the Securities Act, however, (a)
will not be able to rely on the interpretations of the staff of the Division of
Corporation Finance of the Commission set forth in the above-mentioned
interpretive letters, (b) will not be permitted or entitled to tender such Old
Capital Securities in the Exchange Offer and (c) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or other transfer of such Old Capital Securities unless
such sale is made pursuant to an exemption from such requirements. In addition,
as described below, if any broker-dealer holds Old Capital Securities acquired
for its own account as a result of market-making or other trading activities and
exchanges such Old Capital Securities for Exchange Capital Securities, then such
broker-dealer must deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of such Exchange Capital
Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for Exchange Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an "affiliate" of the Company or the
Trust, (ii) any Exchange Capital Securities to be received by it are being
acquired in the ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such Exchange Capital Securities, and (iv) if
such holder is not a broker-dealer, such holder is not engaged in, and does not
intend to engage in, a distribution (within the meaning of the Securities Act)
of such Exchange Capital Securities. In addition, the Company and the Trust may
require such holder, as a condition to such holder's eligibility to participate
in the Exchange Offer, to furnish to the Company and the Trust (or an agent
thereof) in writing information as to the number of "beneficial owners" (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended)
on behalf of whom such holder holds the Old Capital Securities to be exchanged
in the Exchange Offer. Each broker-dealer that receives Exchange Capital
Securities for its own account pursuant to the Exchange Offer must acknowledge
that it acquired the Exchange Capital Securities for its own account as the
result of market-making activities or other trading activities and must agree
that it will deliver a prospectus meeting the requirements of the Securities Act
in connection with any resale of such Exchange Capital Securities. The Letter of
Transmittal states that, by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. Based on the position taken by the staff of the
Division of Corporation Finance of the Commission in the interpretive letters
referred to above, the Company and the Trust believe that broker-dealers who
acquired Old Capital Securities for their own accounts, as a result of
market-making activities or other trading activities ("Participating
Broker-Dealers"), may fulfill their prospectus delivery requirements with
respect to the Exchange Capital Securities received upon exchange of such Old
Capital Securities (other than Old Capital Securities which represent an unsold
allotment from the original sale of the Old Capital Securities) with a
prospectus meeting the requirements of the Securities Act, which may be the
prospectus prepared for an exchange offer so long as it contains a description
of the plan of distribution with respect to the resale of such Exchange Capital
Securities. Accordingly, this Prospectus, as it may be amended or supplemented
from time
(v)
<PAGE> 7
(Continued from the previous page)
to time, may be used by a Participating Broker-Dealer during the period referred
to below in connection with resales of Exchange Capital Securities received in
exchange for Old Capital Securities where such Old Capital Securities were
acquired by such Participating Broker-Dealer for its own account as a result of
market-making or other trading activities. Subject to certain provisions set
forth in the Registration Rights Agreement, the Company and the Trust have
agreed that this Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer in connection with resales of
such Exchange Capital Securities for a period ending 90 days after the
Expiration Date (as defined herein) (subject to extension under certain limited
circumstances described below) or, if earlier, when all such Exchange Capital
Securities have been disposed of by such Participating Broker-Dealer. See "Plan
of Distribution." However, a Participating Broker-Dealer who intends to use this
Prospectus in connection with the resale of Exchange Capital Securities received
in exchange for Old Capital Securities pursuant to the Exchange Offer must
notify the Company or the Trust, or cause the Company or the Trust to be
notified, on or prior to the Expiration Date, that it is a Participating
Broker-Dealer. Such notice may be given in the space provided for that purpose
in the Letter of Transmittal or may be delivered to the Exchange Agent at one of
the addresses set forth herein under "The Exchange Offer -- Exchange Agent." Any
Participating Broker-Dealer who is an "affiliate" of the Company or the Trust
may not rely on such interpretive letters and must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
any resale transaction. See "The Exchange Offer -- Resales of Exchange Capital
Securities."
Each Participating Broker-Dealer who surrenders Old Capital Securities
pursuant to the Exchange Offer will be deemed to have agreed that, upon receipt
of notice from the Company or the Trust of the occurrence of any event or the
discovery of any fact which makes any statement contained or incorporated by
reference in this Prospectus untrue in any material respect or which causes this
Prospectus to omit to state a material fact necessary in order to make the
statements contained or incorporated by reference herein, in light of the
circumstances under which they were made, not misleading or of the occurrence of
certain other events specified in the Registration Rights Agreement, such
Participating Broker-Dealer will suspend the sale of Exchange Capital Securities
(or the Exchange Guarantee or the Exchange Junior Subordinated Debentures, as
applicable) pursuant to this Prospectus until the Company or the Trust has
amended or supplemented this Prospectus to correct such misstatement or omission
and has furnished copies of the amended or supplemented Prospectus to such
Participating Broker-Dealer or the Company or the Trust has given notice that
the sale of the Exchange Capital Securities (or the Exchange Guarantee or the
Exchange Junior Subordinated Debentures, as applicable) may be resumed, as the
case may be. If the Company or the Trust gives such notice to suspend the sale
of the Exchange Capital Securities (or the Exchange Guarantee or the Exchange
Junior Subordinated Debentures, as applicable), it shall extend the 90-day
period referred to above during which Participating Broker-Dealers are entitled
to use this Prospectus in connection with the resale of Exchange Capital
Securities by the number of days during the period from and including the date
of the giving of such notice to and including the date when Participating
Broker-Dealers shall have received copies of the amended or supplemented
Prospectus necessary to permit resales of the Exchange Capital Securities or to
and including the date on which the Company or the Trust has given notice that
the sale of Exchange Capital Securities (or the Exchange Guarantee or the
Exchange Junior Subordinated Debentures, as applicable) may be resumed, as the
case may be.
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Old Capital Securities. The Exchange Capital
Securities will be a new issue of securities for which there currently is no
market. Although the Initial Purchasers have informed the Company and the Trust
that they each currently intend to make a market in the Exchange Capital
Securities, they are not obligated to do so, and any such market making may be
discontinued at any time without notice. Accordingly, there can be no assurance
as to the development or liquidity of any market for the Exchange Capital
Securities. The Company and the Trust currently do not intend to apply for
listing of the Exchange Capital Securities on any securities exchange or for
inclusion in the Nasdaq Stock Market ("NASDAQ").
(vi)
<PAGE> 8
(Continued from the previous page)
The Company and the Trust have agreed to keep the Registration Statement,
of which this Prospectus is a part, effective for a period of 30 calendar days
(or longer if required by applicable law or to allow Participating BrokerDealers
to satisfy their prospectus delivery requirements) after notice of the Exchange
Offer is mailed to holders of the Old Securities.
Any Old Capital Securities not tendered and accepted in the Exchange Offer
will remain outstanding and will be entitled to all the same rights and will be
subject to the same limitations applicable thereto under the Trust Agreement
(except for those rights in respect of the Exchange Offer). Following
consummation of the Exchange Offer, the holders of Old Capital Securities will
continue to be subject to all of the existing restrictions upon transfer thereof
and neither the Company nor the Trust will have any further obligation to such
holders (other than under certain limited circumstances) to provide for
registration under the Securities Act of the Old Capital Securities held by
them. To the extent that Old Capital Securities are tendered and accepted in the
Exchange Offer, a holder's ability to sell untendered Old Capital Securities
could be adversely affected. See "Risk Factors -- Consequences of a Failure to
Exchange Old Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS PROSPECTUS
AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO
TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on , 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is extended
by the Company or the Trust (in which case the term "Expiration Date" shall mean
the latest date and time to which the Exchange Offer is extended). Tenders of
Old Capital Securities may be withdrawn at any time on or prior to the
Expiration Date. The Exchange Offer is not conditioned upon any minimum
Liquidation Amount of Old Capital Securities being tendered for exchange. The
Exchange Offer is, however, subject to certain events and conditions which may
be waived by the Company or the Trust and to the terms and provisions of the
Registration Rights Agreement. Old Capital Securities may be tendered in the
Exchange Offer for exchange in whole or in part in any integral multiples of
$1,000 Liquidation Amount (one Capital Security) notwithstanding the
requirement, applicable to all other transfers of Old Capital Securities, of a
minimum transfer amount of $100,000 in Liquidation Amount. For purposes of
tenders of Old Capital Securities in the Exchange Offer, the requirement for
minimum transfers of $100,000 Liquidation Amount will be waived. The Company has
agreed to pay all expenses of the Exchange Offer. See "The Exchange
Offer -- Fees and Expenses." Holders of the Old Capital Securities whose Old
Capital Securities are accepted for exchange will not receive Distributions on
such Old Capital Securities and will be deemed to have waived the right to
receive any Distributions on such Old Capital Securities accumulated from and
including January 31, 1997. Accordingly, holders of Exchange Capital Securities
as of the record date for the payment of Distributions on August 1, 1997 will be
entitled to receive Distributions accumulated from and including January 31,
1997. See "The Exchange Offer -- Distributions on Exchange Capital Securities."
Neither the Company nor the Trust will receive any cash proceeds from the
issuance of the Exchange Capital Securities offered hereby. No dealer-manager is
being used in connection with this Exchange Offer. See "Use of Proceeds" and
"Plan of Distribution."
NOTICE TO NEW HAMPSHIRE RESIDENTS:
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A
SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW
HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT
ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER
ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A
SECURITY OR A TRANSACTION MEANS THAT
(vii)
<PAGE> 9
(Continued from the previous page)
THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS
OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY, OR TRANSACTION.
IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER,
CUSTOMER OR CLIENT, ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS
PARAGRAPH.
------------------------
FOR NORTH CAROLINA RESIDENTS ONLY:
THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT
APPROVED OR DISAPPROVED THE OFFERING OF THE SECURITIES MADE HEREBY NOR HAS THE
COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THIS EXCHANGE
OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE TRUST. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR ANYONE TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
(viii)
<PAGE> 10
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................................................................. 1
Incorporation of Certain Documents by Reference....................................... 1
Prospectus Summary.................................................................... 3
Risk Factors.......................................................................... 10
Use of Proceeds....................................................................... 17
Ratios of Earnings to Fixed Charges................................................... 17
Accounting Treatment.................................................................. 17
Capitalization........................................................................ 18
Selected Financial Data............................................................... 19
Trenwick Group Inc.................................................................... 20
Trenwick Capital Trust I.............................................................. 20
The Exchange Offer.................................................................... 21
Description of Exchange Securities.................................................... 30
Description of Exchange Capital Securities.......................................... 30
Description of Exchange Junior Subordinated Debentures.............................. 42
Description of Exchange Guarantee................................................... 50
Description of Old Securities......................................................... 52
Relationship Among the Exchange Capital Securities, the Exchange Junior Subordinated
Debentures and the Exchange Guarantee............................................... 52
Certain Federal Income Tax Consequences............................................... 54
ERISA Considerations.................................................................. 58
Plan of Distribution.................................................................. 59
Legal Matters......................................................................... 60
Experts............................................................................... 60
</TABLE>
(ix)
<PAGE> 11
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional
offices of the Commission located at 7 World Trade Center, 13th Floor, Suite
1300, New York, New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500
West Madison Street, Chicago, Illinois 60661. Copies of such material can also
be obtained at prescribed rates by writing to the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. If available,
such reports and other information may also be accessed through the Commission's
electronic data gathering, analysis and retrieval system ("EDGAR") via
electronic means, including the Commission's web site on the Internet
(http://www.sec.gov). In addition, the Company's common stock, $.10 par value
per share ("Common Stock"), is listed on the NASDAQ National Market and such
material also is available for inspection at the National Association of
Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C. 20006.
No separate financial statements of the Trust have been included herein.
The Company and the Trust do not consider that such financial statements would
be material to holders of the Capital Securities because the Trust is a newly
formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any activity
other than holding as trust assets the Junior Subordinated Debentures, issuing
the Trust Securities and engaging in incidental activities. See "Trenwick
Capital Trust I" and "Description of Exchange Securities." The Trust is not
currently subject to the information reporting requirements of the Exchange Act.
The Trust will become subject to such requirements upon the effectiveness of the
Registration Statement, although it intends to seek and expects to receive
exemptions therefrom.
This Prospectus constitutes a part of a registration statement on Form S-4
(the "Registration Statement") filed by the Company and the Trust with the
Commission under the Securities Act. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company, the Trust
and the Exchange Securities. Any statements contained herein concerning the
provisions of any document are not necessarily complete, and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated into this Prospectus by reference:
(a) Annual Report on Form 10-K for the year ended December 31, 1996;
(b) Quarterly Reports on Form 10-Q and Form 10-Q/A for the quarter ended
March 31, 1997; and
(c) Current Reports on Form 8-K dated January 24, 1997, January 28, 1997
and January 31, 1997.
Such incorporation by reference shall not be deemed to specifically
incorporate by reference the information referred to in Item 402(a)(8) of
Regulation S-K.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of the offering of the Exchange Securities offered hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part of
this Prospectus from the date of filing of such document.
<PAGE> 12
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein or in any Prospectus Supplement modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein do not purport to be complete, and
where reference is made to the particular provisions of such contract or other
document, such provisions are qualified in all respects by reference to all of
the provisions of such contract or other document. The Company will provide
without charge to any person to whom this Prospectus is delivered, on the
written or oral request of such person, a copy of any or all of the foregoing
documents incorporated by reference herein (other than exhibits not specifically
incorporated by reference into the texts of such documents). Requests for such
documents should be directed to: Trenwick Group Inc., Metro Center, One Station
Place, Stamford, Connecticut 06902, Attention: Jane T. Wiznitzer, Vice
President -- Legal Affairs and Secretary. Telephone requests may be directed to
(203) 353-5500.
2
<PAGE> 13
PROSPECTUS SUMMARY
The following summary does not purport to be complete and is qualified in
its entirety by the more detailed information and financial statements included
and incorporated by reference in this Prospectus.
TRENWICK GROUP INC.
Trenwick Group Inc. is a holding company whose operating subsidiary,
Trenwick America Reinsurance Corporation ("Trenwick America Re"), provides
treaty and facultative reinsurance to insurers of property and casualty risks in
the United States. Trenwick America Re's business is primarily obtained through
brokers and reinsurance intermediaries. The major portion of the reinsurance it
writes is automobile liability, professional liability and general liability.
Reinsurance is provided both on an excess of loss and quota share basis. In
addition to underwriting reinsurance on its own account, Trenwick America Re
participates in specialized segments of the reinsurance market through strategic
alliances with leaders in those segments. Over the five-year period ending
December 31, 1996, the combined ratio of the Company's reinsurance operations,
computed on the basis of generally accepted accounting principles, substantially
improved from 112.3% in 1992 to 95.8% in 1996.
Trenwick America Re is licensed or otherwise authorized to conduct
reinsurance business in every state and the District of Columbia. Trenwick
America Re is rated "A+ (Superior)" by A.M. Best Company, an independent
insurance industry rating organization, and its claims-paying ability is rated
"A+ (Good)" by Standard & Poor's Rating Services. A.M. Best ratings are
primarily based upon factors relevant to policyholders and are not directed
toward the protection of investors.
TRENWICK CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) the Declaration of Trust executed by the Company as Sponsor and Chase
Manhattan Bank Delaware, as Delaware Trustee, and (ii) the filing of a
certificate of trust with the Delaware Secretary of State on January 21, 1997.
The Trust's business and affairs are conducted by the Issuer Trustees: the
Property Trustee, the Delaware Trustee, and the three individual Administrative
Trustees who are officers of the Company. The Trust exists for the exclusive
purposes of (i) issuing and selling the Trust Securities, (ii) effecting the
Exchange Offer or filing a Shelf Registration Statement, (iii) using the
proceeds from the sale of the Trust Securities to acquire the Junior
Subordinated Debentures issued by the Company, (iv) making Distributions to
holders of the Trust Securities as provided in the Trust Agreement and (v)
engaging in only those other activities necessary, advisable or incidental
thereto (such as registering the transfer of the Trust Securities). Accordingly,
the Junior Subordinated Debentures will be the sole assets of the Trust, and
payments under the Junior Subordinated Debentures will be the sole revenue of
the Trust. All of the Common Securities are owned by the Company.
THE EXCHANGE OFFER
The Exchange Offer......... Up to $110,000,000 aggregate Liquidation Amount of
Exchange Capital Securities are being offered in
exchange for a like aggregate Liquidation Amount of
Old Capital Securities. Old Capital Securities may
be tendered in the Exchange Offer for exchange in
whole or in part in any integral multiples of
$1,000 Liquidation Amount (one Capital Security)
notwithstanding the requirement, applicable to all
other transfers of Old Capital Securities, of a
minimum transfer amount of $100,000 in Liquidation
Amount. For purposes of tenders of Old Capital
Securities in the Exchange Offer, the requirement
for minimum transfers of $100,000 Liquidation
Amount will be waived. The Company and the Trust
are making the Exchange Offer to satisfy their
obligations under the Registration Rights Agreement
relating to the Old Capital Securities. For a
description of the procedures for tendering Old
Capital Securities, see "The Exchange
Offer -- Procedures for Tendering Old Capital
Securities."
3
<PAGE> 14
Expiration Date............ 5:00 p.m., New York City time, on , 1997,
unless the Exchange Offer is extended by the
Company or the Trust (in which case the Expiration
Date will be the latest date and time to which the
Exchange Offer is extended). See "The Exchange
Offer -- Terms of the Exchange Offer."
Conditions to the Exchange
Offer...................... The Exchange Offer is subject to certain
conditions, which may be waived by the Company and
the Trust in their sole discretion. The Exchange
Offer is not conditioned upon any minimum
Liquidation Amount of Old Capital Securities being
tendered. See "The Exchange Offer -- Conditions to
the Exchange Offer."
Offer...................... The Company and the Trust reserve the right in
their sole and absolute discretion, subject to
applicable law, at any time and from time to time,
to (i) delay the acceptance of the Old Capital
Securities for exchange, (ii) terminate the
Exchange Offer if certain specified conditions have
not been satisfied, (iii) extend the Expiration
Date of the Exchange Offer and retain all Old
Capital Securities tendered pursuant to the
Exchange Offer, subject, however, to the right of
holders of Old Capital Securities to withdraw their
tendered Old Capital Securities, or (iv) waive any
condition or otherwise amend the terms of the
Exchange Offer in any respect. See "The Exchange
Offer -- Terms of the Exchange Offer."
Withdrawal Rights.......... Tenders of Old Capital Securities may be withdrawn
at any time on or prior to the Expiration Date by
delivering a written notice of such withdrawal to
the Exchange Agent in conformity with certain
procedures set forth below under "The Exchange
Offer -- Withdrawal Rights."
Procedures for Tendering
Old Capital Securities..... Tendering holders of Old Capital Securities must
complete and sign a Letter of Transmittal in
accordance with the instructions contained therein
and forward the same by mail, facsimile or hand
delivery, together with any other required
documents, to the Exchange Agent, either with the
Old Capital Securities to be tendered or in
compliance with the specified procedures for
guaranteed delivery of Old Capital Securities.
Certain brokers, dealers, commercial banks, trust
companies and other nominees may also effect
tenders by book-entry transfer. Holders of Old
Capital Securities registered in the name of a
broker, dealer, commercial bank, trust company or
other nominee are urged to contact such person
promptly if they wish to tender Old Capital
Securities pursuant to the Exchange Offer. See "The
Exchange Offer -- Procedures for Tendering Old
Capital Securities." Letters of Transmittal and
certificates representing Old Capital Securities
should not be sent to the Company or the Trust.
Such documents should only be sent to the Exchange
Agent.
Resales of Exchange Capital
Securities................. The Company and the Trust are making the Exchange
Offer in reliance on the position of the staff of
the Division of Corporation Finance of the
Commission as set forth in certain interpretive
letters addressed to third parties in other
transactions. However, neither the Company nor the
Trust has sought its own interpretive letter and
there can be no assurance that the staff of the
Division of Corporation Finance of the Commission
would make a similar determination with respect to
the Exchange Offer
4
<PAGE> 15
as it has in such interpretive letters to third
parties. Based on these interpretations by the
staff of the Division of Corporation Finance of the
Commission, and subject to the two immediately
following sentences, the Company and the Trust
believe that Exchange Capital Securities issued
pursuant to this Exchange Offer in exchange for Old
Capital Securities may be offered for resale,
resold and otherwise transferred by a holder
thereof (other than a holder who is a
broker-dealer) without further compliance with the
registration and prospectus delivery requirements
of the Securities Act, provided that such Exchange
Capital Securities are acquired in the ordinary
course of such holder's business and that such
holder is not participating, and has no arrangement
or understanding with any person to participate, in
a distribution (within the meaning of the
Securities Act) of such Exchange Capital
Securities. However, any holder of Old Capital
Securities who is an "affiliate" of the Company or
the Trust or who intends to participate in the
Exchange Offer for the purpose of distributing the
Exchange Capital Securities, or any broker-dealer
who purchased the Old Capital Securities from the
Trust for resale pursuant to Rule 144A or any other
available exemption under the Securities Act, (a)
will not be able to rely on the interpretations of
the staff of the Division of Corporation Finance of
the Commission set forth in the above-mentioned
interpretive letters, (b) will not be permitted or
entitled to tender such Old Capital Securities in
the Exchange Offer and (c) must comply with the
registration and prospectus delivery requirements
of the Securities Act in connection with any sale
or other transfer of such Old Capital Securities
unless such sale is made pursuant to an exemption
from such requirements. In addition, as described
below, if any broker-dealer holds Old Capital
Securities acquired for its own account as a result
of market-making or other trading activities and
exchanges such Old Capital Securities for Exchange
Capital Securities, then such broker-dealer must
deliver a prospectus meeting the requirements of
the Securities Act in connection with any resales
of such Exchange Capital Securities. Each holder of
Old Capital Securities who wishes to exchange Old
Capital Securities for Exchange Capital Securities
in the Exchange Offer will be required to represent
that (i) it is not an "affiliate" of the Company or
the Trust, (ii) any Exchange Capital Securities to
be received by it are being acquired in the
ordinary course of its business, (iii) it has no
arrangement or understanding with any person to
participate in a distribution (within the meaning
of the Securities Act) of such Exchange Capital
Securities, and (iv) if such holder is not a
broker-dealer, such holder is not engaged in, and
does not intend to engage in, a distribution
(within the meaning of the Securities Act) of such
Exchange Capital Securities. Each broker-dealer
that receives Exchange Capital Securities for its
own account pursuant to the Exchange Offer must
acknowledge that it acquired the Old Capital
Securities for its own account as the result of
market-making activities or other trading
activities and must agree that it will deliver a
prospectus meeting the requirements of the
Securities Act in connection with any resale of
such Exchange Capital Securities. The Letter of
Transmittal states that, by so acknowledging and by
delivering a prospectus, a broker-dealer will not
be deemed to admit that it is an "underwriter"
within the meaning of the Securities Act. Based on
the position taken by the staff of the Division of
Corporation Finance of the Commission in the
interpretive letters referred to above, the
5
<PAGE> 16
Company and the Trust believe that Participating
Broker-Dealers who acquired Old Capital Securities
for their own accounts as a result of market-making
activities or other trading activities may fulfill
their prospectus delivery requirements with respect
to the Exchange Capital Securities received upon
exchange of such Old Capital Securities (other than
Old Capital Securities which represent an unsold
allotment from the original sale of the Old Capital
Securities) with a prospectus meeting the
requirements of the Securities Act, which may be
the prospectus prepared for an exchange offer so
long as it contains a description of the plan of
distribution with respect to the resale of such
Exchange Capital Securities. Accordingly, this
Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating
Broker-Dealer in connection with resales of
Exchange Capital Securities received in exchange
for Old Capital Securities where such Old Capital
Securities were acquired by such Participating
Broker-Dealer for its own account as a result of
market-making or other trading activities. Subject
to certain provisions set forth in the Registration
Rights Agreement and to the limitations described
below under "The Exchange Offer -- Resales of
Exchange Capital Securities," the Company and the
Trust have agreed that this Prospectus, as it may
be amended or supplemented from time to time, may
be used by a Participating Broker-Dealer in
connection with resales of such Exchange Capital
Securities for a period ending 90 days after the
Expiration Date (subject to extension under certain
limited circumstances) or, if earlier, when all
such Exchange Capital Securities have been disposed
of by such Participating Broker-Dealer. See "Plan
of Distribution." Any Participating Broker-Dealer
who is an "affiliate" of the Company or the Trust
may not rely on such interpretive letters and must
comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with any resale transaction. See "The
Exchange Offer -- Resales of Exchange Capital
Securities."
Effect of Not Accepting the
Exchange Offer............. Old Capital Securities which are not tendered in
the Exchange Offer will continue to have all the
rights presently accruing to them except the right
to an increased Distribution rate on the Old
Capital Securities in certain events if the Company
and the Trust do not or cannot fulfill certain
obligations under the Registration Rights Agreement
(which obligations will be satisfied upon the
consummation of the Exchange Offer). See "Risk
Factors -- Consequences of a Failure to Exchange
Old Capital Securities." The Old Capital Securities
will vote as a single class with Exchange Capital
Securities. However, the Old Capital Securities
will continue to be subject to restrictions on
transfer and, except for limited exceptions for
certain broker-dealers, will have no registration
rights. To the extent that Old Capital Securities
are not tendered and accepted in the Exchange
Offer, a holder's ability to freely sell untendered
Old Capital Securities could be adversely affected.
Exchange Agent............. The exchange agent with respect to the Exchange
Offer is The Chase Manhattan Bank (the "Exchange
Agent"). The applicable addresses, and telephone
and facsimile numbers, of the Exchange Agent are
set forth in "The Exchange Offer -- Exchange Agent"
and the Letter of Transmittal.
6
<PAGE> 17
Use of Proceeds............ Neither the Company nor the Trust will receive any
cash proceeds from the issuance of the Exchange
Capital Securities offered hereby. See "Use of
Proceeds."
Certain Federal Income Tax
Consequences; ERISA
Considerations............. Holders of Old Capital Securities should review the
information set forth under "Certain Federal Income
Tax Consequences" and "ERISA Considerations" prior
to tendering Old Capital Securities in the Exchange
Offer.
THE EXCHANGE SECURITIES
Securities Offered......... Up to 110,000 of the Trust's Exchange Capital
Securities (Liquidation Amount of $1,000 per
Exchange Capital Security) which have been
registered under the Securities Act. The Exchange
Capital Securities will be issued, and the Old
Capital Securities were issued, under the Trust
Agreement. The Exchange Capital Securities and any
Old Capital Securities which remain outstanding
after consummation of the Exchange Offer will vote
together as a single class for purposes of
determining whether holders of the requisite
percentage in outstanding Liquidation Amount
thereof have taken certain actions or exercised
certain rights under the Trust Agreement. See
"Description of Exchange Securities -- Description
of Exchange Capital Securities -- Voting Rights;
Amendment of the Trust Agreement." The terms of the
Exchange Capital Securities are identical in all
material respects to the terms of the Old Capital
Securities, except that the Exchange Capital
Securities have been registered under the
Securities Act and will not be subject to the
$100,000 minimum Liquidation Amount transfer
restriction and certain other restrictions on
transfer applicable to the Old Capital Securities
and will not provide for any increase in the
Distribution rate thereon which is payable on the
Old Capital Securities if the Company or the Trust
do not or cannot fulfill certain obligations under
the Registration Rights Agreement (which
obligations will be satisfied upon the consummation
of the Exchange Offer). See "The Exchange
Offer -- Purpose of the Exchange Offer,"
"Description of Exchange Securities" and
"Description of Old Securities."
Distribution Dates......... February 1 and August 1 of each year, commencing
August 1, 1997.
Extension Periods.......... So long as no Debenture Event of Default has
occurred and is continuing, distributions on the
Exchange Capital Securities will be deferred for
the duration of any Extension Period elected by the
Company with respect to the payment of interest on
the Exchange Junior Subordinated Debentures. No
Extension Period will exceed 10 consecutive
semi-annual periods or extend beyond the Stated
Maturity. The Company has no current intention to
exercise its right to defer payment of interest on
the Junior Subordinated Debentures. See
"Description of Exchange Securities -- Description
of Exchange Junior Subordinated
Debentures -- Option to Extend Interest Payment
Date" and "Certain Federal Income Tax
Consequences -- Interest Income and Original Issue
Discount."
Ranking.................... The Exchange Capital Securities will rank pari
passu, and payments thereon will be made pro rata,
with the Old Capital Securities and the
7
<PAGE> 18
Common Securities except, with respect to the
Common Securities, in certain circumstances
described under "Description of Exchange
Securities -- Description of Exchange Capital
Securities -- Subordination of Common Securities."
The Exchange Junior Subordinated Debentures will
rank pari passu with the Old Junior Subordinated
Debentures and all other junior subordinated
debentures issued by the Company (collectively,
with the Old Junior Subordinated Debentures, the
"Other Debentures") which may be issued and sold
(if at all) to other trusts established or to be
established by the Company, in each case similar to
the Trust (the "Other Trusts"), and will be
unsecured and subordinate and junior in right of
payment to all Senior Indebtedness to the extent
and in the manner set forth in the Indenture. See
"Description of Exchange Securities -- Description
of Exchange Junior Subordinated Debentures." The
Exchange Guarantee will rank pari passu with the
Old Guarantee and all other guarantees issued by
the Company with respect to capital securities
issued or to be issued by Other Trusts
(collectively, the "Other Guarantees"). The
Guarantee and the Common Guarantee will be (i)
subordinate and junior in right of payment to all
other liabilities of the Company; (ii) pari passu
with (A) the most senior preferred or preference
stock now or hereafter issued by the Company, and
(B) any guarantee now or hereafter entered into by
the Company in respect of any capital securities or
common securities of any Other Trusts; and (iii)
senior to the Company's Common Stock. None of the
Indenture, the Guarantee or the Trust Agreement
places any limitation on the amount of secured or
unsecured debt, including Senior Indebtedness, that
may be incurred by the Company. See "Description of
Exchange Securities -- Description of Exchange
Guarantee -- Status of Exchange Guarantee."
Redemption................. The Trust Securities are subject to mandatory
redemption in a Like Amount, (i) in whole but not
in part, on the Stated Maturity upon repayment of
the Junior Subordinated Debentures, (ii) in whole
but not in part, at any time contemporaneously with
the optional prepayment of the Junior Subordinated
Debentures by the Company upon the occurrence and
continuation of a Special Event and (iii) in whole
or in part, on or after February 1, 2007
contemporaneously with the optional prepayment by
the Company of the Junior Subordinated Debentures,
in each case at the applicable Redemption Price.
See "Description of Exchange Securities --
Description of Exchange Capital Securities --
Redemption."
Ratings.................... The Old Capital Securities are rated "BBB" by
Standard & Poor's Ratings Services and "baa3" by
Moody's Investors Service and the Exchange Capital
Securities are expected to be rated similarly. A
security rating is not a recommendation to buy,
sell or hold securities and may be subject to
revision or withdrawn at any time by the assigning
rating organization.
Absence of Market for the
Exchange Capital
Securities................. The Exchange Capital Securities will be a new issue
of securities for which there currently is no
market. Although Lehman Brothers, the initial
purchaser of the Old Capital Securities (the
"Initial Purchaser"), has informed the Company and
the Trust that it currently intends to make a
market in the Exchange Capital Securities, the
Initial Purchaser
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<PAGE> 19
is not obligated to do so, and any such market
making may be discontinued at any time by the
Initial Purchaser without notice. Accordingly,
there can be no assurance as to the development or
liquidity of any market for the Exchange Capital
Securities. The Trust and the Company do not intend
to apply for listing of the Old Capital Securities
or the Exchange Capital Securities on any
securities exchange or for quotation through
NASDAQ. See "Plan of Distribution."
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<PAGE> 20
RISK FACTORS
Prospective investors should carefully review the information included and
incorporated by reference in this Prospectus or in any Prospectus Supplement and
should particularly consider the following matters.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES
The obligations of the Company under the Junior Subordinated Debentures
will be unsecured and rank subordinate and junior in right of payment to all
Senior Indebtedness. Because the Company is a holding company, the right of the
Company to participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability of
holders of the Capital Securities to benefit indirectly from such distribution)
is subject to the prior claims of creditors of that subsidiary, including its
reinsureds, except to the extent that the Company may itself be recognized as a
creditor of that subsidiary. Accordingly, the Junior Subordinated Debentures
will be effectively subordinated to all existing and future liabilities of the
Company's subsidiaries, and holders of Junior Subordinated Debentures should
look only to the assets of the Company for payments on the Junior Subordinated
Debentures. At March 31, 1997 and December 31, 1996, the Company's subsidiaries
had total liabilities of $625.3 and $586.0 million, respectively. The Guarantee
and the Common Guarantee will be (i) subordinate and junior in right of payment
to all other liabilities of the Company; (ii) pari passu with (A) the most
senior preferred or preference stock now or hereafter issued by the Company, and
(B) any guarantee now or hereafter entered into by the Company in respect of the
capital securities or common securities of any Other Trusts; and (iii) senior to
the Company's Common Stock. None of the Indenture, the Guarantee or the Trust
Agreement places any limitation on the amount of secured or unsecured debt,
including Senior Indebtedness, that may be incurred by the Company. See
"Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debentures -- Subordination" and "Description of Exchange
Securities -- Description of Exchange Guarantee -- Status of Exchange
Guarantee."
The ability of the Trust to pay amounts due on the Capital Securities is
solely dependent upon the Company making payments on the Junior Subordinated
Debentures as and when required.
HOLDING COMPANY STRUCTURE; RESTRICTIONS ON DIVIDENDS
The Company is an insurance holding company whose principal asset is the
capital stock of Trenwick America Re, which it owns through its wholly-owned
subsidiary Trenwick America Corporation. The Company's principal source of
funds, including funds available to pay interest and principal on the Junior
Subordinated Debentures or make payments with respect to its capital stock, is
cash dividends from Trenwick America Re. Accordingly, the Company's ability to
pay interest and principal on the Junior Subordinated Debentures is dependent on
the receipt of such dividends. The payment of dividends by Trenwick America Re
is subject to limits imposed by the insurance laws and regulations of the State
of Connecticut, its state of incorporation and domicile.
Under Connecticut insurance laws and regulations, the maximum amount of
shareholder dividends or other distributions that Trenwick America Re may
declare or pay to the Company within any twelve month period, without the
permission of the Connecticut Insurance Commissioner, is limited to the greater
of 10% of policyholder surplus at December 31 of the preceding year, or 100% of
net income, excluding realized capital gains, for the twelve month period ending
December 31 of the preceding year, both determined in accordance with statutory
accounting practices. For the purpose of computing the limitation, carryforward
provisions apply with respect to net income realized in the two previous
calendar years which has not already been paid out as dividends. The maximum
amount of dividends which can be paid by Trenwick America Re in 1997 without
regulatory approval is $62,901,000.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSIDERATIONS
So long as no Debenture Event of Default (as defined herein) shall have
occurred and be continuing, the Company will have the right under the Indenture
to defer payments of interest on the Junior Subordinated Debentures at any time
or from time to time for a period not exceeding 10 consecutive semi-annual
periods
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<PAGE> 21
with respect to each Extension Period, provided that no Extension Period may
extend beyond the Stated Maturity. As a consequence of any such deferral,
semi-annual Distributions on the Capital Securities by the Trust will be
deferred (and the amount of Distributions to which holders of the Capital
Securities are entitled will accumulate additional Distributions thereon at the
rate of 8.82% per annum, compounded semi-annually, but not exceeding the
interest rate then accruing on the Junior Subordinated Debentures) from the
relevant payment date for such Distributions during any such Extension Period.
Prior to the termination of any such Extension Period, the Company may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or to
extend beyond the Stated Maturity Date. Upon the termination of any Extension
Period and the payment of all interest then accrued and unpaid on the Junior
Subordinated Debentures (together with interest thereon at the annual rate of
8.82%, compounded semi-annually, to the extent permitted by applicable law), the
Company may elect to begin a new Extension Period, subject to the above
requirements. There is no limitation on the number of times that the Company may
elect to begin an Extension Period. See "Description of Exchange
Securities -- Description of Exchange Capital Securities -- Distributions" and
"Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debentures -- Option to Extend Interest Payment Date."
Should the Company exercise its right to defer payments of interest on the
Junior Subordinated Debentures, each holder of Trust Securities will be required
to accrue income (as original issue discount ("OID")) in respect of the deferred
stated interest allocable to its Trust Securities for United States federal
income tax purposes, which will be allocated but not distributed to holders of
Trust Securities. As a result, each such holder of Capital Securities will
recognize income for United States federal income tax purposes in advance of the
receipt of cash and will not receive the cash related to such income from the
Trust if the holder disposes of the Capital Securities prior to the record date
for the payment of Distributions thereafter. See "Certain Federal Income Tax
Consequences -- Interest Income and Original Issue Discount" and "-- Sales of
Capital Securities."
Should the Company elect to exercise its right to defer payments of
interest on the Junior Subordinated Debentures in the future, the market price
of the Capital Securities is likely to be affected. A holder that disposes of
its Capital Securities during an Extension Period, therefore, might not receive
the same return on its investment as a holder that continues to hold its Capital
Securities. In addition, merely as a result of the existence of the Company's
right to defer payments of interest on the Junior Subordinated Debentures, the
market price of the Capital Securities may be more volatile than the market
prices of other securities on which OID accrues and that are not subject to such
deferrals.
CONDITIONAL RIGHT TO SHORTEN MATURITY AND SPECIAL EVENT REDEMPTION
If a Tax Event (as defined below) occurs, then the Company will have the
right, prior to the termination of the Trust, either (i) to shorten the Stated
Maturity of the Junior Subordinated Debentures to the minimum extent required,
but not less than 20 years from the date of original issuance thereof, such that
in the written opinion of counsel experienced in such matters delivered to the
Company, after shortening the maturity, interest paid on the Junior Subordinated
Debentures will be deductible for federal income tax purposes (the action
referred to above being referred to herein as a "Tax Event Maturity Shortening")
or (ii) to prepay the Junior Subordinated Debentures, as described below.
Prospective investors should be aware that the Company's exercise of its right
to shorten the maturity of the Junior Subordinated Debentures will be a taxable
event to holders of the Capital Securities if the Junior Subordinated Debentures
are treated as equity for purposes of United States federal income taxation
before the maturity is shortened. See "Description of Exchange
Securities -- Description of Exchange Capital Securities -- Conditional Right to
Shorten Maturity and Special Event Redemption" and "Description of Exchange
Securities -- Description of Exchange Junior Subordinated
Debentures -- Conditional Right to Shorten Maturity and Special Event
Prepayment."
If a Tax Event or an Investment Company Event (as defined below) occurs,
then the Company will have the right, within 90 days following the occurrence of
such Tax Event or Investment Company Event, as the case may be, to prepay the
Junior Subordinated Debentures in whole (but not in part) in the manner set
forth
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<PAGE> 22
under "Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debentures -- Conditional Right to Shorten Maturity and Special
Event Prepayment," and therefore to cause a mandatory redemption of the Capital
Securities prior to the Stated Maturity (the circumstances under which the
Company has the right to so prepay the Exchange Junior Subordinated Debentures
in connection with a Tax Event being referred to herein as a "Conditional Tax
Redemption Event"). Each of a Conditional Tax Redemption Event or an Investment
Company Event is sometimes referred to herein as a "Special Event."
A "Tax Event" means the receipt by the Company and the Trust of an opinion
of counsel to the Company experienced in such matters to the effect that, as a
result of any amendment to, or change (including any announced prospective
change) in, the laws or any regulations thereunder of the United States or any
political subdivision or taxing authority thereof or therein or as a result of
any administrative pronouncement or judicial decision interpreting or applying
such laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of the original
issuance of the Capital Securities, or as a result of a final determination, as
evidenced by the execution of a Form 870 AD, arising from an audit or
examination by the Internal Revenue Service, there is more than an insubstantial
risk that (i) the Trust is, or will be within 90 days of the date of such
opinion, subject to United States federal income tax with respect to income
received or accrued on the Junior Subordinated Debentures, (ii) interest payable
by the Company on the Junior Subordinated Debentures is not, or within 90 days
of such opinion, will not be, deductible by the Company, in whole or in part,
for United States federal income tax purposes or (iii) the Trust is, or will be
within 90 days of the date of such opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental charges (each of the
circumstances referred to in clauses (i), (ii) and (iii) being referred to
herein as an "Adverse Tax Consequence").
An "Investment Company Event" means that the Company shall have received an
opinion of an independent counsel experienced in practice under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), to the effect
that, as a result of the occurrence of a change in law or regulation or a change
in interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in Investment
Company Act Law"), there is more than insubstantial risk that the Trust is or
will be considered an "investment company" which is required to be registered
under the Investment Company Act, which Change in Investment Company Act Law
becomes effective on or after the date of the original issuance of the Capital
Securities.
EXCHANGE OF CAPITAL SECURITIES FOR JUNIOR SUBORDINATED DEBENTURES
The Company, as the holder of all of the outstanding Common Securities,
will have the right at any time to terminate the Trust and cause a Like Amount
of Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities in liquidation of the Trust, subject to the Company's having received
an opinion by independent tax counsel experienced in such matters to the effect
that the holders will not recognize any gain or loss for United States federal
income tax purposes as a result of the dissolution of the Trust and such
distribution to holders of Capital Securities. See "Description of Exchange
Securities -- Description of Exchange Capital Securities -- Liquidation of the
Trust and Distribution of Exchange Junior Subordinated Debentures."
POSSIBLE TAX LAWS AFFECTING THE CAPITAL SECURITIES
On February 6, 1997, as part of the Clinton Administration's Fiscal 1998
Budget Proposal, the Treasury Department proposed legislation (the "Proposed
Legislation") which would, among other things, generally deny corporate issuers
a deduction for interest in respect of debt obligations, such as the Junior
Subordinated Debentures, issued on or after the date "of first committee
action," if such debt obligations have a maximum term in excess of 15 years and
are not shown as indebtedness on the issuer's applicable consolidated balance
sheet. In addition, the Proposed Legislation would generally deny corporate
issuers a deduction for interest in respect of certain debt obligations, such as
the Junior Subordinated Debentures, issued after the date "of first committee
action," if such debt obligations have a weighted average maturity of more than
40 years. The Proposed Legislation has not yet been introduced by any member of
the 105th Congress. If Congress were to enact any other proposed legislation,
and if such enactment gave rise to a Tax Event, the Company would be
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<PAGE> 23
permitted to cause a redemption of the Trust Securities at the Special Event
Prepayment Price by electing to prepay the Exchange Junior Subordinated
Debentures at the Special Event Prepayment Price. See "Certain Federal Income
Tax Consequences -- Proposed Tax Legislation."
POSSIBLE ADVERSE EFFECT ON MARKET PRICES
There can be no assurance as to the market prices for the Exchange Capital
Securities or the Exchange Junior Subordinated Debentures distributed to the
holders of Old Securities if a termination of the Trust were to occur.
Accordingly, the Exchange Capital Securities or the Exchange Junior Subordinated
Debentures may trade at a discount from the price that the investor paid to
purchase the Exchange Capital Securities offered hereby. Because holders of
Exchange Capital Securities may receive Exchange Junior Subordinated Debentures
in liquidation of the Trust and because Distributions are otherwise limited to
payments on the Exchange Junior Subordinated Debentures, prospective investors
of Exchange Capital Securities are also making an investment decision with
regard to the Exchange Junior Subordinated Debentures and should carefully
review all the information regarding the Exchange Junior Subordinated Debentures
contained herein. See "Description of Exchange Securities -- Description of
Exchange Junior Subordinated Debentures."
RIGHTS UNDER THE GUARANTEE
The Chase Manhattan Bank will act as Guarantee Trustee and will hold the
Exchange Guarantee for the benefit of the holders of the Exchange Capital
Securities. The Chase Manhattan Bank will also act as Property Trustee and as
Debenture Trustee under the Indenture. Chase Manhattan Bank Delaware will act as
Delaware Trustee under the Trust Agreement. The Old Guarantee guarantees, and
the Exchange Guarantee will guarantee, as the case may be, to the holders of the
Capital Securities the following payments, to the extent not paid by the Trust:
(i) any accumulated and unpaid Distributions required to be paid on the Capital
Securities, to the extent that the Trust has funds on hand legally available
therefor at such time, (ii) the applicable Redemption Price with respect to any
Capital Securities called for redemption, to the extent that the Trust has funds
on hand legally available therefor at such time, and (iii) upon a voluntary or
involuntary termination and liquidation of the Trust (unless the Junior
Subordinated Debentures are distributed to holders of the Capital Securities),
the lesser of (a) the aggregate of the Liquidation Amount and all accumulated
and unpaid Distributions to the date of payment, to the extent that the Trust
has funds on hand legally available therefor at such time and (b) the amount of
assets of the Trust remaining available for distribution to holders of the
Capital Securities upon a termination and liquidation of the Trust. The holders
of a majority in Liquidation Amount of the Exchange Capital Securities will have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Guarantee Trustee in respect of the Exchange
Guarantee or to direct the exercise of any trust power conferred upon the
Guarantee Trustee. Any holder of the Exchange Capital Securities may institute a
legal proceeding directly against the Company to enforce its rights under the
Exchange Guarantee without first instituting a legal proceeding against the
Trust, the Guarantee Trustee or any other person or entity. If the Company
defaults on its obligation to pay amounts payable under the Exchange Junior
Subordinated Debentures, the Trust will not have sufficient funds for the
payment of Distributions or amounts payable on liquidation of the Trust or
redemption of the Exchange Capital Securities or otherwise, and, in such event,
holders of the Exchange Capital Securities will not be able to rely upon the
Exchange Guarantee for payment of such amounts. Instead, in the event a
Debenture Event of Default shall have occurred and be continuing and such event
is attributable to the failure of the Company to pay principal of (or premium,
if any) or interest on the Exchange Junior Subordinated Debentures on the
payment date on which such payment is due and payable, then a holder of Exchange
Capital Securities may institute a legal proceeding directly against the Company
for enforcement of payment to such holder of the principal of (or premium, if
any) or interest on such Exchange Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Capital Securities of
such holder (a "Direct Action"). Notwithstanding any payments made to a holder
of Exchange Capital Securities by the Company in connection with a Direct
Action, the Company shall remain obligated to pay the principal of (and premium,
if any) and interest on the Exchange Junior Subordinated Debentures, and the
Company shall be subrogated to the rights of the holder of such Exchange Capital
Securities with respect to payments on the Exchange
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<PAGE> 24
Capital Securities to the extent of any payments made by the Company to such
holder in any Direct Action. Except as described herein, holders of Exchange
Capital Securities will not be able to exercise directly any other remedy
available to the holders of the Exchange Junior Subordinated Debentures or to
assert directly any other rights in respect of the Exchange Junior Subordinated
Debentures. See "Description of Exchange Securities -- Description of Exchange
Junior Subordinated Debentures -- Enforcement of Certain Rights by Holders of
Exchange Capital Securities," "-- Debenture Events of Default" and "Description
of Exchange Securities -- Description of Exchange Guarantee." The Trust
Agreement provides that each holder of Exchange Capital Securities by acceptance
thereof agrees to the provisions of the Indenture.
LIMITED VOTING RIGHTS
Holders of Exchange Capital Securities will generally have limited voting
rights relating only to the modification of the Exchange Capital Securities, the
termination or liquidation of the Trust, and the exercise of the Trust's rights
as holder of Exchange Junior Subordinated Debentures. Holders of Exchange
Capital Securities will not be entitled to vote to appoint, remove or replace
the Property Trustee or the Delaware Trustee, and such voting rights are vested
exclusively in the holder of the Common Securities except upon the occurrence of
certain events described herein. The Property Trustee, the Administrative
Trustees and the Company may amend the Trust Agreement without the consent of
holders of Exchange Capital Securities to ensure that the Trust will be
classified for United States federal income tax purposes as a grantor trust even
if such action adversely affects the interests of such holders. See "Description
of Exchange Securities -- Description of Exchange Capital Securities -- Voting
Rights; Amendment of the Trust Agreement" and "-- Removal of Issuer Trustees."
CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES
The Old Capital Securities have not been registered under the Securities
Act or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements of
the Securities Act and any other applicable securities laws, or pursuant to an
exemption therefrom or in a transaction not subject thereto, and in each case in
compliance with certain other conditions and restrictions. Old Capital
Securities which remain outstanding after consummation of the Exchange Offer
will continue to bear a legend reflecting such restrictions on transfer. In
addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights Agreement (subject to certain
limited exceptions). The Company and the Trust do not intend to register under
the Securities Act any Old Capital Securities which remain outstanding after
consummation of the Exchange Offer (subject to such limited exceptions, if
applicable). To the extent that Old Capital Securities are tendered and accepted
in the Exchange Offer, a holder's ability to sell untendered Old Capital
Securities could be adversely affected.
The Exchange Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will vote together as a
single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain actions
or exercised certain rights under the Trust Agreement. See "Description of
Exchange Securities -- Description of Exchange Capital Securities -- Voting
Rights; Amendment of the Trust Agreement."
The Registration Rights Agreement provides, among other things, that, if an
Exchange Offer Registration Statement or a Shelf Registration Statement (if
required to be filed) is not declared effective by the Commission on or prior to
July 25, 1997, Additional Interest shall accrue on the principal amount of the
Junior Subordinated Debentures affected thereby, and Additional Distributions
will accumulate on the Liquidation Amount of the Trust Securities affected
thereby, commencing July 28, 1997, at a rate of 0.25% per annum of the
Liquidation Amount of such Old Capital Securities for the period from the
occurrence of such event until such time as the Exchange Offer Registration
Statement or any required Shelf Registration Statement is declared effective. In
addition, if the Exchange Offer is not consummated on or prior to the 30th day
after the date on which the Exchange Offer Registration Statement is declared
effective, Additional Interest shall accrue on the principal amount of the
Junior Subordinated Debentures affected thereby, and
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<PAGE> 25
Additional Distributions will accumulate on the Liquidation Amount of the Trust
Securities affected thereby until the Exchange Offer is consummated. Upon the
consummation of the Exchange Offer, the Trust and the Company will have
satisfied their obligations under the Registration Rights Agreement and holders
of Old Capital Securities will not be entitled to any such additional
Distributions thereon or any further registration rights under the Registration
Rights Agreement, except under limited circumstances with respect to certain
broker-dealers. See "Description of Old Securities."
ABSENCE OF PUBLIC MARKET
The Old Capital Securities were issued to, and the Company believes the Old
Capital Securities are currently owned by, a relatively small number of
beneficial owners. The Old Capital Securities have not been registered under the
Securities Act and will be subject to restrictions on transferability if they
are not exchanged for the Exchange Capital Securities. Although the Exchange
Capital Securities generally may be resold or otherwise transferred by the
holders (who are not affiliates of the Company or the Trust) without compliance
with the registration requirements under the Securities Act, they will
constitute a new issue of securities with no established trading market. Old
Capital Securities may be transferred by the holders thereof only in blocks
having a Liquidation Amount of not less than $100,000 (100 Old Capital
Securities). Exchange Capital Securities may be transferred by the holders
thereof in blocks having a Liquidation Amount of $1,000 (one Exchange Capital
Security) or integral multiples thereof. The Company and the Trust have been
advised by the Initial Purchaser that the Initial Purchaser presently intends to
make a market in the Exchange Capital Securities. However, the Initial Purchaser
is not obligated to do so and any market-making activity with respect to the
Exchange Capital Securities may be discontinued at any time without notice. In
addition, such market-making activity will be subject to the limits imposed by
the Securities Act and the Exchange Act and may be limited during the Exchange
Offer. Accordingly, no assurance can be given that an active public or other
market will develop for the Exchange Capital Securities or the Old Capital
Securities or as to the liquidity of or the trading market for the Exchange
Capital Securities or the Old Capital Securities. If an active public market
does not develop, the market price and liquidity of the Exchange Capital
Securities may be adversely affected.
If a public trading market develops for the Exchange Capital Securities,
future trading prices will depend on many factors, including, among other
things, prevailing interest rates, the Company's results and the market for
similar securities. Depending on prevailing interest rates, the market for
similar securities and other factors, including the financial condition of the
Company, the Exchange Capital Securities may trade at a discount.
Notwithstanding the registration of the Exchange Capital Securities in the
Exchange Offer, holders who are affiliates of the Company or the Trust may
publicly offer for sale or resell the Exchange Capital Securities only in
compliance with the provisions of Rule 144 under the Securities Act or pursuant
to another effective registration statement.
Each broker-dealer that receives Exchange Capital Securities for its own
account in exchange for Old Capital Securities, where such Old Capital
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Capital Securities.
See "Plan of Distribution."
FLUCTUATION AND UNCERTAINTY OF PROPERTY AND CASUALTY REINSURANCE INDUSTRY
RESULTS
The results of companies in the property and casualty reinsurance industry
historically have been subject to significant fluctuations and uncertainties.
The industry's profitability can be affected significantly by volatile and
unpredictable developments (including catastrophes); changes in reserves
resulting from the general claims and legal environments as different types of
claims arise and judicial interpretations relating to the scope of insurers' and
reinsurers' liability develop; fluctuations in interest rates and other changes
in the investment environment which affect returns on invested capital; and
inflationary pressures that affect the size of losses. The demand for property
and casualty reinsurance can also vary significantly, generally rising as the
overall level of economic activity increases and falling as such activity
decreases. The property and casualty
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<PAGE> 26
reinsurance industry historically has been cyclical, and the industry as a whole
has been in a softening market since the late 1980s primarily due to premium
rate competition, which has resulted in lower underwriting profitability. The
Company's results of operations may be adversely affected by these fluctuations
and uncertainties.
UNCERTAINTY REGARDING ADEQUACY OF LOSS RESERVES
The Company maintains loss reserves to cover its estimated ultimate
liability for losses and loss adjustment expenses with respect to reported and
unreported claims incurred as of the end of each accounting period. Reserves do
not represent an exact calculation of liability, but instead represent
estimates, generally involving actuarial projections at a given time, of what
the Company expects the ultimate settlement and administration of claims will
cost based on its assessment of facts and circumstances then known, estimates of
future trends in claims severity, frequency, judicial theories of liability and
other factors. These variables are affected by both internal and external
events, such as changes in ceding companies' claims handling procedures,
economic inflation, judicial trends and legislative changes. Many of these items
are not directly quantifiable, particularly on a prospective basis.
Additionally, there may be significant reporting lags between the occurrence of
the reinsured event and the time it is actually reported to the reinsurer.
Reserve estimates are continually refined in a regular ongoing process as
experience develops and further claims are reported and settled. Adjustments to
reserves are reflected in the results of the periods in which such estimates are
changed. Because establishment of reserves is an inherently uncertain process
involving estimates of future losses, there can be no certainty that currently
established reserves will prove adequate in light of subsequent actual
experience. The inherent uncertainties of estimating loss reserves are generally
greater for casualty coverages than for property coverages, due primarily to the
longer period of time that typically elapses before a definitive determination
of ultimate loss can be made, changing theories of legal liability involving
certain types of claims and changing political climates.
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USE OF PROCEEDS
Neither the Company nor the Trust will receive any cash proceeds from the
issuance of the Exchange Capital Securities offered hereby. In consideration for
issuing the Exchange Capital Securities in exchange for Old Capital Securities
as described in this Prospectus, the Trust will receive Old Capital Securities
in like Liquidation Amount. The Old Capital Securities surrendered in exchange
for the Exchange Capital Securities will be retired and cancelled.
The proceeds to the Trust (without giving effect to expenses of the
offering payable by the Company) from the offering of the Old Capital Securities
were $110,000,000. All of the proceeds from the sale of Old Capital Securities
were invested by the Trust in the Junior Subordinated Debentures. The Company
used approximately $46,997,000 of the net proceeds from the sale of the Old
Junior Subordinated Debentures to redeem its 6% Convertible Debentures due
December 15, 1999 (the "Convertible Debentures") at a redemption price equal to
102.57% of the aggregate principal amount of Convertible Debentures so redeemed,
plus accrued and unpaid interest thereon to the date of redemption. Of the
$103,500,000 aggregate principal amount of Convertible Debentures which were
outstanding on January 31, 1997, $45,819,000 principal amount were redeemed and
$57,681,000 principal amount were converted into an aggregate of 1,783,926
shares of the Company's Common Stock, par value $.10 share.* The amount of any
remaining net proceeds are to be used for general corporate purposes, which may
include investments in and advances to subsidiaries, the financing of growth and
expansion, the financing of possible future acquisitions, stock repurchases and
other corporate purposes.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of the Company for the three months ended March 31, 1997 and for the
five years ended December 31, 1996:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
- ------------------ ------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
- ------------------ -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
6.0 7.4 6.6 4.4 5.2 11.2
</TABLE>
The consolidated ratios of earnings to fixed charges represent the number
of times fixed charges (interest expense and one-third of all rent expense,
considered to represent an appropriate interest factor, charged to income) are
covered by income before income taxes, extraordinary item, cumulative effect of
accounting change and fixed charges.
ACCOUNTING TREATMENT
The financial statements of the Trust (the sole assets of which are the
8.82% Junior Subordinated Debentures due February 1, 2037 of Trenwick Group
Inc.) are reflected in the Company's consolidated financial statements with the
Capital Securities shown as "Company-obligated mandatorily redeemable preferred
capital securities of subsidiary trust holding solely Junior Subordinated
Debentures of Trenwick." Disclosures about the Capital Securities, the Guarantee
and the Junior Subordinated Debentures will be included in the notes to the
consolidated financial statements. The Company will record Distributions payable
on the Capital Securities as an expense in its consolidated statement of
earnings.
- ---------------
*All share and per share information reflects a 3 for 2 stock split, paid on
April 15, 1997.
17
<PAGE> 28
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company as of March 31, 1997 and December 31, 1996.
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
-------- ------------
(IN THOUSANDS)
<S> <C> <C>
Convertible debentures............................... $ -- $ 103,500
-------- --------
Company-obligated mandatorily redeemable preferred
capital securities of subsidiary trust holding
solely Junior Subordinated Debentures of
Trenwick*.......................................... 110,000 --
-------- --------
Preferred stock, $.10 par value, 1,000,000 shares
authorized; none outstanding....................... -- --
-------- --------
Common stockholders' equity:**
Common stock, $.10 par value, 22,500,000 shares
authorized; 11,936,442 and 10,087,826 shares
outstanding..................................... 1,194 1,009
Additional paid-in capital......................... 153,406 94,423
Retained earnings.................................. 165,411 159,512
Net unrealized appreciation of securities available
for sale, net of income taxes................... 3,635 11,789
Deferred compensation under stock award plan....... (1,172) (980)
-------- --------
Total common stockholders' equity.................. $322,474 $ 265,753
-------- --------
Total capitalization............................ $432,474 $ 369,253
======== ========
</TABLE>
- ---------------
*As described herein, the proceeds from the sale of the Old Capital Securities
were used to purchase $110,000,000 aggregate principal amount of 8.82% Junior
Subordinated Debentures due February 1, 2037.
**All share and per share information reflects a 3 for 2 stock split, paid on
April 15, 1997.
18
<PAGE> 29
SELECTED FINANCIAL DATA
The data below should be read in connection with the financial information
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1996 and Quarterly Report on Form 10-Q and Form 10-Q/A for the quarter ended
March 31, 1997. Results for the quarter ended March 31, 1997 are not necessarily
indicative of results which may be expected for any other interim period or for
the year as a whole.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEARS ENDED DECEMBER 31,
----------------------- ------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Net premiums written.............. $ 59,558 $ 58,883 $226,364 $197,162 $139,635 $101,392 $ 81,883
======= ======= ======== ======== ======== ======== ========
Net premiums earned............... $ 53,914 $ 47,691 $211,069 $177,394 $132,683 $ 93,180 $ 81,831
Net investment income............. 11,729 9,869 41,226 36,828 33,932 34,954 30,859
Net realized investment gains
(losses)........................ 1,915 50 299 368 (196) 1,842 181
Service fees...................... -- -- -- -- -- -- 206
------- ------- -------- -------- -------- -------- --------
Total revenues.................... $ 67,558 $ 57,610 $252,594 $214,590 $166,419 $129,976 $113,077
======= ======= ======== ======== ======== ======== ========
Income before extraordinary
item............................ $ 9,801 $ 8,182 $ 33,848 $ 29,841 $ 20,282 $ 23,739 $ 18,539
Extraordinary loss on debt
redemption net of income tax.... 1,037 -- -- -- -- -- --
------- ------- -------- -------- -------- -------- --------
Net income........................ $ 8,764 $ 8,182 $ 33,848 $ 29,841 $ 20,282 $ 23,739 $ 18,539
======= ======= ======== ======== ======== ======== ========
PER SHARE DATA
Primary earnings:
Income before extraordinary
item.............................. $ 0.89 $ 0.80 $ 3.30 $ 2.96 $ 2.03 $ 2.32 $ 1.84
Extraordinary loss................ (0.10) -- -- -- -- -- --
------- ------- -------- -------- -------- -------- --------
Net income........................ $ 0.79 $ 0.80 $ 3.30 $ 2.96 $ 2.03 $ 2.32 $ 1.84
======= ======= ======== ======== ======== ======== ========
Fully diluted earnings (assuming
conversion of dilutive
convertible securities):
Income before extraordinary
item............................ $ 0.81 $ 0.69 $ 2.83 $ 2.53 $ 1.85 $ 2.08 $ 1.84
Extraordinary loss................ (0.06) -- -- -- -- -- --
------- ------- -------- -------- -------- -------- --------
Net income........................ $ 0.75 $ 0.69 $ 2.83 $ 2.53 $ 1.85 $ 2.08 $ 1.84
======= ======= ======== ======== ======== ======== ========
Dividends per common share........ $ .24 $ .21 $ .83 $ .75 $ .67 $ .5 $ .51
======= ======= ======== ======== ======== ======== ========
BALANCE SHEET DATA
Investments and cash.............. $ 825,487 $675,874 $754,210 $653,704 $551,784 $546,303 $500,359
Total assets...................... 1,021,062 850,323 920,804 820,930 727,245 700,407 652,473
Unpaid claims and claims
expenses........................ 481,974 427,158 467,177 411,874 389,298 354,582 351,897
Convertible debentures............ -- 103,500 103,500 103,500 103,500 103,500 103,500
Company-obligated mandatorily
redeemable preferred capital
securities of subsidiary trust
holding solely Junior
Subordinated Debentures of
Trenwick........................ 110,000 -- -- -- -- -- --
Total common stockholders'
equity.......................... 322,474 239,338 265,753 240,776 188,213 206,763 169,373
Shares of common stock
outstanding..................... 11,936 9,902 10,088 9,886 9,660 9,874 9,765
Book value per common share....... $ 27.02 $ 24.17 $ 26.34 $ 24.36 $ 19.48 $ 20.94 $ 17.35
CERTAIN GAAP FINANCIAL RATIOS
Combined ratio.................... 96.7% 95.3% 95.8% 95.6% 103.2% 102.5% 112.3%
Net premiums written to surplus
ratio........................... N/A N/A 0.85:1 0.82:1 0.74:1 0.49:1 0.48:1
Unpaid claims and claims expenses
to surplus ratio................ 1.49:1 1.78:1 1.76:1 1.71:1 2.07:1 1.71:1 2.08:1
</TABLE>
- ---------------
All share and per share information reflects a 3 for 2 stock split, paid on
April 15, 1997.
19
<PAGE> 30
TRENWICK GROUP INC.
Trenwick Group Inc. is a holding company whose operating subsidiary,
Trenwick America Reinsurance Corporation ("Trenwick America Re"), provides
treaty and facultative reinsurance to insurers of property and casualty risks in
the United States. Trenwick America Re's business is primarily obtained through
brokers and reinsurance intermediaries. The major portion of the reinsurance it
writes is automobile liability, professional liability and general liability.
Reinsurance is provided both on an excess of loss and quota share basis. In
addition to underwriting reinsurance on its own account, Trenwick America Re
participates in specialized segments of the reinsurance market through strategic
alliances with leaders in those segments. Over the five-year period ending
December 31, 1996, the combined ratio of the Company's reinsurance operations,
computed on the basis of generally accepted accounting principles, substantially
improved from 112.3% in 1992 to 95.8% in 1996.
Trenwick America Re is licensed or otherwise authorized to conduct
reinsurance business in every state and the District of Columbia. Trenwick
America Re is rated "A+ (Superior)" by A.M. Best Company, an independent
insurance industry rating organization, and its claims-paying ability is rated
"A+ (Good)" by Standard & Poor's Rating Services. A.M. Best ratings are
primarily based upon factors relevant to policyholders and are not directed
toward the protection of investors.
TRENWICK CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) the Declaration of Trust dated as of January 21, 1997 executed by the
Company as Sponsor and Chase Manhattan Bank Delaware as Delaware Trustee, and
(ii) the filing of a certificate of trust with the Delaware Secretary of State
on January 21, 1997. The Trust exists for the exclusive purposes of (i) issuing
and selling the Trust Securities, (ii) effecting the Exchange Offer or filing a
Shelf Registration Statement, (iii) using the proceeds from the sale of Trust
Securities to acquire Junior Subordinated Debentures, (iv) making Distributions
to holders of the Trust Securities as provided in the Trust Agreement and (v)
engaging in only those other activities necessary, advisable or incidental
thereto (such as registering the transfer of the Trust Securities). Accordingly,
the Junior Subordinated Debentures will be the sole assets of the Trust, and
payments under the Junior Subordinated Debentures will be the sole revenues of
the Trust. All of the Common Securities are owned by the Company. The Common
Securities will rank pari passu, and payments will be made thereon pro rata,
with the Exchange Capital Securities, except that upon the occurrence and
continuance of an event of default under the Trust Agreement resulting from a
Debenture Event of Default, the rights of the Company as holder of the Common
Securities to payments in respect of Distributions and payments upon
liquidation, redemption or otherwise will be subordinated to the rights of the
holders of the Capital Securities. See "Description of Exchange
Securities -- Description of Exchange Capital Securities -- Subordination of
Common Securities." The Company has acquired Common Securities in a Liquidation
Amount equal to 3% of the total capital of the Trust. The Trust has a term of 45
years, but may terminate earlier as provided in the Trust Agreement. The Trust's
business and affairs are conducted by its trustees, each appointed by the
Company as holder of the Common Securities. The trustees for the Trust are The
Chase Manhattan Bank as the Property Trustee, Chase Manhattan Bank Delaware as
the Delaware Trustee, and three individual trustees as the Administrative
Trustees who are employees or officers of or affiliated with the Company
(collectively, the "Issuer Trustees"). The Chase Manhattan Bank, as Property
Trustee, acts as sole indenture trustee under the Trust Agreement. The Chase
Manhattan Bank also acts as indenture trustee under the Guarantee and the
Indenture. See "Description of Exchange Securities -- Description of Exchange
Guarantee" and "-- Description of Exchange Junior Subordinated Debentures." The
holder of the Common Securities of the Trust or, if an Event of Default under
the Trust Agreement has occurred and is continuing, the holders of a majority in
Liquidation Amount of the Capital Securities will be entitled to appoint, remove
or replace the Property Trustee and/or the Delaware Trustee. In no event will
the holders of the Capital Securities have the right to vote to appoint, remove
or replace the Administrative Trustees; such voting rights will be vested
exclusively in the holder of the Common Securities. The duties and obligations
of each Issuer Trustee are governed by the Trust Agreement. The Company will pay
all fees, expenses, debts and obligations (other than the Trust Securities)
related to the Trust and the offering of the Capital Securities and will pay,
directly or indirectly, all
20
<PAGE> 31
ongoing costs, expenses and liabilities of the Trust. The principal executive
office of the Trust is Trenwick Capital Trust I, c/o Trenwick Group Inc., Metro
Center, One Station Place, Stamford, CT 06902.
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, the Company and
the Trust entered into the Registration Rights Agreement with the Initial
Purchaser, pursuant to which the Company and the Trust agreed to file and to use
their reasonable best efforts to cause to become effective with the Commission a
registration statement with respect to the exchange of the Old Capital
Securities for other capital securities with terms identical in all material
respects to the terms of the Old Capital Securities. A copy of the Registration
Rights Agreement has been filed as an Exhibit to the Registration Statement of
which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual obligations of
the Company and the Trust under the Registration Rights Agreement. The form and
terms of the Exchange Capital Securities are the same as the form and terms of
the Old Capital Securities except that the Exchange Capital Securities have been
registered under the Securities Act and will not be subject to the $100,000
minimum Liquidation Amount transfer restriction and certain other restrictions
on transfer applicable to the Old Capital Securities. The Exchange Capital
Securities will not provide, as do the Old Capital Securities, for the accrual
of Additional Interest on the Junior Subordinated Debentures affected thereby,
or for the accumulation of Additional Distributions on the Trust Securities
affected thereby, if the Exchange Offer Registration Statement is not declared
effective or the Exchange Offer is not consummated, or any required Shelf
Registration Statement is not declared effective. Upon the consummation of the
Exchange Offer, the Company and the Trust will have satisfied their obligations
under the Registration Rights Agreement and holders of Old Capital Securities
will not be entitled to any such additional Distributions thereon or any further
registration rights under the Registration Rights Agreement, except under
limited circumstances with respect to certain broker-dealers. See "Risk
Factors -- Consequences of a Failure to Exchange Old Capital Securities" and
"Description of Old Securities."
The Exchange Offer is not being made to, nor will the Trust accept tenders
for exchange from, holders of Old Capital Securities in any jurisdiction in
which the Exchange Offer or the acceptance thereof would not be in compliance
with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to
the Exchange Offer means any person in whose name the Old Capital Securities are
registered on the books of the Trust or any other person who has obtained a
properly completed bond power from such holder, or any person whose Old Capital
Securities are held of record by The Depository Trust Company ("DTC") who
desires to deliver such Old Capital Securities by book-entry transfer at DTC.
Pursuant to the Exchange Offer, the Company will exchange as soon as
practicable after the date hereof the Old Guarantee for the Exchange Guarantee
and the Old Junior Subordinated Debentures, in an amount corresponding to the
Old Capital Securities accepted for exchange, for a like aggregate principal
amount of the Exchange Junior Subordinated Debentures. The Exchange Guarantee
and Exchange Junior Subordinated Debentures have been registered under the
Securities Act.
TERMS OF THE EXCHANGE OFFER
The Trust hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $110,000,000 aggregate Liquidation Amount of
21
<PAGE> 32
Exchange Capital Securities for a like aggregate Liquidation Amount of Old
Capital Securities properly tendered on or prior to the Expiration Date and not
properly withdrawn in accordance with the procedures described below. The Trust
will issue, promptly after the Expiration Date, an aggregate Liquidation Amount
of up to $110,000,000 of Exchange Capital Securities in exchange for a like
principal amount of outstanding Old Capital Securities tendered and accepted in
connection with the Exchange Offer. Old Capital Securities may be tendered in
the Exchange Offer for exchange in whole or in part in any integral multiples of
$1,000 Liquidation Amount (one Old Capital Security) notwithstanding the
requirement, applicable to all other transfers of Capital Securities, of a
minimum transfer amount of $100,000 in Liquidation Amount. For purposes of
tenders of Old Capital Securities in the Exchange Offer, the requirement for
minimum transfers of $100,000 Liquidation Amount will be waived.
The Exchange Offer is not conditioned upon any minimum Liquidation Amount
of Old Capital Securities being tendered. As of the date of this Prospectus,
$110,000,000 aggregate Liquidation Amount of Old Capital Securities is
outstanding.
Holders of Old Capital Securities do not have any appraisal or dissenters'
rights in connection with the Exchange Offer. Old Capital Securities which are
not tendered for or are tendered but not accepted in connection with the
Exchange Offer will remain outstanding and be entitled to the benefits of the
Trust Agreement, but will not be entitled to any further registration rights
under the Registration Rights Agreement, except under limited circumstances with
respect to certain broker-dealers. See "Risk Factors -- Consequences of a
Failure to Exchange Old Capital Securities" and "Description of Old Securities."
If any tendered Old Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Old Capital Securities
will be returned, without expense, to the tendering holder thereof promptly
after the Expiration Date.
Holders who tender Old Capital Securities in connection with the Exchange
Offer will not be required to pay brokerage commissions or fees or, subject to
the instructions in the Letter of Transmittal, transfer taxes with respect to
the exchange of Old Capital Securities in connection with the Exchange Offer.
The Company will pay all charges and expenses, other than certain applicable
taxes described below, in connection with the Exchange Offer. See "-- Fees and
Expenses."
NEITHER THE COMPANY, THE BOARD OF DIRECTORS OF THE COMPANY NOR ANY ISSUER
TRUSTEE OF THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL
SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION
OF THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO
ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL
SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES TO
TENDER BASED ON SUCH HOLDERS OWN FINANCIAL POSITION AND REQUIREMENTS.
The term "Expiration Date" means 5:00 p.m., New York City time, on
, 1997 unless the Exchange Offer is extended by the Company or the
Trust (in which case the term "Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended). The Company and the Trust have no
present expectation that the Expiration Date will be extended.
The Company and the Trust expressly reserve the right in their sole and
absolute discretion, subject to applicable law, at any time and from time to
time, to (i) delay the acceptance of the Old Capital Securities for exchange,
(ii) terminate the Exchange Offer (whether or not any Old Capital Securities
have theretofore been accepted for exchange) if the Trust determines, in its
sole and absolute discretion, that any of the events or conditions referred to
under "-- Conditions to the Exchange Offer" have occurred or exist or have not
been satisfied, (iii) extend the Expiration Date of the Exchange Offer and
retain all Old Capital Securities tendered pursuant to the Exchange Offer,
subject, however, to the right of holders of Old Capital Securities to withdraw
their tendered Old Capital Securities as described under "-- Withdrawal Rights,"
and (iv) waive any
22
<PAGE> 33
condition or otherwise amend the terms of the Exchange Offer in any respect. If
the Exchange Offer is amended in a manner determined by the Company and the
Trust to constitute a material change, or if the Company and the Trust waive a
material condition of the Exchange Offer, the Company and the Trust will
promptly disclose such amendment by means of a Prospectus supplement that will
be distributed to the holders of the Old Capital Securities, and the Company and
the Trust will extend the Exchange Offer to the extent required by Rule 14e-1
under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and by
making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Company and the Trust may choose to make any public
announcement and subject to applicable law, the Company and the Trust shall have
no obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to an appropriate news agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF EXCHANGE CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer, the
Trust will exchange, and will issue to the Exchange Agent, Exchange Capital
Securities for Old Capital Securities validly tendered and not withdrawn
promptly after the Expiration Date.
In all cases, delivery of Exchange Capital Securities in exchange for Old
Capital Securities tendered and accepted for exchange pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of (i) Old
Capital Securities or a book-entry confirmation of a book-entry transfer of Old
Capital Securities into the Exchange Agent's account at DTC, including an
Agent's Message if the tendering holder has not delivered a Letter of
Transmittal, (ii) the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees or (in the
case of a book-entry transfer) an Agent's Message in lieu of the Letter of
Transmittal, and (iii) any other documents required by the Letter of
Transmittal.
The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's account
at DTC. The term "Agent's Message" means a message transmitted by DTC to and
received by the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgement from the tendering
Participant (as defined herein), which acknowledgement states that such
Participant has received and agrees to be bound by the Letter of Transmittal and
that the Trust and the Company may enforce such Letter of Transmittal against
such Participant.
Subject to the terms and conditions of the Exchange Offer, the Trust will
be deemed to have accepted for exchange, and thereby exchanged, Old Capital
Securities validly tendered and not withdrawn as, if and when the Trust gives
oral or written notice to the Exchange Agent of the Trust's acceptance of such
Old Capital Securities for exchange pursuant to the Exchange Offer. The Exchange
Agent will act as agent for the Trust for the purpose of receiving tenders of
Old Capital Securities, Letters of Transmittal and related documents, and as
agent for tendering holders for the purpose of receiving Old Capital Securities,
Letters of Transmittal and related documents and transmitting Exchange Capital
Securities to validly tendering holders. Such exchange will be made promptly
after the Expiration Date. If for any reason whatsoever, acceptance for exchange
or the exchange of any Old Capital Securities tendered pursuant to the Exchange
Offer is delayed (whether before or after the Trust's acceptance for exchange of
Old Capital Securities) or the Trust extends the Exchange Offer or is unable to
accept for exchange or exchange Old Capital Securities tendered pursuant to the
Exchange Offer, then, without prejudice to the Trust's rights set forth herein,
the Exchange Agent may, nevertheless, on behalf of the Trust and subject to Rule
14e-1(c) under the Exchange Act, retain tendered Old Capital Securities and such
Old Capital Securities may not be withdrawn except to the extent tendering
holders are entitled to withdrawal rights as described under "-- Withdrawal
Rights."
Pursuant to the Letter of Transmittal or Agent's Message in lieu thereof, a
holder of Old Capital Securities will warrant and agree in the Letter of
Transmittal that it has full power and authority to tender,
23
<PAGE> 34
exchange, sell, assign and transfer Old Capital Securities, that the Trust will
acquire good, marketable and unencumbered title to the tendered Old Capital
Securities, free and clear of all liens, restrictions, charges and encumbrances,
and the Old Capital Securities tendered for exchange are not subject to any
adverse claims or proxies. The holder also will warrant and agree that it will,
upon request, execute and deliver any additional documents deemed by the Trust
or the Exchange Agent to be necessary or desirable to complete the exchange,
sale, assignment, and transfer of the Old Capital Securities tendered pursuant
to the Exchange Offer.
PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
VALID TENDER. Except as set forth below, for Old Capital Securities to be
validly tendered pursuant to the Exchange Offer, a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees or (in the case of a book-entry tender) an Agent's Message
in lieu of the Letter of Transmittal and any other required documents, must be
received by the Exchange Agent at one of its addresses set forth under
"-- Exchange Agent," on or prior to the Expiration Date and (i) tendered Old
Capital Securities must be received by the Exchange Agent, or (ii) such Old
Capital Securities must be tendered pursuant to the procedures for book-entry
transfer set forth below and a book-entry confirmation, including an Agent's
Message if the tendering holder has not delivered a Letter of Transmittal must
be received by the Exchange Agent, in each case on or prior to the Expiration
Date, or (iii) the guaranteed delivery procedures set forth below must be
complied with.
If less than all of the Old Capital Securities are tendered, a tendering
holder should fill in the amount of Old Capital Securities being tendered in the
appropriate box on the Letter of Transmittal or so indicate in an Agent's
Message in lieu of the Letter of Transmittal. The entire amount of Old Capital
Securities delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER,
AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER. The Exchange Agent will establish an account with
respect to the Old Capital Securities at DTC for purposes of the Exchange Offer
no later than two (2) business days after the date of this Prospectus. Any
financial institution that is a participant in DTC's book-entry transfer
facility system may make a book-entry delivery of the Old Capital Securities by
causing DTC to transfer such Old Capital Securities into the Exchange Agent's
account at DTC in accordance with DTC's procedures for transfers. However,
although delivery of Old Capital Securities may be effected through book-entry
transfer into the Exchange Agent's account at DTC, the Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees or an Agent's Message in lieu of a Letter of Transmittal
and any other required documents, must in any case be delivered to and received
by the Exchange Agent at its address set forth under "-- Exchange Agent" on or
prior to the Expiration Date, or the guaranteed delivery procedure set forth
below must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
SIGNATURE GUARANTEES. Certificates for the Old Capital Securities need not
be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (a) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the certificate
or (b) such holder completes the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" in the Letter of Transmittal. In the case of (a)
or (b) above, such certificates for Old Capital Securities must be duly endorsed
or accompanied by a properly executed bond power, with the endorsement or
signature on the bond power and on the Letter of Transmittal guaranteed by a
firm or other entity identified in Rule 17Ad-15 under
24
<PAGE> 35
the Exchange Act as an "eligible guarantor institution," including (as such
terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal
securities broker or dealer or government securities broker or dealer; (iii) a
credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association (an "Eligible Institution"),
unless surrendered on behalf of such Eligible Institution. See Instruction 1 to
the Letter of Transmittal.
GUARANTEED DELIVERY. If a holder desires to tender Old Capital Securities
pursuant to the Exchange Offer and the certificates for such Old Capital
Securities are not immediately available or time will not permit all required
documents to reach the Exchange Agent on or prior to the Expiration Date, or the
procedure for book-entry transfer cannot be completed on a timely basis, such
Old Capital Securities may nevertheless be tendered, provided that all of the
following guaranteed delivery procedures are complied with:
(a) such tenders are made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of Transmittal,
is received by the Exchange Agent, as provided below, on or prior to the
Expiration Date; and
(c) the certificates (or a book-entry confirmation) representing all
tendered Old Capital Securities, in proper form for transfer, together with
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof or Agent's Message in lieu thereof), with any required signature
guarantees and any other documents required by the Letter of Transmittal,
are received by the Exchange Agent within three (3) NASDAQ trading days
after the date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted
by facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of Exchange
Capital Securities in exchange for Old Capital Securities tendered and accepted
for exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities, or of a
book-entry confirmation with respect to such Old Capital Securities, and a
properly completed and duly executed Letter of Transmittal (or facsimile thereof
or Agent's Message in lieu thereof), together with any required signature
guarantees and any other documents required by the Letter of Transmittal.
Accordingly, the delivery of Exchange Capital Securities might not be made to
all tendering holders at the same time, and will depend upon when Old Capital
Securities, book-entry confirmations with respect to Old Capital Securities and
other required documents are received by the Exchange Agent.
The Trust's acceptance for exchange of Old Capital Securities tendered
pursuant to any of the procedures described above will constitute a binding
agreement between the tendering holder and the Trust upon the terms and subject
to the conditions of the Exchange Offer.
DETERMINATION OF VALIDITY. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Old Capital Securities will be determined by the Company and the
Trust, in their sole discretion, whose determination shall be final and binding
on all parties. The Company and the Trust reserve the absolute right, in their
sole and absolute discretion, to reject any and all tenders determined by them
not to be in proper form or the acceptance of which, or exchange for, may, in
the opinion of counsel to the Company and the Trust, be unlawful. The Company
and the Trust also reserve the absolute right, subject to applicable law, to
waive any of the conditions of the Exchange Offer as set forth under
"-- Conditions to the Exchange Offer" or any condition or irregularity in any
tender of Old Capital Securities of any particular holder whether or not similar
conditions or irregularities are waived in the case of other holders.
The interpretation by the Company and the Trust of the terms and conditions
of the Exchange Offer (including the Letter of Transmittal and the instructions
thereto) will be final and binding. No tender of Old Capital Securities will be
deemed to have been validly made until all irregularities with respect to such
tender have been cured or waived. Neither the Company, the Trust, any affiliates
or assigns of the Company or the
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Trust, the Exchange Agent nor any other person shall be under any duty to give
any notification of any irregularities in tenders or incur any liability for
failure to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney,
or any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the Company
and the Trust, proper evidence satisfactory to the Company and the Trust, in
their sole discretion, of such person's authority to so act must be submitted.
A beneficial owner of Old Capital Securities that are held by or registered
in the name of a broker, dealer, commercial bank, trust company or other nominee
or custodian is urged to contact such entity promptly if such beneficial holder
wishes to participate in the Exchange Offer.
RESALES OF EXCHANGE CAPITAL SECURITIES
The Trust is making the Exchange Offer for the Exchange Capital Securities
in reliance on the position of the staff of the Division of Corporation Finance
of the Commission as set forth in certain interpretive letters addressed to
third parties in other transactions. However, neither the Company nor the Trust
sought its own interpretive letter and there can be no assurance that the staff
of the Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such interpretive
letters to third parties. Based on these interpretations by the staff of the
Division of Corporation Finance of the Commission, and subject to the two
immediately following sentences, the Company and the Trust believe that Exchange
Capital Securities issued pursuant to this Exchange Offer in exchange for Old
Capital Securities may be offered for resale, resold and otherwise transferred
by a holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such Exchange Capital Securities are acquired in
the ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such Exchange Capital Securities. However, any holder of Old Capital Securities
who is an "affiliate" of the Company or the Trust or who intends to participate
in the Exchange Offer for the purpose of distributing Exchange Capital
Securities, or any broker-dealer who purchased Old Capital Securities from the
Trust for resale pursuant to Rule 144A or any other available exemption under
the Securities Act, (a) will not be able to rely on the interpretations of the
staff of the Division of Corporation Finance of the Commission set forth in the
above-mentioned interpretive letters, (b) will not be permitted or entitled to
tender such Old Capital Securities in the Exchange Offer and (c) must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with any sale or other transfer of such Old Capital Securities
unless such sale is made pursuant to an exemption from such requirements. In
addition, as described below, if any broker-dealer holds Old Capital Securities
acquired for its own account as a result of market-making or other trading
activities and exchanges such Old Capital Securities for Exchange Capital
Securities, then such broker-dealer must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resales of such
Exchange Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for Exchange Capital Securities in the Exchange Offer will be
required to represent that (i) such holder is not an "affiliate" of the Company
or the Trust, (ii) any Exchange Capital Securities to be received by such holder
are being acquired in the ordinary course of its business, (iii) such holder has
no arrangement or understanding with any person to participate in a distribution
(within the meaning of the Securities Act) of such Exchange Capital Securities,
and (iv) if such holder is not a broker-dealer, such holder is not engaged in,
and does not intend to engage in, a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities. In addition, the Company
and the Trust may require such holder, as a condition to such holder's
eligibility to participate in the Exchange Offer, to furnish to the Company and
the Trust (or an agent thereof) in writing information as to the number of
"beneficial owners" (within the meaning of Rule 13d-3 under the Exchange Act) on
behalf of whom such holder holds the Capital Securities to be exchanged in the
Exchange Offer. Each broker-dealer that receives Exchange Capital Securities for
its own account pursuant to the Exchange Offer must acknowledge that it acquired
the Old Capital Securities for its own account as the result of market-making
activities or other trading activities and must agree that it will deliver a
prospectus meeting the
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<PAGE> 37
requirements of the Securities Act in connection with any resale of such
Exchange Capital Securities. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the Division of Corporation
Finance of the Commission in the interpretive letters referred to above, the
Company and the Trust believe that Participating Broker-Dealers who acquired Old
Capital Securities for their own accounts as a result of market-making
activities or other trading activities may fulfill their prospectus delivery
requirements with respect to the Exchange Capital Securities received upon
exchange of such Old Capital Securities (other than Old Capital Securities which
represent an unsold allotment from the original sale of the Old Capital
Securities) with a prospectus meeting the requirements of the Securities Act,
which may be the prospectus prepared for an exchange offer so long as it
contains a description of the plan of distribution with respect to the resale of
such Exchange Capital Securities.
This Prospectus, as it may be amended or supplemented from time to time,
may be used by a Participating Broker-Dealer during the period referred to below
in connection with resales of Exchange Capital Securities received in exchange
for Old Capital Securities where such Old Capital Securities were acquired by
such Participating Broker-Dealer for its own account as a result of
market-making or other trading activities. Subject to certain provisions set
forth in the Registration Rights Agreement, the Company and the Trust have
agreed that this Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer in connection with resales of
such Exchange Capital Securities for a period ending 90 days after the
Expiration Date (subject to extension under certain limited circumstances
described below) or, if earlier, when all such Exchange Capital Securities have
been disposed of by such Participating Broker-Dealer. See "Plan of
Distribution." A Participating Broker-Dealer who intends to use this Prospectus
in connection with the resale of Exchange Capital Securities received in
exchange for Old Capital Securities pursuant to the Exchange Offer must notify
the Company or the Trust, or cause the Company or the Trust to be notified, on
or prior to the Expiration Date, that it is a Participating Broker-Dealer. Such
notice may be given in the space provided for that purpose in the Letter of
Transmittal or may be delivered to the Exchange Agent at one of the addresses
set forth herein under "-- Exchange Agent." Any Participating Broker-Dealer who
is an "affiliate" of the Company or the Trust may not rely on such interpretive
letters and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
Each Participating Broker-Dealer who surrenders Old Capital Securities
pursuant to the Exchange Offer will be deemed to have agreed that, upon receipt
of notice from the Company or the Trust of the occurrence of any event or the
discovery of any fact which makes any statement contained or incorporated by
reference in this Prospectus untrue in any material respect or which causes this
Prospectus to omit to state a material fact necessary in order to make the
statements contained or incorporated by reference herein, in light of the
circumstances under which they were made, not misleading or of the occurrence of
certain other events specified in the Registration Rights Agreement, such
Participating Broker-Dealer will suspend the sale of Exchange Capital Securities
(or the Exchange Guarantee or the Exchange Junior Subordinated Debentures, as
applicable) pursuant to this Prospectus until the Company or the Trust has
amended or supplemented this Prospectus to correct such misstatement or omission
and has furnished copies of the amended or supplemented Prospectus to such
Participating Broker-Dealer or the Company or the Trust has given notice that
the sale of the Exchange Capital Securities (or the Exchange Guarantee or the
Exchange Junior Subordinated Debentures, as applicable) may be resumed, as the
case may be. If the Company or the Trust gives such notice to suspend the sale
of the Exchange Capital Securities (or the Exchange Guarantee or the Exchange
Junior Subordinated Debentures, as applicable), it shall extend the 90-day
period referred to above during which Participating Broker-Dealers are entitled
to use this Prospectus in connection with the resale of Exchange Capital
Securities by the number of days during the period from and including the date
of the giving of such notice to and including the date when Participating
Broker-Dealers shall have received copies of the amended or supplemented
Prospectus necessary to permit resales of the Exchange Capital Securities or to
and including the date on which the Company or the Trust has given notice that
the sale of Exchange Capital Securities (or the Exchange Guarantee or the
Exchange Junior Subordinated Debentures, as applicable) may be resumed, as the
case may be.
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WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Old Capital Securities may
be withdrawn at any time on or prior to the Expiration Date.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at one of its addresses set forth under "-- Exchange Agent"
on or prior to the Expiration Date. Any such notice of withdrawal must specify
the name of the person who tendered the Old Capital Securities to be withdrawn,
the aggregate principal amount of Old Capital Securities to be withdrawn, and
(if certificates for such Old Capital Securities have been tendered) the name of
the registered holder of the Old Capital Securities as set forth on the Old
Capital Securities, if different from that of the person who tendered such Old
Capital Securities. If Old Capital Securities have been delivered or otherwise
identified to the Exchange Agent, then prior to the physical release of such Old
Capital Securities, the tendering holder must submit the serial numbers shown on
the particular Old Capital Securities to be withdrawn and the signature on the
notice of withdrawal must be guaranteed by an Eligible Institution, except in
the case of Old Capital Securities tendered for the account of an Eligible
Institution. If Old Capital Securities have been tendered pursuant to the
procedures for book-entry transfer set forth in "-- Procedures for Tendering Old
Capital Securities," the notice of withdrawal must specify the name and number
of the account at DTC to be credited with the withdrawal of Old Capital
Securities, in which case a notice of withdrawal will be effective if delivered
to the Exchange Agent by written, telegraphic, telex or facsimile transmission.
Withdrawals of tenders of Old Capital Securities may not be rescinded. Old
Capital Securities properly withdrawn will not be deemed validly tendered for
purposes of the Exchange Offer, but may be retendered at any subsequent time on
or prior to the Expiration Date by following any of the procedures described
above under "-- Procedures for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Trust, in its sole
discretion, whose determination shall be final and binding on all parties.
Neither the Company, the Trust, any affiliates or assigns of the Company or the
Trust, the Exchange Agent nor any other person shall be under any duty to give
any notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification. Any Old Capital Securities
which have been tendered but which are withdrawn will be returned to the holder
thereof promptly after withdrawal.
DISTRIBUTIONS ON EXCHANGE CAPITAL SECURITIES
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive Distributions on such Old Capital Securities and
will be deemed to have waived the right to receive any Distributions on such Old
Capital Securities accumulated from and including January 31, 1997. Accordingly,
holders of Exchange Capital Securities as of the record date for the payment of
Distributions on August 1, 1997 will be entitled to receive Distributions
accumulated from and including January 31, 1997.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Company and the Trust will not be required
to accept for exchange, or to exchange, any Old Capital Securities for any
Exchange Capital Securities, and, as described below, may terminate the Exchange
Offer (whether or not any Old Capital Securities have theretofore been accepted
for exchange) or may waive any conditions to or amend the Exchange Offer, if any
of the following conditions have occurred or exists or have not been satisfied:
(a) there shall occur a change in the current interpretation by the
staff of the Commission which permits the Exchange Capital Securities
issued pursuant to the Exchange Offer in exchange for Old Capital
Securities to be offered for resale, resold and otherwise transferred by
holders thereof (other than broker-dealers and any such holder which is an
"affiliate" of the Company or the Trust within the meaning of Rule 405
under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act provided that such
Exchange Capital Securities are acquired in
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the ordinary course of such holders' business and such holders have no
arrangement or understanding with any person to participate in the
distribution of such Exchange Capital Securities; or
(b) any law, statute, rule or regulation shall have been adopted or
enacted which, in the judgment of the Company or the Trust, would
reasonably be expected to impair its ability to proceed with the Exchange
Offer; or
(c) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge of
the Company or the Trust, threatened for that purpose or any governmental
approval has not been obtained, which approval the Company or the Trust
shall, in its sole discretion, deem necessary for the consummation of the
Exchange Offer as contemplated hereby.
(d) the Company shall have received an opinion of counsel, rendered by
a law firm experienced in such matters, to the effect that, as a result of
the consummation of the Exchange Offer there is more than an insubstantial
risk that (x) the Trust would be subject to United States federal income
tax with respect to income received or accrued on the Junior Subordinated
Debentures, (y) interest payable by the Company on the Junior Subordinated
Debentures would not be deductible by the Company, in whole or in part, for
United States federal income purposes, or (z) the Trust would be subject to
more than a de minimis amount of other taxes, duties or other governmental
charges, in which case the Company and the Trust may, in lieu of
consummating of the Exchange Offer, file a Shelf Registration Statement in
accordance with the Registration Rights Agreement.
If the Company or the Trust determines in its sole and absolute discretion
that any of the foregoing events or conditions has occurred or exists or has not
been satisfied, it may, subject to applicable law, terminate the Exchange Offer
(whether or not any Old Capital Securities have theretofore been accepted for
exchange) or may waive any such condition or otherwise amend the terms of the
Exchange Offer in any respect. If such waiver or amendment constitutes a
material change to the Exchange Offer, the Company or the Trust will promptly
disclose such waiver or amendment by means of a Prospectus supplement that will
be distributed to the registered holders of the Old Capital Securities and will
extend the Exchange Offer to the extent required by Rule 14e-1 under the
Exchange Act.
EXCHANGE AGENT
The Chase Manhattan Bank has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other required
documents, questions, requests for assistance, and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed to
the Exchange Agent as follows:
BY REGISTERED OR CERTIFIED MAIL, HAND OR OVERNIGHT DELIVERY:
THE CHASE MANHATTAN BANK
55 Water Street, Room 234
North Building
New York, New York 10041
Attention: Sharon Lewis
Confirm by Telephone:
(212) 638-0454
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 638-7380
Delivery of this instrument to an address other than as set forth above or
transmission of instructions via facsimile other than as set forth above, will
not constitute a valid delivery.
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FEES AND EXPENSES
The Company has agreed to pay the Exchange Agent reasonable and customary
fees for its services and will reimburse it for its reasonable out-of-pocket
expenses in connection therewith. The Company will also pay brokerage houses and
other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this Prospectus and related documents
to the beneficial owners of Old Capital Securities, and in handling or tendering
for their customers.
Holders who tender their Old Capital Securities for exchange will not be
obligated to pay any transfer taxes in connection therewith. If, however,
Exchange Capital Securities are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the Old Capital
Securities tendered, or if a transfer tax is imposed for any reason other than
the exchange of Old Capital Securities in connection with the Exchange Offer,
then the amount of any such transfer taxes (whether imposed on the registered
holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
Neither the Company nor the Trust will make any payment to brokers, dealers
or other nominees soliciting acceptances of the Exchange Offer.
DESCRIPTION OF EXCHANGE SECURITIES
DESCRIPTION OF EXCHANGE CAPITAL SECURITIES
Pursuant to the terms of the Trust Agreement, the Trust has issued the Old
Capital Securities and the Common Securities and will issue the Exchange Capital
Securities. The Exchange Capital Securities will represent preferred beneficial
interests in the Trust and the holders of the Exchange Capital Securities and
the Old Capital Securities will be entitled to a preference over the Common
Securities in certain circumstances with respect to Distributions and amounts
payable on redemption of the Trust Securities or liquidation of the Trust. See
"--Subordination of Common Securities." The Trust Agreement has been qualified
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
This summary of all of the material provisions of the Exchange Capital
Securities and the Trust Agreement does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all the provisions
of the Trust Agreement, including the definitions therein of certain terms. A
copy of the Trust Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
GENERAL
The Capital Securities (including the Old Capital Securities and the
Exchange Capital Securities) are limited to $110,000,000 aggregate Liquidation
Amount at any one time outstanding. The Capital Securities will rank pari passu,
and payments will be made thereon pro rata, with the Common Securities except as
described under "-- Subordination of Common Securities." Legal title to the
Junior Subordinated Debentures will be held by the Property Trustee in trust on
behalf of the Trust for the benefit of the holders of the Capital Securities and
Common Securities. The Exchange Guarantee will not guarantee payment of
Distributions or amounts payable on redemption of the Exchange Capital
Securities or liquidation of the Trust when the Trust does not have funds on
hand legally available for such payments. See "-- Description of Exchange
Guarantee."
DISTRIBUTIONS
Distributions on the Exchange Capital Securities will be cumulative, will
accrue from January 31, 1997 (the date of original issuance of the Old Capital
Securities) or from the latest date to which interest thereon has been duly paid
or provided for at the annual rate of 8.82% of the principal amount thereof,
payable semi-annually in arrears on February 1 and August 1 of each year,
commencing on August 1, 1997, to the holders of the Exchange Capital Securities
on the relevant record dates. The record dates will be the fifteenth day
preceding the relevant Distribution Date (as defined below). The amount of
Distributions payable for any
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period will be computed on the basis of a 360-day year of twelve 30-day months
and for any period less than 6 months, the actual months elapsed and the actual
days elapsed in a partial month in a period. In the event that any date on which
Distributions are payable on the Exchange Capital Securities is not a Business
Day (as defined below), 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 to any such delay), in each case with the
same force and effect as if made on such date (each date on which Distributions
are payable in accordance with the foregoing, a "Distribution Date"). A
"Business Day" shall mean any day other than a Saturday or a Sunday, or a day on
which banking institutions in The City of New York, New York are authorized or
required by law or executive order to remain closed.
So long as no Debenture Event of Default shall have occurred and be
continuing, the Company will have the right under the Indenture to defer the
payment of interest on the Exchange Junior Subordinated Debentures at any time
or from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period, provided that no Extension Period
may extend beyond the Stated Maturity. Upon any such election, semi-annual
Distributions on the Exchange Capital Securities will be deferred by the Trust
during any such Extension Period. Distributions to which holders of the Exchange
Capital Securities are entitled during any such Extension Period will accumulate
additional Distributions thereon at the rate per annum of 8.82% thereof,
compounded semi-annually from the relevant Distribution Date, on the basis of a
360-day year of twelve 30-day months and for any period less than 6 months, the
actual months elapsed and the actual days elapsed in a partial month in a
period, but not exceeding the interest rate then accruing on the Exchange Junior
Subordinated Debentures. The term "Distributions," as used herein, shall include
any such additional Distributions.
Prior to the termination of any such Extension Period, and so long as no
Debenture Event of Default has occurred and is continuing, the Company may
further extend the Extension Period provided that no Extension Period may exceed
10 consecutive semi-annual periods or extend beyond the Stated Maturity. Upon
the termination of any such Extension Period and the payment of all amounts then
due, and subject to the foregoing limitations, the Company may elect to begin a
new Extension Period. The Company must give the Property Trustee, the
Administrative Trustees and the Debenture Trustee notice of its election of any
such Extension Period at least five Business Days prior to the earlier of (i)
the date the Distributions on the Capital Securities would have been payable
except for the election to begin or extend such Extension Period or (ii) the
date the Administrative Trustees are required to give notice to any securities
exchange or to holders of such Exchange Capital Securities of the record date or
the date such Distributions are payable but in any event not less than five (5)
Business Days prior to such record date. There is no limitation on the number of
times that the Company may elect to begin an Extension Period. See
"-- Description of Exchange Junior Subordinated Debentures -- Option to Extend
Interest Payment Date" and "Certain Federal Income Tax Consequences -- Interest
Income and Original Issue Discount."
During any such Extension Period, the Company may not, and may not permit
any subsidiary to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Company's capital stock (which includes common and preferred stock), (ii)
make any payment of principal, interest or premium, if any, or repay, repurchase
or redeem any debt securities of the Company (including Other Debentures) that
rank pari passu with, or junior in right of payment to, the Exchange Junior
Subordinated Debentures or (iii) make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
(including Other Guarantees) if such guarantee ranks pari passu with, or junior
in right of payment to, the Exchange Junior Subordinated Debentures (other than
(a) dividends or distributions in shares of, or options, warrants or rights to
subscribe for or purchase shares of, common stock of the Company, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) as a direct result of, and only to the extent
necessary to avoid the issuance of fractional shares of the Company's capital
stock following, a reclassification of the Company's capital stock or the
exchange or conversion of one class, or series of the Company's capital stock
for another class or series of the Company's capital stock, (e) the purchase of
fractional interests in shares of the Company's capital stock
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pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, and (f) purchases of common stock related
to the issuance of common stock or rights under any of the Company's benefit
plans for its directors, officers or employees or any of the Company's dividend
reinvestment plans). None of the Company's subsidiaries will be prohibited from
declaring and paying cash distributions with respect to its capital stock or
from making payments with respect to its debt securities.
Although the Company may in the future exercise its right to defer payments
of interest on the Exchange Junior Subordinated Debentures, the Company has no
such current intention.
The revenue of the Trust available for distribution to holders of the
Exchange Capital Securities will be limited to payments under the Exchange
Junior Subordinated Debentures held by the Trust. See "-- Description of
Exchange Junior Subordinated Debentures -- General." If the Company does not
make interest payments on the Exchange Junior Subordinated Debentures, the
Property Trustee will not have funds available to pay Distributions on the
Exchange Capital Securities. The payment of Distributions (if and to the extent
the Trust has funds on hand legally available for the payment of such
Distributions) will be guaranteed by the Company on a limited basis as set forth
herein under "-- Description of Exchange Guarantee."
CONDITIONAL RIGHT TO SHORTEN MATURITY AND SPECIAL EVENT REDEMPTION
If a Tax Event occurs, then the Company will have the right, prior to the
termination of the Trust, either (i) to shorten the Stated Maturity of the
Exchange Junior Subordinated Debentures to the minimum extent required, but not
less than 20 years from the date of original issuance thereof, such that, in the
written opinion of counsel experienced in such matters delivered to the Company,
after shortening the maturity, interest paid on the Exchange Junior Subordinated
Debentures will be deductible for federal income tax purposes (the action
referred to above being referred to herein as a "Tax Event Maturity Shortening")
or (ii) to prepay the Exchange Junior Subordinated Debentures, as described
below.
If a Tax Event or an Investment Company Event occurs, then the Company
shall have the right, within 90 days following the occurrence of such Tax Event
or Investment Company Event, as the case may be, to prepay the Exchange Junior
Subordinated Debentures in whole (but not in part) in the manner and at the
price determined as set forth under "-- Description of Exchange Junior
Subordinated Debentures -- Conditional Right to Shorten Maturity and Special
Event Prepayment," and therefore to cause a mandatory redemption of the Exchange
Capital Securities prior to the Stated Maturity (the circumstances under which
the Company has the right to so prepay the Exchange Junior Subordinated
Debentures in connection with a Tax Event being referred to herein as a
"Conditional Tax Redemption Event"). Each of a Conditional Tax Redemption Event
or an Investment Company Event are sometimes referred to herein as a "Special
Event."
REDEMPTION
Upon the repayment on the Stated Maturity or prepayment prior to the Stated
Maturity of the Exchange Junior Subordinated Debentures, the proceeds from such
repayment or prepayment shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the Trust Securities, upon not less than 30
nor more than 60 days' notice of a date of redemption (the "Redemption Date"),
at the applicable Redemption Price, which shall be equal to (i) in the case of
the repayment of the Exchange Junior Subordinated Debentures on the Stated
Maturity, the Maturity Redemption Price (equal to the principal of, and accrued
and unpaid interest on, the Exchange Junior Subordinated Debentures), (ii) in
the case of the optional prepayment of the Exchange Junior Subordinated
Debentures upon the occurrence and continuation of a Special Event, the Special
Event Redemption Price (equal to the Special Event Prepayment Price in respect
of the Exchange Junior Subordinated Debentures) and (iii) in the case of the
optional prepayment of the Exchange Junior Subordinated Debentures other than as
contemplated in clause (ii) above, the Optional Redemption Price (equal to the
Optional Prepayment Price in respect of the Exchange Junior Subordinated
Debentures). See "-- Description of Exchange Junior Subordinated
Debentures -- Optional Prepayment" and "-- Conditional Right to Shorten Maturity
and Special Event Prepayment."
"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Exchange Junior Subordinated Debentures to be paid in
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accordance with their terms and (ii) with respect to a distribution of Exchange
Junior Subordinated Debentures upon the liquidation of the Trust, Exchange
Junior Subordinated Debentures having a principal amount equal to the
Liquidation Amount of the Trust Securities of the holder to whom such Exchange
Junior Subordinated Debentures are distributed.
The Company will have the option to prepay the Exchange Junior Subordinated
Debentures, (i) in whole or in part, on or after February 1, 2007, at the
applicable Optional Prepayment Price and (ii) in whole but not in part, at any
time, upon the occurrence of a Special Event, at the Special Event Prepayment
Price.
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF EXCHANGE JUNIOR SUBORDINATED
DEBENTURES
The Company, as the holder of all of the outstanding Common Securities,
will have the right at any time to dissolve the Trust and cause a Like Amount of
the Exchange Junior Subordinated Debentures to be distributed to the holders of
the Trust Securities in liquidation of the Trust, subject to the Company's
having received an opinion by independent tax counsel experienced in such
matters to the effect that the holders will not recognize any gain or loss for
United States federal income tax purposes as a result of the dissolution of the
Trust and such distribution to holders of Exchange Capital Securities.
The Trust shall automatically dissolve upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Company; (ii)
the distribution of a Like Amount of the Exchange Junior Subordinated Debentures
to the holders of the Trust Securities, if the Company, as Sponsor, has given a
written direction to the Property Trustee to terminate the Trust (which
direction is optional and, except as described above, wholly within the
discretion of the Company, as the holder of all of the outstanding Common
Securities); (iii) redemption of all of the Trust Securities as described under
"-- Redemption"; (iv) expiration of the term of the Trust; and (v) the entry of
an order for the dissolution of the Trust by a court of competent jurisdiction.
If a dissolution occurs as described in clause (i), (ii), (iv) or (v)
above, the Trust shall be liquidated by the Administrative Trustees as
expeditiously as the Administrative Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to the holders of the Trust Securities a Like Amount
of the Exchange Junior Subordinated Debentures, unless such distribution is
determined by the Property Trustee not to be practicable, in which event such
holders will be entitled to receive out of the assets of the Trust legally
available for distribution to holders, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, an amount equal to the
aggregate of the Liquidation Amount plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because the Trust has insufficient assets on hand legally available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Capital Securities and the Common Securities shall be paid
on a pro rata basis, except that if a Debenture Event of Default has occurred
and is continuing, the Capital Securities shall have a priority over the Common
Securities. See "-- Subordination of Common Securities." If an early dissolution
occurs as described in clause (v) above, the Exchange Junior Subordinated
Debentures will be subject to optional prepayment, in whole but not in part, on
or after February 1, 2007.
If the Company elects not to prepay the Junior Subordinated Debentures
prior to maturity in accordance with their terms and either elects not to or is
unable to liquidate the Trust and distribute the Junior Subordinated Debentures
to holders of the Trust Securities, the Trust Securities will remain outstanding
until the repayment of the Junior Subordinated Debentures on the Stated
Maturity.
After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures to holders of the Trust Securities, (i) the Trust
Securities will no longer be deemed to be outstanding, (ii) each registered
global certificate, if any, representing Trust Securities and held by DTC or its
nominee will receive a registered global certificate or certificates
representing the Junior Subordinated Debentures to be delivered upon such
distribution and (iii) any certificates representing Trust Securities not held
by DTC or its nominee will be deemed to represent Exchange Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of such
Trust Securities, and bearing accrued and unpaid interest in an amount equal to
the accumulated and unpaid Distributions on such Trust Securities until such
certificates are presented to the
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Administrative Trustees or their agent for cancellation, whereupon the Company
will issue to such holder, and the Debenture Trustee will authenticate, a
certificate representing such Junior Subordinated Debentures. See "-- Form,
Denomination, Book-Entry Procedures and Transfer."
There can be no assurance as to the market prices for the Exchange Capital
Securities or the Exchange Junior Subordinated Debentures that may be
distributed in exchange for the Trust Securities if a dissolution and
liquidation of the Trust were to occur. Accordingly, the Capital Securities that
an investor may purchase, or the Junior Subordinated Debentures that the
investor may receive on dissolution and liquidation of the Trust, may trade at a
discount to the price that the investor paid to purchase the Capital Securities
offered hereby.
REDEMPTION PROCEDURES
If applicable, Trust Securities shall be redeemed at the applicable
Redemption Price with the proceeds from the contemporaneous repayment or
prepayment of the Exchange Junior Subordinated Debentures. Any redemption of
Trust Securities shall be made and the applicable Redemption Price shall be
payable on the Redemption Date only to the extent that the Trust has funds
legally available for the payment of such applicable Redemption Price. See also
"-- Subordination of Common Securities."
If the Trust gives a notice of redemption in respect of the Exchange
Capital Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, to the extent funds are legally available, with respect to the Exchange
Capital Securities held by DTC or its nominees, the Property Trustee will
deposit irrevocably with DTC funds sufficient to pay the applicable Redemption
Price with respect to the Exchange Capital Securities held by DTC or its
nominee. See "-- Form, Denomination, Book-Entry Procedures and Transfer." With
respect to the Exchange Capital Securities held in certificated form, the
Property Trustee, to the extent funds are legally available, will irrevocably
deposit with the paying agent for the Exchange Capital Securities funds
sufficient to pay the applicable Redemption Price and will give such paying
agent irrevocable instructions and authority to pay the applicable Redemption
Price to the holders thereof upon surrender of their certificates evidencing the
Exchange Capital Securities. See "-- Payment and Paying Agency." Notwithstanding
the foregoing, Distributions payable on or prior to the Redemption Date shall be
payable to the holders of such Exchange Capital Securities on the relevant
record dates for the related Distribution Dates. If notice of redemption shall
have been given and funds deposited as required, then upon the date of such
deposit, all rights of the holders of the Exchange Capital Securities will
cease, except the right of the holders of the Exchange Capital Securities to
receive the applicable Redemption Price, but without interest on such Redemption
Price, and the Exchange Capital Securities will cease to be outstanding. In the
event that any Redemption Date of Exchange Capital Securities is not a Business
Day, then the applicable Redemption Price payable on such date will be paid 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 the event that payment of the applicable Redemption
Price is improperly withheld or refused and not paid either by the Trust or by
the Company pursuant to the Exchange Guarantee as described under
"-- Description of Exchange Guarantee," (i) Distributions on the Exchange
Capital Securities will continue to accumulate at the then applicable rate, from
the Redemption Date originally established by the Trust to the date such
applicable Redemption Price is actually paid, and (ii) the actual payment date
will be the Redemption Date for purposes of calculating the applicable
Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), the Company or its subsidiaries may at any time and
from time to time purchase outstanding Exchange Capital Securities by tender, in
the open market or by private agreement.
If less than all of the Capital Securities and Common Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of such
Trust Securities to be redeemed shall generally be allocated pro rata among the
Capital Securities and Common Securities based upon the relative Liquidation
Amounts of such classes.
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Notice of any redemption will be mailed at least 30 days but not more than
60 days prior to the Redemption Date to each holder of Trust Securities at its
registered address. Unless the Company defaults in payment of the applicable
Prepayment Price on, or in the repayment of, the Junior Subordinated Debentures,
on and after the Redemption Date Distributions will cease to accrue on the Trust
Securities called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Capital
Securities and Common Securities, as applicable, shall be made pro rata based on
the Liquidation Amount of the Capital Securities and Common Securities;
provided, however, that if on any Distribution Date or Redemption Date a
Debenture Event of Default shall have occurred and be continuing, no payment of
any Distribution on, or applicable Redemption Price of, any of the Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of the Common Securities, shall be made unless payment in full
in cash of all accumulated and unpaid Distributions on all of the outstanding
Capital Securities for all Distribution periods terminating on or prior thereto,
or in the case of payment of the applicable Redemption Price the full amount of
such Redemption Price, shall have been made or provided for, and all funds
available to the Property Trustee shall first be applied to the payment in full
in cash of all Distributions on, or Redemption Price of, the Capital Securities
then due and payable.
In the case of any Event of Default (as defined below), the Company as
holder of the Common Securities will be deemed to have waived any right to act
with respect to such Event of Default until the effect of such Event of Default
shall have been cured, waived or otherwise eliminated. Until any such Event of
Default has been so cured, waived or otherwise eliminated, the Property Trustee
shall act solely on behalf of the holders of the Capital Securities and not on
behalf of the Company as holder of the Common Securities, and only the holders
of the Capital Securities will have the right to direct the Property Trustee to
act on their behalf.
EVENTS OF DEFAULT; NOTICE
The occurrence of a Debenture Event of Default (see "-- Description of
Exchange Junior Subordinated Debentures -- Debenture Events of Default")
constitutes an "Event of Default" under the Trust Agreement.
Within ninety days after the occurrence of any Event of Default actually
known to the Property Trustee, the Property Trustee shall transmit notice of
such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Company as Sponsor, unless such Event of Default
shall have been cured or waived. The Company as Sponsor, and the Administrative
Trustees are required to file annually with the Property Trustee a certificate
as to whether or not they are in compliance with all the conditions and
covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities as described under
"-- Liquidation of the Trust and Distribution of Exchange Junior Subordinated
Debentures" and "-- Subordination of Common Securities."
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Company as the holder of the Common
Securities. No resignation or removal of an Issuer Trustee and no appointment of
a successor trustee shall be effective until the acceptance of appointment by
the successor trustee in accordance with the provisions of the Trust Agreement.
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MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any company into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any company resulting from any merger,
conversion or consolidation to which such Issuer Trustee shall be a party, or
any company succeeding to all or substantially all the corporate trust business
of such Issuer Trustee, shall be the successor of such Issuer Trustee under the
Trust Agreement, provided such company shall be otherwise qualified and
eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or sell, convey, transfer or lease its properties and assets as an
entirety, or substantially as an entirety, to any company or other Person,
except as described below. The Trust may, at the request of the Company, as the
holder of all of the outstanding Common Securities, with the consent of the
Administrative Trustees but without the consent of the Property Trustee, the
Delaware Trustee or the holders of the Capital Securities, merge with or into,
consolidate, amalgamate, or be replaced by or sell, convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to a
trust organized as such under the laws of any State; provided, that (i) such
successor entity either (a) expressly assumes all of the obligations of the
Trust with respect to the Trust Securities or (b) substitutes for the Trust
Securities other securities having substantially the same terms as the Trust
Securities (the "Successor Securities") so long as the Successor Securities rank
the same as the Trust Securities rank with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) the Company expressly appoints
a trustee of such successor entity possessing the same powers and duties as the
Property Trustee with respect to the Junior Subordinated Debentures, (iii) the
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 Capital Securities are then listed or quoted, if any,
(iv) such merger, consolidation, amalgamation, replacement, sale, conveyance,
transfer or lease does not cause the Capital Securities (including any Successor
Securities) to be downgraded by any two nationally recognized statistical rating
organizations, (v) such merger, consolidation, amalgamation, replacement, sale,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Trust Securities (including any Successor
Securities) in any material respect (other than any dilution of such holders'
interests in the new entity), (vi) such successor entity has a purpose identical
to that of the Trust, (vii) prior to such merger, consolidation, amalgamation,
replacement, sale, conveyance, transfer or lease, the Company has received an
opinion from independent counsel to the Trust experienced in such matters to the
effect that (a) such merger, consolidation, amalgamation, replacement, sale,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Trust Securities (including any Successor
Securities) in any material respect (other than any dilution of such holders'
interests in the new entity), and (b) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor
such successor entity will be required to register as an investment company
under the Investment Company Act, (viii) the Company or any permitted successor
or assignee owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee and (ix) the Trust
shall not, except with the consent of holders of 100% in Liquidation Amount of
the Trust Securities, consolidate, amalgamate, merge with or into, or be
replaced by or sell, convey, transfer or lease its properties and assets as an
entirety, or substantially as an entirety, to any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger, replacement, sale, conveyance,
transfer or lease would cause the Trust or the successor entity not to be
classified as a grantor trust for United States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT
Except as provided below and under "-- Removal of Issuer Trustees,"
"-- Mergers, Consolidations, Amalgamation or Replacements of the Trust" and
"Description of Exchange Guarantee -- Amendments and
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Assignment" and as otherwise required by law and the terms of the Trust
Securities and the Trust Agreement, the holders of the Exchange Capital
Securities will have no voting rights.
The Trust Agreement may be amended from time to time by the Company, as the
holder of all of the outstanding Common Securities, the Property Trustee and the
Administrative Trustees without the consent of the holders of the Trust
Securities (i) to cure any ambiguity, correct or supplement any provisions in
the Trust Agreement that may be inconsistent with any other provision, or to
make any other provisions with respect to matters or questions arising under the
Trust Agreement, which shall not be inconsistent with the other provisions of
the Trust Agreement, (ii) to modify, eliminate or add to any provisions of the
Trust Agreement to such extent as shall be necessary to ensure that the Trust
will be classified for United States federal income tax purposes as a grantor
trust at all times that any Trust Securities are outstanding or to ensure that
the Trust will not be required to register as an "investment company" under the
Investment Company Act, or (iii) to qualify or maintain qualification of the
Trust Agreement under the Trust Indenture Act; provided, however, that in each
case, such action shall not adversely affect in any material respect the
interests of the holders of the Trust Securities. Any amendments of the Trust
Agreement pursuant to the foregoing shall become effective when notice thereof
is sent to the holders of the Trust Securities. The Trust Agreement may be
amended by the Issuer Trustees and the Company, as the holder of all of the
outstanding Common Securities, with the consent of holders representing a
majority (based upon Liquidation Amount) of the outstanding Trust Securities and
upon receipt by the Issuer Trustees of an opinion of counsel to the effect that
such amendment or the exercise of any power granted to the Issuer Trustees in
accordance with such amendment will not affect the Trust's status as a grantor
trust for United States federal income tax purposes or the Trust's exemption
from status as an "investment company" under the Investment Company Act,
provided that, without the consent of each holder of Trust Securities, the Trust
Agreement may not be amended (i) to change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) to restrict the right of a holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date.
So long as any Junior Subordinated Debentures are held by the Property
Trustee for the benefit of the holders of the Trust Securities, the Issuer
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or execute any
trust or power conferred on such Debenture Trustee with respect to the Junior
Subordinated Debentures, (ii) waive certain past defaults under the Indenture,
(iii) exercise any right to rescind or annul a declaration of acceleration of
the maturity of the principal of the Junior Subordinated Debentures or (iv)
consent to any amendment, modification or termination of the Indenture or the
Junior Subordinated Debentures, where such consent shall be required, without,
in each case, obtaining the prior approval of the holders of a majority in
Liquidation Amount of all outstanding Capital Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Junior Subordinated Debentures affected thereby, no such consent shall
be given by the Property Trustee without the prior approval of each holder of
the Capital Securities. The Issuer Trustees shall not revoke any action
previously authorized or approved by a vote of the holders of the Capital
Securities except by subsequent vote of such holders. The Property Trustee shall
notify each holder of Capital Securities of any notice of default with respect
to the Junior Subordinated Debentures. In addition to obtaining the foregoing
approvals of such holders of the Capital Securities, prior to taking any of the
foregoing actions, the Issuer Trustees shall obtain an opinion of counsel
experienced in such matters to the effect there is no more than an insubstantial
risk that the Trust would not be classified for United States federal income tax
purposes as a grantor trust on account of such action.
Any required approval of holders of Exchange Capital Securities may be
given at a meeting of such holders convened for such purpose or pursuant to
written consent. The Administrative Trustees will cause a notice of any meeting
at which holders of Exchange Capital Securities are entitled to vote, or of any
matter upon which action by written consent of such holders is to be taken, to
be given to each holder of record of Exchange Capital Securities in the manner
set forth in the Trust Agreement.
No vote or consent of the holders of Exchange Capital Securities will be
required for the Trust to redeem and cancel the Exchange Capital Securities in
accordance with the Trust Agreement.
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Notwithstanding that holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Company, the Issuer Trustees or any affiliate
of the Company or any Issuer Trustees, shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Company as the holder of all the
outstanding Common Securities.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER
The Exchange Capital Securities initially will be represented by one or
more Exchange Capital Securities certificates in registered, global form
(collectively, the "Global Capital Securities"). The Global Capital Securities
will be deposited upon issuance with the Property Trustee as custodian for DTC,
in New York, New York, and registered in the name of DTC or its nominee, in each
case for credit to an account of a direct or indirect participant in DTC as
described below.
Except as set forth below, the Global Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee. Beneficial interests in the Global Capital
Securities may not be exchanged for Capital Securities in certificated form
except in the limited circumstances described below. See "-- Exchange of
Book-Entry Capital Securities for Certificated Capital Securities."
Other Exchange Capital Securities will be issued only in registered,
certificated (i.e., non-global) form. Other Exchange Capital Securities may not
be exchanged for beneficial interests in any Exchange Global Capital Securities
except in the limited circumstances described below. See "-- Exchange of
Certificated Capital Securities for Book-Entry Capital Securities."
Transfer of beneficial interests in the Global Capital Securities will be
subject to the applicable rules and procedures of DTC and its direct or indirect
participants (including, if applicable, those of Euroclear and CEDEL), which may
change from time to time.
Depositary Procedures
DTC has advised the Trust and the Company that DTC is a limited-purpose
trust company created to hold securities for its participating organizations
(collectively, the "Participants") and to facilitate the clearance and
settlement of transactions in those securities between Participants through
electronic book-entry changes in accounts of its Participants. The Participants
include securities brokers and dealers (including the Initial Purchaser), banks,
trust companies, clearing companies and certain other organizations. Access to
DTC's system is also available to other entities such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a Participant, either directly or indirectly (collectively, the "Indirect
Participants"). Persons who are not Participants may beneficially own securities
held by or on behalf of DTC only through the Participants or the Indirect
Participants. The ownership interest and transfer of ownership interest of each
actual purchaser of each security held by or on behalf of DTC are recorded on
the records of the Participants and Indirect Participants.
DTC has also advised the Trust and the Company that, pursuant to procedures
established by it, (i) upon deposit of the Global Capital Securities, DTC will
credit the accounts of Participants with portions of the Liquidation Amount of
the Global Capital Securities equal to the respective Liquidation Amounts of Old
Capital Securities accepted for exchange in the Exchange Offer and (ii)
ownership of such interests in the Global Capital Securities will be shown on,
and the transfer of ownership thereof will be effected only through, records
maintained by DTC (with respect to the Participants) or by the Participants and
the Indirect Participants (with respect to other owners of beneficial interests
in the Global Capital Securities).
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Investors in the Global Capital Securities may hold their interests therein
directly through DTC if they are Participants, or indirectly through
organizations (including Euroclear and CEDEL) which are Participants. All
interests in a Global Capital Security, including those held through Euroclear
or CEDEL, may be subject to the procedures and requirements of DTC. Those
interests held through Euroclear or CEDEL may also be subject to the procedures
and requirements of such system. The laws of some states require that certain
persons take physical delivery in certificated form of securities that they own.
Consequently, the ability to transfer beneficial interests in a Global Capital
Security to such persons will be limited to that extent. Because DTC can act
only on behalf of Participants, which in turn act on behalf of Indirect
Participants and certain banks, the ability of a person having beneficial
interests in a Global Capital Security to pledge such interests to persons or
entities that do not participate in the DTC system, or otherwise take actions in
respect of such interests, may be affected by the lack of a physical certificate
evidencing such interests. For certain other restrictions on the transferability
of the Capital Securities, see "-- Exchange of Book-Entry Capital Securities for
Certificated Capital Securities", and "-- Exchange of Certificated Capital
Securities for Book-Entry Capital Securities" below.
Except as described below, owners of interests in the Global Capital
Securities will not have Capital Securities registered in their name, will not
receive physical delivery of Capital Securities in certificated form and will
not be considered the registered owners or holders thereof under the Trust
Agreement for any purpose.
Payments in respect of the Global Capital Securities registered in the name
of DTC or its nominee will be payable by the Property Trustee to DTC or its
nominee in its capacity as the registered holder under the Trust Agreement.
Under the terms of the Trust Agreement, the Property Trustee will treat the
persons in whose names the Capital Securities, including the Global Capital
Securities, are registered as the owners thereof for the purpose of receiving
such payments and for any and all other purposes whatsoever. Consequently,
neither the Property Trustee nor any agent thereof has or will have any
responsibility or liability for (i) any aspect of DTC's records or any
Participant's or Indirect Participant's records relating to or payments made on
account of beneficial ownership interests in the Global Capital Securities, or
for maintaining, supervising or reviewing any of DTC's records or any
Participant's or Indirect Participant's records relating to the beneficial
ownership interests in the Global Capital Securities or (ii) any other matter
relating to the actions and practices of DTC or any of its Participants or
Indirect Participants. DTC has advised the Trust and the Company that its
current practice, upon receipt of any payment in respect of securities such as
the Capital Securities, is to credit the accounts of the relevant Participants
with the payment on the payment date, in amounts proportionate to their
respective holdings in Liquidation Amount of beneficial interests in the
relevant security as shown on the records of DTC unless DTC has reason to
believe it will not receive payment on such payment date. Payments by the
Participants and the Indirect Participants to the beneficial owners of Capital
Securities will be governed by standing instructions and customary practices and
will be the responsibility of the Participants or the Indirect Participants and
will not be the responsibility of DTC, the Property Trustee, the Trust or the
Company. Neither the Trust or the Company nor the Property Trustee will be
liable for any delay by DTC or any of its Participants in identifying the
beneficial owners of the Capital Securities, and the Trust or the Company and
the Property Trustee may conclusively rely on and will be protected in relying
on instructions from DTC or its nominee for all purposes.
Except for trades involving only Euroclear and CEDEL participants,
interests in the Global Capital Securities will trade in DTC's Same-Day Funds
Settlement System and secondary market trading activity in such interests will
therefore settle in immediately available funds, subject in all cases to the
rules and procedures of DTC and its Participants.
Transfers between Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds. Transfers between
participants in Euroclear and CEDEL will be effected in the ordinary way in
accordance with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the
Capital Securities described herein, crossmarket transfers between the
Participants in DTC, on the one hand, and Euroclear or CEDEL participants, on
the other hand, will be effected through DTC in accordance with DTC's rules on
behalf of
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Euroclear or CEDEL, as the case may be, by its respective depositary; however,
such cross-market transactions will require delivery of instructions to
Euroclear or CEDEL, as the case may be, by the counterparty in such system in
accordance with the rules and procedures and within the established deadlines
(Brussels time) of such system. Euroclear or CEDEL, as the case may be, will, if
the transaction meets its settlement requirements, deliver instructions to its
respective depositary to take action to effect final settlement on its behalf by
delivering or receiving interests in the relevant Global Capital Securities in
DTC, and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Euroclear participants and CEDEL
participants may not deliver instructions directly to the depositaries for
Euroclear or CEDEL.
Because of time zone differences, the securities account of a Euroclear or
CEDEL participant purchasing an interest in a Global Capital Security from a
Participant in DTC will be credited, and any such crediting will be reported to
the relevant Euroclear or CEDEL participant, during the securities settlement
processing day (which must be a business day for Euroclear and CEDEL)
immediately following the settlement date of DTC. Cash received in Euroclear or
CEDEL as a result of sales of interest in a Global Capital Security by or
through a Euroclear or CEDEL participant to a Participant in DTC will be
received with value on the settlement date of DTC but will be available in the
relevant Euroclear or CEDEL cash account only as of the business day for
Euroclear or CEDEL following DTC's settlement date.
DTC has advised the Trust and the Company that it will take any action
permitted to be taken by a holder of Exchange Capital Securities only at the
direction of one or more Participants to whose account with DTC interests in the
Global Capital Securities are credited and only in respect of such portion of
the Liquidation Amount of the Capital Securities as to which such Participant or
Participants has or have given such direction. However, if there is an Event of
Default under the Trust Agreement, DTC reserves the right to exchange the Global
Capital Securities for Exchange Capital Securities in certificated form and to
distribute such Exchange Capital Securities to its Participants.
The information in this section concerning DTC, Euroclear and CEDEL and
their book-entry systems, has been obtained from sources that the Trust and the
Company believe to be reliable, but neither the Trust nor the Company takes
responsibility for the accuracy thereof.
Neither the Trust or the Company nor the Property Trustee will have any
responsibility for the performance by DTC, Euroclear or CEDEL or their
respective participants or indirect participants of their respective obligations
under the rules and procedures governing their operations.
Exchange of Book-Entry Capital Securities for Certificated Capital
Securities
A Global Capital Security is exchangeable for Exchange Capital Securities
in registered certificated form if (i) DTC (x) notifies the Trust that it is
unwilling or unable to continue as depositary for the Global Capital Security
and the Trust thereupon fails to appoint a successor depositary within 90 days
or (y) has ceased to be a clearing agency registered under the Exchange Act,
(ii) the Company in its sole discretion elects to cause the issuance of the
Exchange Capital Securities in certificated form or (iii) there shall have
occurred and be continuing an Event of Default or any event which after notice
or lapse of time or both would be an Event of Default under the Trust Agreement.
In addition, beneficial interests in a Global Capital Security may be exchanged
for certificated Exchange Capital Securities upon request but only upon at least
20 days prior written notice given to the Property Trustee by or on behalf of
DTC in accordance with customary procedures. In all cases, certificated Exchange
Capital Securities delivered in exchange for any Global Capital Security or
beneficial interests therein will be registered in the names, and issued in any
approved denominations, requested by or on behalf of the Depositary (in
accordance with its customary procedures).
Exchange of Certificated Capital Securities for Book-Entry Capital
Securities
Other Capital Securities, which will be issued in certificated form, may
not be exchanged for beneficial interests in any Global Capital Security unless
such exchange occurs in connection with a transfer of such other Capital
Securities and the transferor first delivers to the Property Trustee a written
certificate (in the
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form provided in the Trust Agreement) to the effect that such transfer will
comply with the appropriate transfer restrictions applicable to such Capital
Securities.
PAYMENT AND PAYING AGENCY
The clearing agency for the Exchange Capital Securities (the "Clearing
Agency") shall initially be DTC. Payments in respect of the Exchange Capital
Securities held in global form shall be made to the Clearing Agency, which shall
credit the relevant accounts at the Clearing Agency on the applicable
Distribution Dates or, in respect of the Exchange Capital Securities that are
not held by the Clearing Agency, such payments shall be made by check mailed to
the address of the holder entitled thereto as such address shall appear on the
register. The paying agent for the Exchange Capital Securities (the "Paying
Agent") shall initially be the Property Trustee. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Property
Trustee and the Company. In the event that the Property Trustee shall no longer
be the Paying Agent, the Administrative Trustees shall appoint a successor
(which shall be a bank or trust company acceptable to the Administrative
Trustees) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the
Exchange Capital Securities.
Registration of transfers of the Exchange Capital Securities will be
effected without charge by or on behalf of the Trust, subject to payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. The Trust will not be required to register or cause to be
registered the transfer of the Exchange Capital Securities after they have been
called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Trust Agreement and, after such Event of Default, must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this provision, the Property
Trustee is under no obligation to exercise any of the powers vested in it by the
Trust Agreement at the request of any holder of Trust Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby. If no Event of Default has occurred and is continuing
and the Property Trustee is required to decide between alternative causes of
action, construe ambiguous provisions in the Trust Agreement or is unsure of the
application of any provision of the Trust Agreement, and the matter is not one
on which holders of the Capital Securities or the Common Securities are entitled
under the Trust Agreement to vote, then the Property Trustee shall take such
action as is directed by the Company and, if not so directed, shall take such
action as it deems advisable and in the best interests of the holders of the
Trust Securities and will have no liability except for its own bad faith,
negligence or willful misconduct.
The Property Trustee currently provides commercial banking and other
services to the Company.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that the Trust (i) will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act, (ii) will continue to be classified for United States
federal income tax purposes as a grantor trust, and (iii) will cooperate with
the Company to ensure that the Junior Subordinated Debentures will be treated as
indebtedness of the Company for United States federal income tax purposes. In
this connection, the Administrative Trustees are authorized to take any action,
not inconsistent with applicable law, the certificate of trust of the Trust or
the Trust Agreement, that the Administrative Trustees determine in their
discretion to be necessary or desirable for such purposes, as long as such
action does not materially adversely affect the interests of the holders of the
Trust Securities.
Holders of the Trust Securities have no preemptive or similar rights.
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The Trust may not borrow money, issue debt, execute mortgages or pledge any
of its assets.
DESCRIPTION OF EXCHANGE JUNIOR SUBORDINATED DEBENTURES
The Old Junior Subordinated Debentures were issued and the Exchange Junior
Subordinated Debentures will be issued under the Indenture. The Indenture has
been qualified under the Trust Indenture Act. This summary of certain terms and
provisions of the Junior Subordinated Debentures and the Indenture does not
purport to be complete, and where reference is made to particular provisions of
the Indenture, such provisions, including the definitions of certain terms, some
of which are not otherwise defined herein, are qualified in their entirety by
reference to all of the provisions of the Indenture and those terms made a part
of the Indenture by the Trust Indenture Act.
GENERAL
Concurrently with the issuance of the Old Trust Securities, the Trust
invested the proceeds thereof, together with the consideration paid by the
Company for the Common Securities, in Junior Subordinated Debentures issued by
the Company. Pursuant to the Exchange Offer, the Company will exchange Exchange
Junior Subordinated Debentures, in an amount corresponding to the Old Capital
Securities accepted for exchange, for a like aggregate principal amount of the
Old Junior Subordinated Debentures as soon as practicable after the date hereof.
Interest on the Exchange Junior Subordinated Debentures will be cumulative,
and will accrue from January 31, 1997 (the date of original issuance of the Old
Junior Subordinated Debentures) or from the latest date to which interest
thereon has been duly paid or provided for at the annual rate of 8.82% of the
principal amount thereof, payable semi-annually in arrears on February 1 and
August 1 of each year (each, an "Interest Payment Date"), commencing August 1,
1997, to the person in whose name each Exchange Junior Subordinated Debenture is
registered, subject to certain exceptions, at the close of business on the
fifteenth day preceding the relevant payment date. It is anticipated that, until
the liquidation, if any, of the Trust, each Exchange Junior Subordinated
Debenture will be held in the name of the Property Trustee in trust for the
benefit of the holders of the Trust Securities. The amount of interest payable
for any period will be computed on the basis of a 360-day year of twelve 30-day
months and for any period less than 6 months, the actual months elapsed and the
actual days elapsed in a partial month in a period. In the event that any date
on which interest is payable on the Exchange Junior Subordinated Debentures is
not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay) with the same force and effect as
if made on the date such payment was originally payable. Accrued interest that
is not paid on the applicable Interest Payment Date will bear additional
interest on the amount thereof (to the extent permitted by law) at the rate per
annum of 8.82% thereof, compounded semiannually. The term "interest", as used
herein, shall include semi-annual interest payments, interest on semi-annual
interest payments not paid on the applicable Interest Payment Date and
Additional Sums (as defined below), as applicable.
The Exchange Junior Subordinated Debentures will be issued in denominations
of $1,000 and integral multiples thereof. The Exchange Junior Subordinated
Debentures will mature on February 1, 2037.
The Exchange Junior Subordinated Debentures will rank pari passu with Old
Junior Subordinated Debentures and with all Other Debentures and will be
unsecured and subordinate and junior in right of payment to the extent and in
the manner set forth in the Indenture to all Senior Indebtedness. See
"-- Subordination." Because the Company is a nonoperating holding company, the
right of the Company to participate in any distribution of assets of any
subsidiary upon such subsidiary's liquidation or reorganization or otherwise
(and thus the ability of holders of the Exchange Capital Securities to benefit
indirectly from such distribution), is subject to the prior claims of creditors
of that subsidiary, except to the extent that the Company may itself be
recognized as a creditor of that subsidiary. Accordingly, the Exchange Junior
Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Company's subsidiaries, and holders of Exchange Junior
Subordinated Debentures should look only to the assets of the Company for
payments on the Exchange Junior Subordinated Debentures. In addition, since the
Company's operating subsidiary is a reinsurance company subject to regulatory
control by the Connecticut Insurance Department, the ability of such subsidiary
to pay dividends to the Company without prior regulatory approval
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is limited by applicable laws and regulations. The Indenture does not limit the
incurrence or issuance of other secured or unsecured debt of the Company,
including Senior Indebtedness. See "-- Subordination."
FORM, REGISTRATION AND TRANSFER
If the Exchange Junior Subordinated Debentures are distributed to the
holders of the Trust Securities, the Exchange Junior Subordinated Debentures may
be represented by one or more global certificates registered in the name of Cede
& Co. as the nominee of DTC. The depositary arrangements for such Exchange
Junior Subordinated Debentures are expected to be substantially similar to those
in effect for the Exchange Capital Securities. For a description of DTC and the
terms of the depositary arrangements relating to payments, transfers, voting
rights, redemptions and other notices and other matters, see "-- Description of
Exchange Capital Securities -- Form, Denomination, Book-Entry Procedures and
Transfer."
PAYMENT AND PAYING AGENTS
Payment of principal, interest or premium, if any, on Exchange Junior
Subordinated Debentures will be made at the office of the Debenture Trustee in
The City of New York or at the office of such Paying Agent or Paying Agents as
the Company may designate from time to time, except that at the option of the
Company payment of any interest may be made (i) by check mailed to the address
of the Person entitled thereto as such address shall appear in the register for
Exchange Junior Subordinated Debentures or (ii) by transfer to an account
maintained by the Person entitled thereto as specified in such register,
provided that proper transfer instructions have been received by the relevant
Record Date. Payment of any interest on any Exchange Junior Subordinated
Debenture will be made to the Person in whose name such Exchange Junior
Subordinated Debenture is registered at the close of business on the Record Date
for such interest, except in the case of defaulted interest. The Company may at
any time designate additional Paying Agents or rescind the designation of any
Paying Agent.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Company in trust, for the payment of the principal, interest or
premium, if any, on any Exchange Junior Subordinated Debenture and remaining
unclaimed for two years after such principal, interest or premium, if any, has
become due and payable shall, at the request of the Company, be repaid to the
Company and the holder of such Exchange Junior Subordinated Debenture shall
thereafter look, as a general unsecured creditor, only to the Company for
payment thereof.
OPTION TO EXTEND INTEREST PAYMENT DATE
So long as no Debenture Event of Default has occurred and is continuing,
the Company will have the right under the Indenture at any time during the term
of the Exchange Junior Subordinated Debentures to defer the payment of interest
at any time or from time to time for a period not exceeding 10 consecutive
semi-annual periods with respect to each Extension Period, provided that no
Extension Period may extend beyond the Stated Maturity. At the end of such
Extension Period, the Company must pay all interest then accrued and unpaid
(together with interest thereon at the annual rate of 8.82%, compounded
semi-annually, to the extent permitted by applicable law). During an Extension
Period, interest will continue to accrue and holders of Exchange Junior
Subordinated Debentures (and holders of Exchange Capital Securities while
Exchange Capital Securities are outstanding) will be required to include the
accruals of such interest in gross income for United States federal income tax
purposes (as original issue discount) prior to the receipt of cash attributable
to such interest. See "Certain Federal Income Tax Consequences -- Interest
Income and Original Issue Discount."
During any such Extension Period, the Company may not and may not permit
any subsidiary to (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Company's capital stock (which includes common and preferred stock), (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company (including Other
Debentures) that rank pari passu with or junior in right of payment to the
Exchange Junior Subordinated Debentures or (iii) make any guarantee payments
with respect
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to any guarantee by the Company of the debt securities of any subsidiary of the
Company (including Other Guarantees) if such guarantee ranks pari passu with or
junior in right of payment to the Exchange Junior Subordinated Debentures (other
than (a) dividends or distributions in shares of, or options, warrants or rights
to subscribe for, or purchase shares of, common stock of the Company, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) as a direct result of, and only to the extent
necessary to avoid the issuance of fractional shares of the Company's capital
stock following, a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock, (e) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged and (f) purchases of common stock related to the issuance
of common stock or rights under any of the Company's benefit plans for its
directors, officers or employees or any of the Company's dividend reinvestment
plans). None of the Company's subsidiaries will be prohibited from declaring and
paying cash distributions with respect to its capital stock or from making
payments with respect to its debt securities.
Prior to the termination of any such Extension Period, and so long as no
Debenture Event of Default has occurred and is continuing, the Company may
further extend the Extension Period, provided that no Extension Period may
exceed 10 consecutive semi-annual periods or extend beyond the Stated Maturity.
Upon the termination of any such Extension Period and the payment of all amounts
then due on any Interest Payment Date, the Company may elect to begin a new
Extension Period, subject to the above requirements. No interest shall be due
and payable during an Extension Period, except at the end thereof. The Company
must give the Property Trustee, the Administrative Trustees and the Debenture
Trustee notice of its election of any Extension Period (or an extension thereof)
at least five Business Days prior to the earlier of (i) the date the
Distributions on the Trust Securities would have been payable except for the
election to begin or extend such Extension Period or (ii) the date the
Administrative Trustees are required to give notice to any securities exchange
or to holders of Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than five Business Days
prior to such record date. The Property Trustee shall give notice of the
Company's election to begin or extend a new Extension Period to the holders of
the Capital Securities. There is no limitation on the number of times that the
Company may elect to begin an Extension Period.
OPTIONAL PREPAYMENT
The Exchange Junior Subordinated Debentures will be prepayable, in whole or
in part, at the option of the Company on or after February 1, 2007, at a
prepayment price (the "Optional Prepayment Price") equal to the outstanding
principal amount of the Exchange Junior Subordinated Debentures to be prepaid,
plus accrued and unpaid interest thereon to the date of prepayment and any
Additional Sums (as defined in "-- Conditional Right to Shorten Maturity and
Special Event Prepayment").
CONDITIONAL RIGHT TO SHORTEN MATURITY AND SPECIAL EVENT PREPAYMENT
If a Tax Event occurs, then the Company will have the right, prior to the
termination of the Trust, either (i) to shorten the Stated Maturity of the
Junior Subordinated Debentures to the minimum extent required, but not less than
20 years from the date of original issuance thereof, such that in the written
opinion of counsel experienced in such matters delivered to the Company, after
shortening the maturity, interest paid on the Junior Subordinated Debentures
will be deductible for federal income tax purposes or (ii) to prepay the Junior
Subordinated Debentures as described below.
If a Special Event (as defined below) shall occur and be continuing, the
Company may, at its option, prepay the Junior Subordinated Debentures in whole
(but not in part) at any time within 90 days of the occurrence of such Special
Event, at a prepayment price (the "Special Event Prepayment Price") equal to the
greater of (i) 100% of the principal amount of such Junior Subordinated
Debentures or (ii) the sum, as determined by a Quotation Agent, of the present
values of the remaining scheduled payments of principal and interest thereon to
February 1, 2007, the first date on which the Junior Subordinated Debentures are
subject to optional prepayment, in each case discounted to the prepayment date
on a semiannual basis (assuming a
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360-day year consisting of twelve 30-day months and, for any period less than 6
months, the actual months elapsed and the actual days elapsed in a partial month
in such period) at the Adjusted Treasury Rate, plus, in each case, accrued and
unpaid interest thereon to the date of prepayment and any Additional Sums (as
defined herein).
A "Special Event" means a Conditional Tax Redemption Event (as defined
under "-- Description of Exchange Capital Securities -- Conditional Right to
Shorten Maturity and Special Event Redemption") or an Investment Company Event,
as the case may be.
"Adjusted Treasury Rate" means, with respect to any prepayment date, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such prepayment date plus (i) 1.25% if such prepayment date
occurs on or prior to February 1, 1998 and (ii) 0.50% in all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term to the Stated Maturity of the Junior Subordinated Debentures to be prepaid
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of the Junior Subordinated
Debentures.
"Quotation Agent" means: (i) Lehman Brothers Inc. and its successors;
provided, however, that if the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer; and (ii) any
other Primary Treasury Dealer selected by the Debenture Trustee after
consultation with the Company.
"Comparable Treasury Price" means, with respect to any prepayment date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of the Reference Treasury Dealer Quotations for such prepayment date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Debenture Trustee obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Quotation Agent and any prepayment date, the average, as determined by the
Debenture Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted to the
Debenture Trustee by such Quotation Agent at 5:00 p.m., New York City time, on
the third Business Day preceding such prepayment date.
"Additional Sums" as hereinafter used means the additional amounts as may
be necessary in order that the amount of Distributions then due and payable by
the Trust on the outstanding Capital Securities and Common Securities shall not
be reduced as a result of any additional taxes, duties and other governmental
charges to which the Trust has become subject as a result of a Tax Event.
Notice of any prepayment will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Exchange Junior
Subordinated Debentures to be prepaid at its registered address. Unless the
Company defaults in payment of the prepayment price, on and after the prepayment
date, interest ceases to accrue on such Exchange Junior Subordinated Debentures
called for prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Company will pay as
additional amounts on the Exchange Junior Subordinated Debentures the Additional
Sums.
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RESTRICTIONS ON CERTAIN PAYMENTS; COVENANTS AS TO THE TRUST
The Company will covenant that if, at any time, (1) there shall have
occurred any event of which the Company has actual knowledge that (x) is, or
with the giving of notice or the lapse of time, or both, would be, a Debenture
Event of Default and (y) in respect of which the Company shall not have taken
reasonable steps to cure, (2) the Company shall be in default with respect to
its payment of any obligations under the Guarantee and the Junior Subordinated
Debentures are held by the Trust or (3) the Company shall have given notice of
its election of an Extension Period as provided in the Indenture and shall not
have rescinded such notice, and such Extension Period, or any extension thereof,
shall have commenced, then the Company will not, and will not permit any
subsidiary to, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Company's capital stock (which includes common and preferred stock), (ii) make
any payment of principal, interest or premium, if any, on or repay or repurchase
or redeem any debt securities of the Company (including Other Debentures) that
rank pari passu with or junior in right of payment to the Exchange Junior
Subordinated Debentures or (iii) make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
(including under Other Guarantees) if such guarantee ranks pari passu with or
junior in right of payment to the Junior Subordinated Debentures (other than (a)
dividends or distributions in shares of, or options, warrants or rights to
subscribe for or purchase shares of, common stock of the Company, (b) any
declaration of a dividend in connection with the implementation of a
stockholder's rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) as a direct result of, and only to the extent
necessary to avoid the issuance of fractional shares of the Company's capital
stock following, a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock, (e) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, and (f) purchases of common stock related to the
issuance of common stock or rights under any of the Company's benefit plans for
its directors, officers or employees or any of the Company's dividend
reinvestment plans).
The Company's covenants will not prevent its subsidiaries from declaring
and paying cash distributions with respect to capital stock of the subsidiaries
or from making payments with respect to debt securities of the subsidiaries.
The Company has covenanted in the Indenture that, for so long as the
Exchange Junior Subordinated Debentures are issued to the Trust or a trustee of
the Trust, the Company will (i) directly or indirectly maintain ownership of all
of the outstanding Common Securities of the Trust, provided that certain
successors which are permitted pursuant to the Indenture may succeed to the
Company's ownership of the Common Securities, and (ii) to use its reasonable
efforts to cause the Trust (a) to remain a business trust, except in connection
with a distribution of Capital Securities, the redemption of all of the Trust
Securities or certain mergers, consolidations or amalgamations each as permitted
by the Trust Agreement, and (b) consistent with the terms and provisions of the
Trust Agreement, to continue to be classified as a grantor trust and not as an
association taxable as a Company for United States federal income tax purposes
and (iii) use its reasonable efforts to cause each holder to be treated as
owning an individual beneficial interest in the Capital Securities.
MODIFICATION OF INDENTURE
From time to time the Company and the Debenture Trustee may, without the
consent of the holders of Junior Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies (provided that any such action
does not materially adversely affect the interest of the holders of the Junior
Subordinated Debentures) and qualifying, or maintaining the qualification of,
the Indenture under the Trust Indenture Act. The Indenture contains provisions
permitting the Company and the Debenture Trustee, with the consent of the
holders of a majority in principal amount of Junior Subordinated Debentures, to
modify the Indenture in a manner affecting the rights of the holders of Junior
Subordinated Debentures; provided, that no such modification may, without the
consent of the holders of each outstanding Junior Subordinated Debenture so
affected, (i) change the Stated
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Maturity, or reduce the principal amount of the Junior Subordinated Debentures,
or reduce the rate or extend the time of payment of interest thereon or (ii)
reduce the percentage of principal amount of Junior Subordinated Debentures, the
holders of which are required to consent to any such modification of the
Indenture.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Junior Subordinated Debentures constitutes a
"Debenture Event of Default" (whatever the reason for such Debenture Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body): (i)
failure for 30 days to pay any interest on the Exchange Junior Subordinated
Debentures or any Other Debentures, when due (subject to the deferral of any due
date in the case of an Extension Period); or (ii) failure to pay any principal
of or premium, if any, on the Exchange Junior Subordinated Debentures or any
Other Debentures when due whether at maturity, upon redemption, by declaration
of acceleration of maturity or otherwise; or (iii) failure to observe or perform
in any material respect certain other covenants contained in the Indenture for
90 days after written notice to the Company from the Debenture Trustee or the
holders of at least 25% in aggregate outstanding principal amount of the Junior
Subordinated Debentures; or (iv) certain events in bankruptcy, insolvency or
reorganization of the Company.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee. The Debenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Junior Subordinated Debentures may declare
the principal due and payable immediately upon a Debenture Event of Default
(other than an Event of Default resulting from bankruptcy, insolvency or a
reorganization involving the Company). If an Event of Default results from
bankruptcy, insolvency or a reorganization involving the Company, the Debentures
shall become due and payable without any further action or notice. The holders
of a majority in aggregate outstanding principal amount of the Junior
Subordinated Debentures may annul such declaration and waive the default if the
default (other than the nonpayment of the principal of the Junior Subordinated
Debentures which has become due solely by such acceleration) has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures affected thereby may, on behalf of the holders of
all the Junior Subordinated Debentures, waive any past default, except a default
in the payment of principal, interest or premium, if any, (unless such default
has been cured and a sum sufficient to pay all matured installments of interest,
premium, if any, and principal due otherwise than by acceleration has been
deposited with the Debenture Trustee) or a default in respect of a covenant or
provision which under the Indenture cannot be modified or amended without the
consent of the holder of each outstanding Junior Subordinated Debenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF EXCHANGE CAPITAL SECURITIES
If a Debenture Event of Default shall have occurred and be continuing and
shall be attributable to the failure of the Company to pay principal of or
premium, if any, or interest on the Junior Subordinated Debentures on the due
date, a holder of Capital Securities may institute a Direct Action. The Company
may not amend the Indenture to remove the foregoing right to bring a Direct
Action without the prior written consent of the holders of all of the Capital
Securities. If the right to bring a Direct Action is removed following the
Exchange Offer, the Trust may become subject to the reporting obligations under
the Exchange Act. Notwithstanding any payments made to a holder of Exchange
Capital Securities by the Company in connection with a Direct Action, the
Company shall remain obligated to pay the principal of or premium, if any, or
interest on the Exchange Junior Subordinated Debentures, and the Company shall
be subrogated to the rights of the holder of such Capital Securities with
respect to payments on the Exchange Capital Securities to the extent of any
payments made by the Company to such holder in any Direct Action.
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The holders of the Exchange Capital Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Exchange Junior Subordinated Debentures unless
there shall have been an Event of Default under the Trust Agreement. See
"-- Description of Exchange Capital Securities -- Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Company shall not consolidate with or merge
into any other Person or sell, convey, transfer or lease its properties as an
entirety, or substantially as an entirety, to any Person, (whether or not
affiliated with the Company) unless: (i) the Company is the surviving Person or
the Person formed by or surviving such consolidation or merger or the Person to
which such sale, conveyance, transfer or lease of property is made is a Person
organized and existing under the laws of the United States or any State or the
District of Columbia, and such successor Person expressly assumes the Company's
obligations on the Junior Subordinated Debentures; (ii) immediately after giving
effect to such consolidation, merger, sale, conveyance, transfer or lease, no
Debenture Event of Default, and no event which, after notice or lapse of time or
both, would become a Debenture Event of Default, shall have occurred and be
continuing; and (iii) certain other conditions as prescribed in the Indenture
are met.
The general provisions of the Indenture do not afford holders of the Junior
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Company that may adversely affect holders of the
Exchange Junior Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Exchange Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
at maturity within one year or are to be called for prepayment within one year,
and the Company deposits or causes to be deposited with the Debenture Trustee
funds, in trust, for the purpose and in an amount sufficient to pay and
discharge the entire indebtedness on the Exchange Junior Subordinated Debentures
not previously delivered to the Debenture Trustee for cancellation, for the
principal and premium, if any, and interest to the date of the deposit or to the
Stated Maturity, as the case may be, then the Indenture will cease to be of
further effect (except as to the Company's obligations to pay all other sums due
pursuant to the Indenture and to provide the officers' certificates and opinions
of counsel described therein), and the Company will be deemed to have satisfied
and discharged the Indenture.
SUBORDINATION
In the Indenture, the Company has covenanted and agreed that any Exchange
Junior Subordinated Debentures issued thereunder will be subordinate and junior
in right of payment to all Senior Indebtedness to the extent provided in the
Indenture. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company, the holders of Senior Indebtedness will
first be entitled to receive payment in full before the holders of Junior
Subordinated Debentures will be entitled to receive or retain any payment in
respect thereof.
In the event of the acceleration of the maturity of the Junior Subordinated
Debentures, the holders of all Senior Indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full before the
holders of Junior Subordinated Debentures will be entitled to receive or retain
any payment in respect of the Junior Subordinated Debentures.
No payments on account of principal or premium, if any, or interest in
respect of the Junior Subordinated Debentures may be made if there shall have
occurred and be continuing a default in any payment with respect to Senior
Indebtedness, or an event of default with respect to any Senior Indebtedness
resulting in the acceleration of the maturity thereof, or if any judicial
proceeding shall be pending with respect to any such default.
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"Senior Indebtedness" shall mean, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (A) Indebtedness for
Money Borrowed and (B) indebtedness evidenced by securities, notes, debentures,
bonds or other similar instruments issued by the Company, (ii) all capital lease
obligations of the Company, (iii) all obligations of the Company issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any
conditional sale or title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business), (iv) all obligations,
contingent or otherwise of the Company in respect of any letter of credit,
banker's acceptance, security purchase facilities or similar credit transaction,
(v) all obligations in respect of interest rate swap, cap or other agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements, (vi) all obligations of
the type referred to in clauses (i) through (v) above of other persons for the
payment of which the Company is responsible or liable as obligor, guarantor or
otherwise and (vii) all obligations of the type referred to in clauses (i)
through (vi) above of other persons secured by any lien on any property or asset
of the Company (whether or not such obligation is assumed by the Company),
except for (1) any such indebtedness that is by its terms subordinated to or
pari passu with the Junior Subordinated Debentures and (2) any indebtedness
between or among the Company or its affiliates, including all other debt
securities and guarantees in respect of those debt securities issued to (a) any
other Trenwick Capital Trust or a trustee of such trust and (b) any other trust,
or a trustee of such trust, partnership or other entity affiliated with the
Company that is a financing vehicle of the Company (a "financing entity") in
connection with the issuance by such a financing entity of preferred securities
or other securities that rank pari passu with, or junior to, the Capital
Securities. Such Senior Indebtedness shall continue to be Senior Indebtedness
and be entitled to the benefits of the subordination provisions irrespective of
any amendment, modification or waiver of any term of such Senior Indebtedness.
"Indebtedness for Money Borrowed" shall mean any obligation of, or any
obligation guaranteed by, the Company for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments.
By reason of such subordination, in the event of an insolvency, creditors
of the Company who are holders of Senior Indebtedness, as well as certain
general creditors of the Company, may recover more, ratably, than the holders of
the Junior Subordinated Debentures. Additionally, the Company currently conducts
substantially all of its operations through a subsidiary, and the holders of
Junior Subordinated Debentures will be structurally subordinated to the
creditors of such subsidiary. The Company relies primarily on dividends from
such subsidiary to meet its obligations for payment of its corporate expenses
and principal and interest on its outstanding debt obligations. See "Risk
Factors -- Ranking of Subordinated Obligations under the Guarantee and the
Junior Subordinated Debentures."
The Indenture places no limitation on the amount of additional Senior
Indebtedness that may be incurred by the Company. The Company expects from time
to time to incur additional indebtedness constituting Senior Indebtedness.
GOVERNING LAW
The Indenture and the Exchange Junior Subordinated Debentures will be
governed by and construed and interpreted in accordance with the laws of the
State of New York, without regard to conflicts of laws principles thereof.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
Following the Exchange Offer and the qualification of the Indenture under
the Trust Indenture Act, the Debenture Trustee shall have and be subject to all
the duties and responsibilities specified with respect to an indenture trustee
under the Trust Indenture Act. Subject to such provisions, the Debenture Trustee
is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Exchange Junior Subordinated
Debentures, unless offered reasonable indemnity by such holder against the
costs, expenses and liabilities which might be incurred thereby. The Debenture
Trustee is not required to
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expend or risk its own funds or otherwise incur personal financial liability in
the performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
The Debenture Trustee currently provides commercial banking and other
services to the Company.
DESCRIPTION OF EXCHANGE GUARANTEE
The Old Guarantee was executed and delivered by the Company concurrently
with the issuance by the Trust of the Old Capital Securities for the benefit of
the holders from time to time of the Old Capital Securities. Upon consummation
of the Exchange Offer, the Old Guarantee will be exchanged by the Company for
the Exchange Guarantee for the benefit of the holders from time to time of the
Exchange Capital Securities. To the extent that Old Capital Securities are not
tendered and accepted pursuant to the Exchange Offer for Exchange Capital
Securities, the Company will continue to provide the holders of Old Capital
Securities with the guarantees set forth under the Old Guarantee. The Chase
Manhattan Bank will act as trustee ("Guarantee Trustee") under the Exchange
Guarantee. The Exchange Guarantee has been qualified under the Trust Indenture
Act. This summary description of all the material provisions of the Exchange
Guarantee does not purport to be complete and is subject to, and qualified in
its entirety by reference to, all of the provisions of the Exchange Guarantee,
including the definitions therein of certain terms, and the Trust Indenture Act.
The Guarantee Trustee will hold the Exchange Guarantee for the benefit of the
holders of the Exchange Capital Securities.
GENERAL
The Company will fully, irrevocably and unconditionally agree to pay in
full on a subordinated basis, to the extent set forth herein, the Guarantee
Payments (as defined below) to the holders of the Exchange Capital Securities,
as and when due, regardless of any defense, right of set-off or counterclaim
that the Trust may have or assert other than the defense of payment. The
following payments with respect to the Exchange Capital Securities, to the
extent not paid by or on behalf of the Trust (the "Guarantee Payments"), will be
subject to the Exchange Guarantee: (i) any accumulated and unpaid Distributions
required to be paid on Exchange Capital Securities, to the extent that the Trust
has funds on hand legally available therefor at such time, (ii) the applicable
Redemption Price with respect to Exchange Capital Securities called for
redemption, to the extent that the Trust has funds on hand legally available
therefor at such time, or (iii) upon a voluntary or involuntary termination and
liquidation of the Trust (other than in connection with the distribution of
Exchange Junior Subordinated Debentures to the holders of the Exchange Capital
Securities in exchange for Exchange Capital Securities as provided in the Trust
Agreement), the lesser of (a) the Liquidation Distribution and (b) the amount of
assets of the Trust remaining available for distribution to holders of Exchange
Capital Securities to the extent the Trust has funds on hand legally available
therefor at such time. The Company's obligation to make a Guarantee Payment may
be satisfied by direct payment of the required amounts by the Company to the
holders of the Exchange Capital Securities or by causing the Trust to pay such
amounts to such holders.
Because the Company is a holding company, the right of the Company to
participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise, is subject to the prior
claims of creditors of that subsidiary, except to the extent the Company may
itself be recognized as a creditor of that subsidiary. Accordingly, the
Company's obligations under the Exchange Guarantee will be effectively
subordinated to all existing and future liabilities of the Company's
subsidiaries, and claimants should look only to the assets of the Company for
payments thereunder. See "-- Description of Exchange Junior Subordinated
Debentures -- General." The Exchange Guarantee does not limit the incurrence or
issuance of other secured or unsecured debt of the Company, including Senior
Indebtedness, whether under the Indenture, any other indenture that the Company
has entered into or may enter into in the future or otherwise.
The Company will, through the Exchange Guarantee, the Trust Agreement, the
Exchange Junior Subordinated Debentures and the Indenture, taken together,
fully, irrevocably and unconditionally guarantee all of the Trust's obligations
under the Exchange Capital Securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents constitutes
such guarantee. It is only the
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combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Trust's obligations under the
Exchange Capital Securities. See "Relationship Among the Exchange Capital
Securities, the Exchange Junior Subordinated Debentures and the Exchange
Guarantee."
STATUS OF EXCHANGE GUARANTEE
The Exchange Guarantee will constitute an unsecured obligation of the
Company. The Exchange Guarantee and the Common Guarantee will be (i) subordinate
and junior in right of payment to all other liabilities of the Company; (ii)
pari passu with (A) the most senior preferred or preference stock now or
hereafter issued by the Company, and (B) any guarantee now or hereafter entered
into by the Company, in respect of any capital securities or common securities
of any Other Trusts; and (iii) senior to the Company's common stock.
The Exchange Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). The Exchange
Guarantee will be held for the benefit of the holders of the Capital Securities.
The Exchange Guarantee will not be discharged except by payment of the Guarantee
Payments in full to the extent not paid by the Trust or upon distribution to the
holders of the Exchange Capital Securities of the Exchange Junior Subordinated
Debentures. The Exchange Guarantee does not place a limitation on the amount of
additional Senior Indebtedness that may be incurred by the Company. The Company
expects from time to time to incur additional indebtedness constituting Senior
Indebtedness.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of the Exchange Capital Securities (in which case no
consent of holders will be required), the Exchange Guarantee may not be amended
without the prior approval of the holders of a majority of the Liquidation
Amount of such outstanding Exchange Capital Securities. The manner of obtaining
any such approval will be as set forth under "-- Description of the Exchange
Capital Securities -- Voting Rights; Amendment of the Trust Agreement." All
guarantees and agreements contained in the Exchange Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Company and
shall inure to the benefit of the holders of the Exchange Capital Securities
then outstanding.
EVENTS OF DEFAULT
An event of default under the Exchange Guarantee will occur upon the
failure of the Company to perform any of its payment or other obligations
thereunder. The holders of a majority in Liquidation Amount of the Exchange
Capital Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Exchange Guarantee or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under the Exchange Guarantee.
Any holder of the Exchange Capital Securities may institute a legal
proceeding directly against the Company to enforce its rights under the Exchange
Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity.
The Company, as guarantor, will be required to file annually with the
Guarantee Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants applicable to it under the
Exchange Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the continuance of a default by
the Company in performance of the Exchange Guarantee, will undertake to perform
only such duties as are specifically set forth in the Exchange Guarantee and,
during the continuance of such a default, must exercise the same degree of care
and skill as a prudent person would exercise or use in the conduct of his or her
own affairs. Subject to this provision, the Guarantee Trustee will be under no
obligation to exercise any of the powers vested in it by the Exchange Guarantee
at the request of any holder of the Exchange Capital Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
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The Guarantee Trustee currently provides commercial banking and other
services to the Company.
TERMINATION OF THE EXCHANGE GUARANTEE
The Exchange Guarantee will terminate and be of no further force and effect
upon full payment of the applicable Redemption Price of the Exchange Capital
Securities, upon full payment of the Liquidation Amount payable upon liquidation
of the Trust or upon distribution of Exchange Junior Subordinated Debentures to
the holders of the Capital Securities. The Exchange Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
holder of the Exchange Capital Securities must restore payment of any sums paid
under the Exchange Capital Securities or the Exchange Guarantee.
GOVERNING LAW
The Exchange Guarantee will be governed by and construed and interpreted in
accordance with the laws of the State of New York, without regard to conflicts
of laws principles thereof.
DESCRIPTION OF OLD SECURITIES
The information contained in this section is relevant to holders of Old
Securities whose Old Securities are not to be tendered and accepted for exchange
by the Expiration Date of the Exchange Offer. See "Risk Factors -- Consequences
of a Failure to Exchange Old Capital Securities."
The terms of the Old Securities are identical in all material respects to
the Exchange Securities, except that (i) the Old Securities have not been
registered under the Securities Act, are subject to certain restrictions on
transfer and are entitled to certain rights under the Registration Rights
Agreement (which rights will terminate upon consummation of the Exchange Offer,
except under limited circumstances), (ii) the Old Securities contain a $100,000
minimum Liquidation Amount transfer restriction and certain other restrictions
on transfer applicable to Old Capital Securities, (iii) the Old Capital
Securities provide for additional Distributions which will terminate as set
forth below, (iv) the Old Junior Subordinated Debentures contain a $100,000
minimum principal amount transfer restriction and (v) the Old Junior
Subordinated Debentures provide for additional interest which will terminate as
set forth below. The Registration Rights Agreement provides that, if an Exchange
Offer Registration Statement or a Shelf Registration Statement (if required to
be filed) is not declared effective by the Commission on or prior to July 25,
1997, Additional Interest shall accrue on the principal amount of the Junior
Subordinated Debentures affected thereby, and Additional Distributions will
accumulate on the Liquidation Amount of the Trust Securities affected thereby
commencing July 28, 1997, at the rate of 0.25% per annum of the Liquidation
Amount of the Old Capital Securities, for the period from the occurrence of such
event until such time the Exchange Offer Registration Statement or any required
Shelf Registration Statement is declared effective. In addition, if the Exchange
Offer is not consummated on or prior to the 30th day after the date on which the
Exchange Offer Registration Statement is declared effective, Additional Interest
shall accrue on the principal amount of the Junior Subordinated Debentures
affected thereby and Additional Distributions will accumulate on the Liquidation
Amount of the Trust Securities affected thereby, until the Exchange Offer is
consummated. Upon the completion of the Exchange Offer, the Company and the
Trust will have satisfied their obligations under the Registration Rights
Agreement and the Old Securities will not be entitled to any such additional
interest or Distributions. Accordingly, holders of Old Capital Securities should
review the information set forth under "Risk Factors -- Consequences of a
Failure to Exchange Old Capital Securities" and "Description of Exchange
Securities."
RELATIONSHIP AMONG THE EXCHANGE CAPITAL SECURITIES, THE
EXCHANGE JUNIOR SUBORDINATED DEBENTURES AND THE EXCHANGE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Exchange Capital
Securities (to the extent the Trust has funds on hand legally available for the
payment of such Distributions) will be irrevocably guaranteed by the Company as
and to the extent set forth under "Description of Exchange
Securities -- Description of Exchange Guarantee." Taken together, the Company's
obligations under the Exchange Junior Subordinated Debentures, the Indenture,
the Trust Agreement and the Exchange Guarantee will provide, in the aggregate, a
full, irrevocable and unconditional guarantee of payments of Distributions and
other amounts due on the
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Exchange Capital Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Exchange Capital Securities. If and to the extent
that the Company does not make the required payments on the Exchange Junior
Subordinated Debentures, the Trust will not have sufficient funds to make the
related payments, including Distributions, on the Exchange Capital Securities.
The Exchange Guarantee will not cover any such payment when the Trust does not
have sufficient funds on hand legally available therefor. In such event, the
remedy of a holder of Exchange Capital Securities is to institute a Direct
Action. The obligations of the Company under the Exchange Guarantee will be
subordinate and junior in right of payment to all Senior Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Exchange Junior Subordinated Debentures, such payments will be sufficient to
cover Distributions and other payments due on the Exchange Capital Securities,
primarily because: (i) the aggregate principal amount or Prepayment Price of the
Exchange Junior Subordinated Debentures will be equal to the sum of the
Liquidation Amount or Redemption Price, as applicable, of the Exchange Capital
Securities and Common Securities; (ii) the interest rate and interest and other
payment dates on the Exchange Junior Subordinated Debentures will match the
Distribution rate and Distribution and other payment dates for the Trust
Securities; (iii) the Company shall pay for all and any costs, expenses and
liabilities of the Trust except the Trust's obligations to holders of Trust
Securities under such Trust Securities; and (iv) the Trust Agreement provides
that the Trust is not authorized to engage in any activity that is not
consistent with the limited purposes thereof.
ENFORCEMENT RIGHTS OF HOLDERS OF EXCHANGE CAPITAL SECURITIES
A holder of any Exchange Capital Security may institute a legal proceeding
directly against the Company to enforce its rights under the Exchange Guarantee
without first instituting a legal proceeding against the Guarantee Trustee, the
Trust or any other person or entity. A default or event of default under any
Senior Indebtedness would not constitute a default or Event of Default under the
Trust Agreement. However, in the event of payment defaults under, or
acceleration of, Senior Indebtedness, the subordination provisions of the
Indenture provide that no payments may be made in respect of the Exchange Junior
Subordinated Debentures until such Senior Indebtedness has been paid in full or
any payment default thereunder has been cured or waived. Failure to make
required payments on Exchange Junior Subordinated Debentures would constitute an
Event of Default under the Trust Agreement.
LIMITED PURPOSE OF THE TRUST
The Exchange Capital Securities will represent preferred beneficial
interests in the Trust. The Trust exists for the exclusive purposes of (i)
issuing and selling the Trust Securities, (ii) effecting the Exchange Offer or
filing a Shelf Registration Statement, (iii) using the proceeds from the sale of
Trust Securities to acquire the Junior Subordinated Debentures, (iv) making
Distributions to holders of the Trust Securities as provided in the Trust
Agreement and (v) engaging in only those other activities necessary, advisable
or incidental thereto (such as registering the transfer of the Trust
Securities). A principal difference between the rights of a holder of an
Exchange Capital Security and a holder of Exchange Junior Subordinated Debenture
is that a holder of a Exchange Junior Subordinated Debenture will be entitled to
receive from the Company the principal amount of (and premium, if any) and
interest on Exchange Junior Subordinated Debentures held, while a holder of
Exchange Capital Securities is entitled to receive Distributions from the Trust
(or, in certain circumstances, from the Company under the Exchange Guarantee) if
and to the extent the Trust has funds on hand legally available for the payment
of such Distributions.
RIGHTS UPON DISSOLUTION
Unless the Exchange Junior Subordinated Debentures are distributed to
holders of the Trust Securities, upon any voluntary or involuntary termination
and liquidation of the Trust, the holders of the Trust Securities will be
entitled to receive, out of assets held by the Trust, the Liquidation
Distribution in cash. See
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"Description of Exchange Securities -- Description of Exchange Capital
Securities -- Liquidation of the Trust and Distribution of Exchange Junior
Subordinated Debentures." Upon any voluntary or involuntary liquidation or
bankruptcy of the Company, the Property Trustee, as holder of the Exchange
Junior Subordinated Debentures, would be a subordinated creditor of the Company,
subordinated in right of payment to all Senior Indebtedness as set forth in the
Indenture, but entitled to receive payment in full of principal (and premium, if
any) and interest, before any stockholders of the Company receive payments or
distributions. Since the Company will be the guarantor under the Exchange
Guarantee and will agree to pay for all costs, expenses and liabilities of the
Trust (other than the Trust's obligations to the holders of its Trust
Securities), the positions of a holder of Exchange Capital Securities and a
holder of Exchange Junior Subordinated Debentures relative to stockholders of
the Company in the event of liquidation or bankruptcy of the Company are
expected to be substantially the same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
In the opinion of Baker & McKenzie, tax counsel to the Company and the
Trust ("Tax Counsel"), the following is a summary of the material United States
federal income tax consequences of the exchange of Old Securities for Exchange
Securities, and the purchase, ownership and disposition of Exchange Capital
Securities held as capital assets by a holder. This summary does not deal with
special classes of holders such as banks, thrifts, real estate investment
trusts, regulated investment companies, insurance companies, dealers in
securities or currencies, tax-exempt investors, or persons that hold or will
hold the Capital Securities as a position in a "straddle," as part of a
"synthetic security" or "hedge," as part of a "conversion transaction" or other
integrated investment, or as other than a capital asset. This summary also does
not address the tax consequences to persons that have a functional currency
other than the U.S. dollar or the tax consequences to shareholders, partners or
beneficiaries of a holder of Capital Securities. Further, it does not include
any description of any alternative minimum tax consequences or the tax laws of
any state or local government or of any foreign government that may be
applicable to the Capital Securities. This summary is based on the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury regulations thereunder,
the administrative and judicial interpretations thereof, as of the date hereof,
all of which are subject to change, possibly on a retroactive basis. An opinion
of Tax Counsel is not binding on the Internal Revenue Service (the "IRS") or the
courts. Prospective investors should note that no rulings have been or are
expected to be sought from the IRS and no assurance can be given that the IRS
will not take contrary positions. Moreover, no assurance can be given that any
of the opinions expressed herein will not be challenged by the IRS or, if
challenged, that such a challenge would not be successful.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Old Capital Securities, Tax Counsel
rendered its opinion that, under then current law and assuming full compliance
with the terms of the Trust Agreement and the Indenture (and certain other
documents), and based on certain facts and assumptions contained in such
opinion, the Trust will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corporation.
Accordingly, for United States federal income tax purposes, each holder of
Capital Securities generally will be considered the owner of an undivided
interest in the Junior Subordinated Debentures, and each holder will be required
to include in its gross income any interest (or accrued original issue discount
("OID")) with respect to its allocable share of those Junior Subordinated
Debentures.
EXCHANGE OF CAPITAL SECURITIES
The exchange of Old Capital Securities for Exchange Capital Securities
should not be a taxable event to holders for United States federal income tax
purposes because (a) the Exchange Capital Securities and Exchange Junior
Subordinated Debentures should not be considered to differ materially in kind or
extent from the Old Capital Securities and Old Junior Subordinated Debentures
and (b) the exchange will occur by
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operation of the terms of the Old Capital Securities and Old Junior Subordinated
Debentures. If, however, the exchange of the Old Capital Securities for the
Exchange Capital Securities were treated as an exchange for federal income tax
purposes, such exchange should constitute a tax-free recapitalization for United
States federal income tax purposes. Accordingly, the Exchange Capital Securities
and Exchange Junior Subordinated Debentures should have the same issue price as
the Old Capital Securities and Old Junior Subordinated Debentures, and a holder
should have the same adjusted tax basis and holding period in the Exchange
Capital Securities and Exchange Junior Subordinated Debentures as the holder had
in the Old Capital Securities and Old Junior Subordinated Debentures immediately
before the exchange.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
In connection with the issuance of the Old Junior Subordinated Debentures,
Tax Counsel rendered its opinion generally to the effect that, under then
current law and assuming full compliance with the terms of the Indenture (and
certain other documents), and based on certain facts and assumptions contained
in such opinion, the Old Junior Subordinated Debentures will be classified for
United States federal income tax purposes as indebtedness of the Company.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury regulations (the "Regulations") applicable
to debt instruments issued on or after August 13, 1996, a "remote" contingency
that stated interest will not be timely paid will be ignored in determining
whether a debt instrument is issued with OID. The Company believes that the
likelihood of its exercising its option to defer payments of interest is
"remote" since exercising that option would prevent the Company from declaring
dividends on any class of its equity securities. Accordingly, the Company
intends to take the position that the Junior Subordinated Debentures will not be
considered to have been issued with OID and, accordingly, stated interest on the
Junior Subordinated Debentures generally will be taxable to a holder as ordinary
income at the time it is paid or accrued in accordance with such holder's method
of accounting.
Under the Regulations, if the Company were to exercise its option to defer
payments of interest, the Junior Subordinated Debentures would at that time be
treated as reissued with OID, and all stated interest on the Junior Subordinated
Debentures would thereafter be treated as OID as long as the Junior Subordinated
Debentures remain outstanding. In such event, all of a holder's taxable interest
income with respect to the Junior Subordinated Debentures would thereafter be
accounted for on an economic accrual basis regardless of such holder's method of
tax accounting, and actual distributions of stated interest would not be
reported as taxable income. Consequently, a holder of Capital Securities would
be required to include in gross income OID even though the Company would not
make actual cash payments during an Extension Period. Moreover, under the
Regulations, if the option to defer the payment of interest was determined not
to be "remote", the Junior Subordinated Debentures would be treated as having
been originally issued with OID. In such event, all of a holder's taxable
interest income with respect to the Junior Subordinated Debentures would be
accounted for on an economic accrual basis regardless of such holder's method of
tax accounting, and actual distributions of stated interest would not be
reported as taxable income.
The Regulations have not yet been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to the interpretation herein.
Because income on the Capital Securities will constitute interest or OID,
corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Capital Securities.
MARKET DISCOUNT AND BOND PREMIUM
If a holder has acquired a Capital Security, other than upon original
issue, for an amount less than its issue price, the Capital Security may be
considered a "market discount bond." If a Capital Security is a market discount
bond, a portion of the gain on the sale or redemption of the Capital Security
(see "-- Sales of Capital Securities") equal to the amount of the market
discount accrued with respect to the Capital Security
55
<PAGE> 66
while it was held by the holder will be treated as interest income. In addition,
interest on indebtedness incurred to purchase or carry the Capital Security that
is a market discount bond, to the extent that it exceeds in any year the
interest on the Capital Security to be included in the holder's income for that
year, may not be fully deductible in that year. The foregoing market discount
rules will not apply if the holder elects to include in income in each taxable
year the portion of the market discount attributable to that year (accrued on
either a straight line or constant interest rate basis) with respect to all
market discount bonds acquired during or after the taxable year in which such
election is made. This election may be revoked only with the consent of the IRS.
If a holder has acquired a Capital Security, other than upon original
issue, for an amount more than its stated redemption price at maturity, such
holder may elect to amortize such bond premium on a yield to maturity basis.
This election results in a deemed election to apply the same accrual principles
to all of the holder's debt instruments with amortizable bond premium. This
election may be revoked only with the consent of the IRS.
RECEIPT OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF THE TRUST
The Company will have the right at any time to liquidate the Trust and
cause the Junior Subordinated Debentures to be distributed to the holders of the
Trust Securities. Under current law, such a distribution, for United States
federal income tax purposes, would be treated as a nontaxable event to each
holder, and each holder would receive an aggregate tax basis in the Junior
Subordinated Debentures equal to such holder's aggregate tax basis in its
Capital Securities. A holder's holding period in the Junior Subordinated
Debentures so received in liquidation of the Trust would include the period
during which the Capital Securities were held by such holder. If, however, the
Trust is characterized for United States federal income tax purposes as an
association taxable as a corporation at the time of its dissolution, the
distribution of the Junior Subordinated Debentures may constitute a taxable
event to holders of Capital Securities and a holder's holding period in Junior
Subordinated Debentures would begin on the date such Junior Subordinated
Debentures were received.
Under certain circumstances described herein (see "Description of Exchange
Securities -- Description of Exchange Capital Securities"), the Junior
Subordinated Debentures may be redeemed for cash and the proceeds of such
redemption distributed to holders in redemption of their Capital Securities.
Under current law, such a redemption would, for United States federal income tax
purposes, constitute a taxable disposition of the redeemed Capital Securities,
and a holder could recognize gain or loss as if it sold such redeemed Capital
Securities for cash. See "-- Sales of Capital Securities."
SALES OF CAPITAL SECURITIES
A holder that sells Capital Securities will recognize gain or loss equal to
the difference between its adjusted tax basis in the Capital Securities and the
amount realized on the sale of such Capital Securities (other than with respect
to accrued and unpaid interest which has not yet been included in income, which
will be treated as ordinary income). A holder's adjusted tax basis in the
Capital Securities generally will be its initial purchase price increased by OID
(if any) previously includible in such holder's gross income to the date of
disposition and decreased by payments (if any) received on the Capital
Securities in respect of OID. Subject to the discussion under "Certain Federal
Income Tax Consequences -- Market Discount and Bond Premium" such gain or loss
generally will be a capital gain or loss and generally will be a long-term
capital gain or loss if the Capital Securities have been held for more than one
year.
The Capital Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures. A holder who uses the accrual method of
accounting for tax purposes (and a cash method holder, if the Junior
Subordinated Debentures are deemed to have been issued with OID) who disposes of
his Capital Securities between record dates for payments of distributions
thereon will be required to include accrued but unpaid interest on the Junior
Subordinated Debentures through the date of disposition in income as ordinary
income (i.e., interest or, possibly, OID), and to add such amount to his
adjusted tax basis in his pro rata share of the underlying Junior Subordinated
Debentures deemed disposed of. To the extent the selling price is less than the
holder's adjusted
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<PAGE> 67
tax basis (which will include all accrued but unpaid interest) a holder will
recognize a capital loss. Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States federal income tax
purposes.
PROPOSED TAX LEGISLATION
On February 6, 1997, as part of the Clinton Administration's Fiscal 1998
Budget Proposal, the Treasury Department proposed legislation (the "Proposed
Legislation") which would, among other things, generally deny corporate issuers
a deduction for interest in respect of debt obligations, possibly including the
Junior Subordinated Debentures, issued on or after the date "of first committee
action," if such debt obligations have a maximum term in excess of 15 years and
are not shown as indebtedness on the issuer's applicable consolidated balance
sheet. In addition, the Proposed Legislation would generally deny corporate
issuers a deduction for interest in respect of certain debt obligations,
possibly including the Junior Subordinated Debentures, issued after the date
"of first committee action," if such debt obligations have a weighted average
maturity of more than 40 years. The Proposed Legislation has not yet been
introduced by any member of the 105th Congress. If Congress were to enact any
other proposed legislation, and if such enactment gave rise to a Tax Event, the
Company would be permitted to cause a redemption of the Trust Securities at the
Special Event Prepayment Price by electing to prepay the Junior Subordinated
Debentures at the Special Event Prepayment Price. See "Description of Exchange
Securities -- Description of Exchange Junior Subordinated Debentures --
Conditional Right to Shorten Maturity and Special Event Prepayment."
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is not a U.S. Holder
for United States federal income tax purposes and for whom the income, and gain
or loss, from the Exchange Capital Securities would not be treated as
effectively connected with a United States trade or business. A "U.S. Holder" is
a holder of Capital Securities who or which is a citizen or individual resident
(or is treated as a citizen or individual resident) of the United States for
federal income tax purposes, a corporation or partnership created or organized
(or treated as created or organized for federal income tax purposes) in or under
the laws of the United States or any political subdivision thereof, or a trust
or estate the income of which is includible in its gross income for federal
income tax purposes without regard to its source. (For taxable years beginning
after December 31, 1996 (or for the immediately preceding taxable year, if the
trustee of a trust so elects), a trust is a U.S. Holder for federal income tax
purposes if, and only if, (i) a court within the United States is able to
exercise primary supervision over the administration of the trust and (ii) one
or more United States trustees have the authority to control all substantial
decisions of the trust.) Under present United States federal income tax laws:
(i) payments by the Trust or any of its paying agents to any holder of a Capital
Security who or which is a United States Alien Holder will not be subject to
United States federal withholding tax; provided that, (a) the beneficial owner
of the Capital Security does not actually or constructively own 10 percent or
more of the total combined voting power of all classes of stock of the Company
entitled to vote, (b) the beneficial owner of the Capital Security is not a
controlled foreign corporation that is related to the Company through stock
ownership, and (c) either (A) the beneficial owner of the Capital Security
certifies to the Trust or its agent, under penalties of perjury, that it is not
a United States holder and provides its name and address or (B) a securities
clearing organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Capital Security in such capacity, certifies to the
Trust or its agent, under penalties of perjury, that such statement has been
received from the beneficial owner by it or by a Financial Institution between
it and the beneficial owner and furnishes the Trust or its agent with a copy
thereof; and (ii) a United States Alien Holder of a Capital Security will not be
subject to United States federal withholding tax on any gain realized upon the
sale or other disposition of a Capital Security.
INFORMATION REPORTING TO HOLDERS
Generally, income on the Capital Securities will be reported to holders on
Forms 1099, which forms should be mailed to holders of Capital Securities by
January 31 following each calendar year.
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<PAGE> 68
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Capital Securities may
be subject to a "backup" withholding tax of 31 percent unless the holder
complies with certain identification requirements. Any withheld amounts will be
allowed as a credit against the holder's United States federal income tax,
provided the required information is provided to the IRS.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL
OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
A fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), (an "ERISA Plan") considering the exchange of Old Capital Securities
for Exchange Capital Securities, or an acquisition of Exchange Capital
Securities (or any interest therein) from a holder of such Exchange Capital
Securities (or any interest therein) should consider the fiduciary standards of
ERISA in the context of the ERISA Plan's particular circumstances before
authorizing the investment in the Exchange Capital Securities (or any interest
therein). Among other factors, the fiduciary should consider whether such an
investment is in accordance with the documents governing the ERISA Plan and
whether the investment is appropriate for the ERISA Plan in view of its overall
investment policy and diversification of its portfolio.
Certain provisions of ERISA and the Code prohibit ERISA Plans, as well as
individual retirement accounts and Keogh plans subject to section 4975 of the
Code (collectively, "Plans"), from engaging in certain transactions involving
"plan assets" with parties that are "parties in interest" under ERISA or
"disqualified persons" under the Code with respect to the Plan. The U.S.
Department of Labor has issued a final regulation (the "Regulation") with regard
to whether the underlying assets of an entity in which employee benefit plans
acquire equity interests are deemed to be plan assets.
Under such Regulation, for purposes of ERISA and section 4975 of the Code,
the assets of the Trust would be deemed to be "plan assets" of a Plan whose
assets were used to purchase Exchange Capital Securities (or any interest
therein) if the Exchange Capital Securities (or any interest therein) were
considered to be equity interests in the Trust and no exception to plan asset
status were applicable under the Regulation.
If the assets of the Trust were deemed to be plan assets of Plans that are
holders of the Exchange Capital Securities (or any interest therein), a Plan's
investment in the Exchange Capital Securities (or any interest therein) might be
deemed to constitute a delegation under ERISA of the duty to manage plan assets
by a fiduciary investing in Exchange Capital Securities (or any interest
therein). In addition, the Company might be considered a "party in interest" or
"disqualified person" with respect to Plans whose assets were used to acquire
Exchange Capital Securities (or any interest therein). If this were the case, an
investment in Exchange Capital Securities (or any interest therein) by a Plan
might constitute or, in the course of the operation of the Trust, give rise to a
prohibited transaction under ERISA or the Code. In particular, it is likely
that, under such circumstances, a prohibited "extension of credit" to the
Company would be considered to occur under ERISA and the Code.
Because of the possibility that the assets of the Trust would be considered
plan assets of Plans whose assets were invested in the Exchange Capital
Securities (or any interest therein), and the likelihood that under such
circumstances a prohibited extension of credit would occur, the Exchange Capital
Securities (or any interest therein) may not be purchased or held by any Plan or
any person investing "plan assets" of any Plan,
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<PAGE> 69
unless such purchaser or holder is eligible for the exemptive relief available
under Prohibited Transaction Class Exemption ("PTCE") 96-23 (for certain
transactions determined by in-house asset managers), PTCE 95-60 (for certain
transactions involving insurance company general accounts), PTCE 91-38 (for
certain transactions involving bank collective investment funds), PTCE 90-1 (for
certain transactions involving insurance company separate accounts) or PTCE
84-14 (for certain transactions determined by independent qualified asset
managers). The certificates representing the Exchange Capital Securities will
bear a legend to the effect that either (a) the holder of the Exchange Capital
Securities (or any interest therein) is not a Plan and is not purchasing such
securities (or any interest therein) on behalf of or with "plan assets" of any
Plan or (b) the holder's purchase and holding of the Exchange Capital Securities
(or any interest therein) is eligible for the exemptive relief available under
PTCE 96-23, 95-60, 91-38, 90-1 or 84-14. Such legend will also require each
holder of a Exchange Capital Security (or any interest therein) to deliver to
the transferee of such Exchange Capital Security (or interest therein) notice of
such restriction.
Due to the complexity of these rules and the penalties imposed upon persons
involved in prohibited transactions, it is important that any person considering
the purchase of Exchange Capital Securities (or interest therein) with Plan
assets consult with its counsel regarding the consequences under ERISA and the
Code of the acquisition and ownership of Exchange Capital Securities (or
interest therein) and the availability of exemptive relief under the class
exemptions listed above. In John Hancock Mutual Life Insurance Co. v. Harris
Trust and Savings Bank, 114 S.Ct. 517 (1993), the Supreme Court ruled that
assets held in an insurance company's general account may be deemed to be "plan
assets" for ERISA purposes under certain circumstances. Employee benefit plans
which are governmental plans (as defined in Section 3(32) of ERISA) and certain
church plans (as defined in Section 3(33) of ERISA) generally are not subject to
ERISA's requirements.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Capital Securities for its own
account in connection with the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Capital
Securities. This Prospectus, as it may be amended or supplemented from time to
time, may be used by Participating Broker-Dealers during the period referred to
below in connection with resales of Exchange Capital Securities received in
exchange for Old Capital Securities if such Old Capital Securities were acquired
by such Participating Broker-Dealers for their own accounts as a result of
market-making activities or other trading activities. The Company and the Trust
have agreed that this Prospectus, as it may be amended or supplemented from time
to time, may be used by a Participating Broker-Dealer in connection with resales
of such Exchange Capital Securities for a period ending 90 days after the
Expiration Date (subject to extension under certain limited circumstances
described herein) or, if earlier, when all such Exchange Capital Securities have
been disposed of by such Participating Broker-Dealer. However, a Participating
BrokerDealer who intends to use this Prospectus in connection with the resale of
Exchange Capital Securities received in exchange for Old Capital Securities
pursuant to the Exchange Offer must notify the Company or the Trust, or cause
the Company or the Trust to be notified, on or prior to the Expiration Date,
that it is a Participating Broker-Dealer. Such notice may be given in the space
provided for that purpose in the Letter of Transmittal or may be delivered to
the Exchange Agent at one of the addresses set forth herein under "The Exchange
Offer -- Exchange Agent." See "The Exchange Offer -- Resales of Exchange Capital
Securities."
The Company or the Trust will not receive any cash proceeds from the
issuance of the Exchange Capital Securities offered hereby. Exchange Capital
Securities received by broker-dealers for their own accounts in connection with
the Exchange Offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Capital Securities or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Capital Securities.
59
<PAGE> 70
Any broker-dealer that resells Exchange Capital Securities that were
received by it for its own account in connection with the Exchange Offer and any
broker or dealer that participates in a distribution of such Exchange Capital
Securities may be deemed to be an "underwriter" within the meaning of the
Securities Act, and any profit on any such resale of Exchange Capital Securities
and any commissions or concessions received by any such persons may be deemed to
be underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
LEGAL MATTERS
The validity of the Exchange Guarantee and the Exchange Junior Subordinated
Debentures will be passed upon for the Company and the Trust by Baker &
McKenzie, New York, New York. Certain matters relating to United States federal
income tax considerations will be passed upon for the Company and the Trust by
Baker & McKenzie, New York, New York. Certain matters of Delaware law relating
to the validity of the Exchange Capital Securities will be passed upon for the
Company by Potter Anderson & Corroon, Wilmington, Delaware.
EXPERTS
The consolidated financial statements of the Company and subsidiaries
incorporated by reference in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996, have been incorporated herein by reference
in reliance upon the reports of Price Waterhouse LLP, independent accountants,
given upon the authority of such firm as experts in accounting and auditing.
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<PAGE> 71
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The General Corporation Law of the State of Delaware ("Delaware
Law")authorizes corporations to limit or eliminate the personal liability of
directors to corporations and their stockholders for monetary damages for breach
of directors' fiduciary duty of care. Article IV of the Company's By-laws
requires indemnification of the Company's directors and officers to the fullest
extent permitted by the Delaware Law and provides for the advancement of defense
expenses provided the director or officer agrees to repay the advance if it is
ultimately determined that he is not entitled to indemnification. Article IV
also provides that the indemnification provided by the By-laws is not exclusive.
Section 145(a) of the Delaware Law provides in general that a corporation may
indemnify anyone who is or may be a party to a legal proceeding by reason of his
service as a director or officer against expenses, judgments, fines and
settlement payments actually and reasonably incurred if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and, as to any criminal proceeding, had no
reasonable cause to believe his conduct was unlawful. Section 145(b) of the
Delaware Law provides similarly where the proceeding is by or in the right of
the corporation to procure a judgment in its favor. Section 145(g) of the
Delaware Law allows a corporation to maintain insurance on behalf of any officer
or director against any liability incurred by him in such capacity, whether or
not the corporation would have the power to indemnify him against such liability
under law. The Company maintains such directors and officers liability insurance
in an amount aggregating $20 million.
Each of the Company's directors has entered into a supplementary indemnity
agreement with the Company which (i) confirms the indemnity set forth in the
By-laws and gives assurances that such indemnity will continue to be provided
despite any By-law changes and (ii) provides, subject to certain conditions,
that the director shall be indemnified to the fullest extent permitted by law
against all expenses, fines and settlement amounts incurred or paid by him in
any proceeding.
As permitted by Section 102(b)(7) of the Delaware Law, Article 12 of the
Company's Certificate of Incorporation eliminates personal liability of any
director to the Company and its stockholders for breach of the director's
fiduciary duty of care, except where the director has breached his duty of
loyalty, acted in bad faith, engaged in intentional or knowing misconduct,
negligently or willfully declared an improper dividend or effected an unlawful
stock purchase or redemption, or obtained an improper personal benefit.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act") may be permitted to directors,
officers and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
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<PAGE> 72
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT
<TABLE>
<S> <C>
4.1 Indenture of Trenwick Group Inc. relating to the Junior Subordinated Debentures
4.2 Form of Certificate of Exchange Junior Subordinated Debenture (included as
Exhibit A to Exhibit 4.1)
4.3 Certificate of Trust of Trenwick Capital Trust I
4.4 Declaration of Trust of Trenwick Capital Trust I
4.5 Amended and Restated Declaration of Trust for Trenwick Capital Trust I
4.6 Form of Exchange Capital Security Certificate for Trenwick Capital Trust I
(included as Exhibit D to Exhibit 4.5)
4.7 Form of Trenwick Group Inc. Exchange Capital Securities Guarantee Agreement
4.8 Registration Rights Agreement
5.1 Opinion of Baker & McKenzie to Trenwick Group Inc. as to legality of the
Exchange Junior Subordinated Debentures and the Exchange Guarantee to be issued
by Trenwick Group Inc.
5.2 Opinion of Potter Anderson & Corroon, special Delaware counsel, as to legality
of the Exchange Capital Securities to be issued by Trenwick Capital Trust I
8 Opinion of Baker & McKenzie, special tax counsel, as to certain federal income
tax matters
12.1 Computation of ratios of earnings to fixed charges
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Baker & McKenzie (included in Exhibit 5.1)
23.3 Consent of Potter Anderson & Corroon (included in Exhibit 5.2)
23.4 Consent of Baker & McKenzie (included in Exhibit 8)
24 Power of Attorney of certain directors of Trenwick Group Inc.
25.1 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee
under the Indenture
25.2 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee
under the Amended and Restated Declaration of Trust of Trenwick Capital Trust I
25.3 Form T-1 Statement of Eligibility of The Chase Manhattan Bank under the Exchange
Guarantee for the benefit of the holders of Exchange Capital Securities of
Trenwick Capital Trust I
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Exchange Agent Agreement
</TABLE>
ITEM 22. UNDERTAKINGS
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effetive amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
II-2
<PAGE> 73
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, as amended (the
"Securities Act"), each filing of Trenwick Group Inc.'s annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as
amended ("Exchange Act") (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions, or otherwise, the registrants have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of expenses
incurred or paid by a director, officer of controlling person of the registrants
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of its counsel the
matter has been settled by the controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
The undersigned registrants hereby undertake to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
The undersigned registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired or involved therein, that was not the subject of and
included in the registration statement when it became effective.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), Trenwick Group Inc. certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form S-4 and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Stamford and State of
Connecticut, on the 6th day of June, 1997.
TRENWICK GROUP INC.
By: /s/ JAMES F. BILLETT, JR.
------------------------------------
James F. Billett, Jr.
Chairman, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ----------------------------------- --------------
<S> <C> <C>
/s/ JAMES F. BILLETT, JR. Chairman, President, Director and June 6, 1997
- ------------------------------------------ Chief Executive Officer
James F. Billett, Jr.
/s/ ALAN L. HUNTE Executive Vice President, June 6, 1997
- ------------------------------------------ Chief Financial Officer,
Alan L. Hunte Director and Treasurer
* Director June 6, 1997
- ------------------------------------------
W. Marston Becker
* Director June 6, 1997
- ------------------------------------------
Anthony S. Brown
* Director June 6, 1997
- ------------------------------------------
Neil Dunn
* Director June 6, 1997
- ------------------------------------------
P. Anthony Jacobs
* Director June 6, 1997
- ------------------------------------------
Herbert Palmberger
* Director June 6, 1997
- ------------------------------------------
Joseph D. Sargent
* Director June 6, 1997
- ------------------------------------------
Frederick D. Watkins
* Director June 6, 1997
- ------------------------------------------
Stephen R. Wilcox
*By: /s/ JAMES F. BILLETT, JR.
- ------------------------------------------
James F. Billett, Jr.
Attorney-in-fact
</TABLE>
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Pursuant to the requirements of the Securities Act Trenwick Capital Trust I
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Stamford, and State of Connecticut, on the 6th day of
June, 1997.
TRENWICK CAPITAL TRUST I
By: /s/ JAMES F. BILLETT, JR.
------------------------------------
James F. Billett, Jr.
By: /s/ ALAN L. HUNTE
------------------------------------
Alan L. Hunte
By: /s/ JANE T. WIZNITZER
------------------------------------
Jane T. Wiznitzer
II-5
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
-------- ------------------------------------------------------------------
<C> <S>
4.1 Indenture of Trenwick Group Inc. relating to the Junior
Subordinated Debentures
4.2 Form of Certificate of Exchange Junior Subordinated Debenture
(included as Exhibit A to Exhibit 4.1)
4.3 Certificate of Trust of Trenwick Capital Trust I
4.4 Declaration of Trust of Trenwick Capital Trust I
4.5 Amended and Restated Declaration of Trust for Trenwick Capital
Trust I
4.6 Form of Exchange Capital Security Certificate for Trenwick Capital
Trust I (included as Exhibit D to Exhibit 4.5)
4.7 Form of Exchange Capital Securities Guarantee Agreement of
Trenwick Group Inc.
4.8 Registration Rights Agreement
5.1 Opinion of Baker & McKenzie to Trenwick Group Inc. as to legality
of the Exchange Junior Subordinated Debentures and the Exchange
Guarantee to be issued by Trenwick Group Inc.
5.2 Opinion of Potter Anderson & Corroon, special Delaware counsel, as
to legality of the Exchange Capital Securities to be issued by
Trenwick Capital Trust I
8 Opinion of Baker & McKenzie, special tax counsel, as to certain
federal income tax matters
12.1 Computation of ratios of consolidated earnings to fixed charges
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Baker & McKenzie (included in Exhibit 5.1)
23.3 Consent of Potter Anderson & Corroon (included in Exhibit 5.2)
23.4 Consent of Baker & McKenzie (included in Exhibit 8)
24 Power of Attorney of certain directors of Trenwick Group Inc.
25.1 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to
act as trustee under the Indenture
25.2 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to
act as trustee under the Amended and Restated Declaration of Trust
of Trenwick Capital Trust I
25.3 Form T-1 Statement of Eligibility of The Chase Manhattan Bank
under the Exchange Guarantee for the benefit of the holders of
Exchange Capital Securities of Trenwick Capital Trust I
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Exchange Agent Agreement
</TABLE>
E-1
<PAGE> 1
Exhibit 4.1
================================================================================
-----------
INDENTURE
Dated as of January 31, 1997
between
TRENWICK GROUP INC.
and
THE CHASE MANHATTAN BANK,
as Trustee
-----------
$113,403,000
8.82% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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<S> <C>
ARTICLE I. DEFINITIONS................................................................... 1
SECTION 1.01. Definitions........................................................ 1
ARTICLE II. SECURITIES.................................................................... 11
SECTION 2.01. Forms Generally.................................................... 11
SECTION 2.02. Execution and Authentication....................................... 11
SECTION 2.03. Form and Payment................................................... 11
SECTION 2.04. Legends............................................................ 12
SECTION 2.05. Global Security.................................................... 12
SECTION 2.06. Interest........................................................... 13
SECTION 2.07. Transfer and Exchange.............................................. 14
SECTION 2.08. Replacement Securities............................................. 15
SECTION 2.09. Treasury Securities................................................ 16
SECTION 2.10. Temporary Securities............................................... 16
SECTION 2.11. Cancellation....................................................... 16
SECTION 2.12. Defaulted Interest................................................. 17
SECTION 2.13. CUSIP Numbers...................................................... 17
ARTICLE III. PARTICULAR COVENANTS OF THE COMPANY........................................... 18
SECTION 3.01. Payment of Principal, Premium and Interest......................... 18
SECTION 3.02. Offices for Notices and Payments, etc.............................. 18
SECTION 3.03. Appointments to Fill Vacancies in Trustee's Office................. 18
SECTION 3.04. Provision as to Paying Agent....................................... 19
SECTION 3.05. Certificate to Trustee............................................. 19
SECTION 3.06. Compliance with Consolidation Provisions........................... 20
SECTION 3.07. Limitation on Dividends............................................ 20
SECTION 3.08. Covenants as to Trenwick Capital Trust I........................... 21
SECTION 3.09. Payment of Expenses................................................ 21
SECTION 3.10. Payment Upon Resignation or Removal................................ 21
ARTICLE IV. SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE....................................................... 22
SECTION 4.01. Securityholders' Lists............................................. 22
SECTION 4.02. Preservation and Disclosure of Lists............................... 22
SECTION 4.03. Reports of the Company............................................. 23
SECTION 4.04. Reports by the Trustee............................................. 24
</TABLE>
i
<PAGE> 3
<TABLE>
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ARTICLE V. REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT........................................................... 24
SECTION 5.01. Events of Default.................................................. 24
SECTION 5.02. Payment of Securities on Default; Suit Therefor.................... 26
SECTION 5.03. Application of Moneys Collected by Trustee......................... 28
SECTION 5.04. Proceedings by Securityholders..................................... 28
SECTION 5.05. Proceedings by Trustee............................................. 29
SECTION 5.06. Remedies Cumulative and Continuing................................. 29
SECTION 5.07. Direction of Proceedings and Waiver
of Defaults by Majority of Securityholders......................... 30
SECTION 5.08. Notice of Defaults................................................. 30
SECTION 5.09. Undertaking to Pay Costs........................................... 31
SECTION 5.10 Waiver of Stay or Extension Laws................................... 31
SECTION 5.11 Delay or Omission Not Waiver....................................... 31
ARTICLE VI. CONCERNING THE TRUSTEE........................................................ 32
SECTION 6.01. Duties and Responsibilities of Trustee............................. 32
SECTION 6.02. Reliance on Documents, Opinions, etc............................... 33
SECTION 6.03. No Responsibility for Recitals, etc................................ 34
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents,
Transfer Agents or Registrar May Own Securities.................... 34
SECTION 6.05. Moneys to be Held in Trust......................................... 34
SECTION 6.06. Compensation and Expenses of Trustee............................... 35
SECTION 6.07. Officers' Certificate as Evidence.................................. 35
SECTION 6.08. Conflicting Interest of Trustee.................................... 36
SECTION 6.09. Eligibility of Trustee............................................. 36
SECTION 6.10. Resignation or Removal of Trustee.................................. 36
SECTION 6.11. Acceptance by Successor Trustee.................................... 37
SECTION 6.12. Succession by Merger, etc.......................................... 38
SECTION 6.13. Limitation on Rights of Trustee as a Creditor...................... 38
SECTION 6.14. Authenticating Agents.............................................. 38
ARTICLE VII. CONCERNING THE SECURITYHOLDERS................................................ 39
SECTION 7.01. Action by Securityholders.......................................... 39
SECTION 7.02. Proof of Execution by Securityholders.............................. 40
SECTION 7.03. Who Are Deemed Absolute Owners..................................... 40
SECTION 7.04. Securities Owned by Company Deemed Not
Outstanding........................................................ 40
SECTION 7.05. Revocation of Consents; Future Holders Bound....................... 41
ARTICLE VIII. SECURITYHOLDERS' MEETINGS..................................................... 41
SECTION 8.01. Purpose of Meetings................................................ 41
</TABLE>
ii
<PAGE> 4
<TABLE>
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<S> <C>
SECTION 8.02. Call of Meetings by Trustee........................................ 42
SECTION 8.03. Call of Meetings by Company or Securityholders..................... 42
SECTION 8.04. Qualifications for Voting.......................................... 42
SECTION 8.05. Regulations........................................................ 42
SECTION 8.06. Voting............................................................. 44
ARTICLE IX. AMENDMENTS.................................................................... 44
SECTION 9.01. Without Consent of Securityholders................................. 44
SECTION 9.02. With Consent of Securityholders.................................... 45
SECTION 9.03. Compliance with Trust Indenture Act of 1939; Effect of
Supplemental Indentures............................................ 46
SECTION 9.04. Notation on Securities............................................. 47
SECTION 9.05. Evidence of Compliance of
Supplemental Indenture to be Furnished to Trustee.................. 47
ARTICLE X. CONSOLIDATION, MERGER, SALE, CONVEYANCE AND
LEASE......................................................................... 47
SECTION 10.01. Company May Consolidate, etc., on Certain Terms.................... 47
SECTION 10.02. Successor Corporation to be Substituted for Company................ 48
SECTION 10.03. Opinion of Counsel to be Given Trustee............................. 48
ARTICLE XI. SATISFACTION AND DISCHARGE OF INDENTURE....................................... 48
SECTION 11.01. Discharge of Indenture............................................. 48
SECTION 11.02. Deposited Moneys and U.S. Government
Obligations to be Held in Trust by Trustee......................... 49
SECTION 11.03. Paying Agent to Repay Moneys Held.................................. 49
SECTION 11.04. Return of Unclaimed Moneys......................................... 49
SECTION 11.05. Defeasance Upon Deposit of Moneys or U.S.
Government Obligations............................................. 50
SECTION 11.06. Reinstatement...................................................... 51
ARTICLE XII. IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS........................................................ 51
SECTION 12.01. Indenture and Securities Solely Corporate Obligations.............. 51
ARTICLE XIII. MISCELLANEOUS PROVISIONS...................................................... 52
SECTION 13.01. Successors......................................................... 52
SECTION 13.02. Official Acts by Successor Corporation............................. 52
SECTION 13.03. Surrender of Company Powers........................................ 52
SECTION 13.04. Address for Notices, etc........................................... 52
SECTION 13.05. Governing Law...................................................... 52
</TABLE>
iii
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<TABLE>
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SECTION 13.06. Evidence of Compliance with Conditions Precedent................... 52
SECTION 13.07. Business Days...................................................... 53
SECTION 13.08. Trust Indenture Act of 1939 to Control............................. 53
SECTION 13.09. Table of Contents, Headings, etc................................... 53
SECTION 13.10. Execution in Counterparts.......................................... 53
SECTION 13.11. Separability....................................................... 53
SECTION 13.12. Assignment......................................................... 54
SECTION 13.13. Acknowledgment of Rights........................................... 54
ARTICLE XIV. CONDITIONAL RIGHT TO SHORTEN MATURITY;
PREPAYMENT OF SECURITIES -- NO SINKING FUND................................... 54
SECTION 14.01. Special Event Prepayment........................................... 54
SECTION 14.02. Optional Prepayment by Company..................................... 55
SECTION 14.03. No Sinking Fund.................................................... 55
SECTION 14.04. Notice of Prepayment; Selection of Securities...................... 55
SECTION 14.05. Payment of Securities Called for Prepayment........................ 56
SECTION 14.06. Conditional Right to Shorten Maturity.............................. 56
ARTICLE XV. SUBORDINATION OF SECURITIES................................................... 57
SECTION 15.01. Agreement to Subordinate........................................... 57
SECTION 15.02. Default on Senior Indebtedness..................................... 57
SECTION 15.03. Liquidation; Dissolution; Bankruptcy............................... 58
SECTION 15.04. Subrogation........................................................ 59
SECTION 15.05. Trustee to Effectuate Subordination................................ 59
SECTION 15.06. Notice by the Company.............................................. 59
SECTION 15.07. Rights of the Trustee; Holders of Senior Indebtedness.............. 61
SECTION 15.08. Subordination May Not Be Impaired.................................. 61
ARTICLE XVI. EXTENSION OF INTEREST PAYMENT PERIOD.......................................... 62
SECTION 16.01. Extension of Interest Payment Period............................... 62
SECTION 16.02. Notice of Extension................................................ 63
EXHIBIT A Form of Security; Trustee's Certificate of Authentication A-1
</TABLE>
iv
<PAGE> 6
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
SECTION OF
TRUST INDENTURE ACT
OF 1939, AS AMENDED INDENTURE SECTION
- ------------------- -----------------
<S> <C>
310(a)(1) ....................... 6.09
(a)(2) ....................... 6.09
310(a)(3) ....................... N/A
(a)(4) ....................... N/A
310(a)(5) ....................... N/A
310(b) ....................... 6.10, 6.11
310(c) ....................... N/A
311(a) and (b) ....................... 6.13
311(c) ....................... N/A
312(a) ....................... 4.01, 4.02(a)
312(b) and (c) ....................... 4.02
313(a) ....................... 4.04
313(b)(1) ....................... 4.04
313(b)(2) ....................... 4.04
313(c) ....................... 4.04
313(d) ....................... 4.04
314(a) ....................... 4.03
314(b) ....................... N/A
314(c)(1) and (2) ....................... 6.07
314(c)(3) ....................... N/A
314(d) ....................... N/A
314(e) ....................... 6.07
314(f) ....................... N/A
315(a)(c) and (d) ....................... 6.01
315(b) ....................... 5.08
315(e) ....................... 5.09
316(a)(1) ....................... 5.07
316(a)(2) ....................... N/A
316(a) last sentence ....................... 2.09
316(b) ....................... 9.02
317(a) ....................... 5.05
317(b) ....................... 6.05
318(a) ....................... 13.08
</TABLE>
- ------------------
* This Cross-Reference Table does not constitute part of the Indenture as
executed and shall not affect the interpretation of any of its terms or
provisions.
v
<PAGE> 7
THIS INDENTURE, dated as of January 31, 1997, between Trenwick
Group Inc., a corporation existing under the laws of the State of Delaware
(hereinafter sometimes called the "Company"), and The Chase Manhattan Bank, a
New York banking corporation, as trustee (hereinafter sometimes called the
"Trustee").
W I T N E S S E T H :
In consideration of the premises, and the purchase of the
Securities (as defined herein) by the holders thereof, the Company covenants and
agrees with the Trustee for the equal and proportionate benefit of the
respective holders from time to time of the Securities, as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. Definitions.
The terms defined in this Section 1.01 (except as herein
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture shall have the respective meanings specified in this
Section 1.01. All other terms used in this Indenture which are defined in the
Trust Indenture Act of 1939 (as defined below) or which are by reference therein
defined in the Securities Act (as defined below), shall (except as herein
otherwise expressly provided or unless the context otherwise requires) have the
meanings assigned to such terms in the Trust Indenture Act of 1939 and in the
Securities Act as in force at the date of this Indenture as originally executed.
The following terms have the meanings given to them in the Declaration: (i)
Clearing Agency; (ii) Delaware Trustee; (iii) Property Trustee; (iv)
Administrative Trustees; (v) Direct Action; (vi) Purchase Agreement and (vii)
Initial Purchaser. All accounting terms used herein and not expressly defined
shall have the meanings assigned to such terms in accordance with generally
accepted accounting principles and the term "generally accepted accounting
principles" means such accounting principles as are generally accepted at the
time of any computation. The words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision. Headings are used for
convenience of reference only and do not affect interpretation. The singular
includes the plural and vice versa.
"Additional Interest" shall have the meaning set forth in the
Registration Rights Agreement.
"Additional Sums" shall have the meaning set forth in Section
2.06(c).
"Adjusted Treasury Rate" shall mean, with respect to any
prepayment date pursuant to Section 14.01, the rate per annum equal to the
semi-annual equivalent yield to maturity of the Comparable Treasury
<PAGE> 8
Issue, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such prepayment date plus (i) 1.25% if such prepayment date occurs on or prior
to February 1, 1998 and (ii) 0.50% in all other cases.
"Adverse Tax Consequence" shall have the meaning set forth in
the definition of Tax Event.
"Affiliate" shall have the same meaning as given to that term
in Rule 405 under the Securities Act or any successor rule thereunder.
"Authenticating Agent" shall mean any agent or agents of the
Trustee which at the time shall be appointed and acting pursuant to Section
6.14.
"Bankruptcy Law" shall mean Title 11, U.S. Code, or any
similar federal or state law for the relief of debtors.
"Board of Directors" shall mean either the Board of Directors
of the Company or any duly authorized committee of the Board of Directors.
"Board Resolution" shall mean a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the date
of such certification, and delivered to the Trustee.
"Business Day" shall mean, with respect to any series of
Securities, any day other than a Saturday or a Sunday or a day on which banking
institutions in The City of New York, New York are authorized or required by law
or executive order to close.
"Capital Securities" shall mean Subordinated Capital Income
Securities representing undivided beneficial interests in the assets of Trenwick
Capital Trust I which rank pari passu with the Common Securities issued by
Trenwick Capital Trust I; provided, however, that if an Event of Default has
occurred and is continuing, no payments in respect of Distributions on, or
payments upon liquidation, prepayment or otherwise with respect to, the Common
Securities shall be made until the holders of the Capital Securities shall be
paid in full the Distributions and the liquidation, prepayment and other
payments to which they are entitled. References to "Capital Securities" shall
include collectively any Initial Capital Securities and Exchange Capital
Securities.
"Capital Securities Guarantee" shall mean any guarantee that
the Company may enter into with Trenwick Capital Trust I or other Persons, as
such guarantee may be modified, amended or supplemented from time to time, that
operates directly or indirectly for the benefit of holders of Capital Securities
of Trenwick Capital Trust I and shall include an Initial Capital Securities
Guarantee and an Exchange Capital Securities Guarantee with respect to the
Initial Capital Securities and the Exchange Capital Securities, respectively.
"Commission" shall mean the Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act, or
if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
2
<PAGE> 9
"Common Securities" shall mean undivided beneficial interests
in the assets of Trenwick Capital Trust I which rank pari passu with Capital
Securities issued by Trenwick Capital Trust I; provided, however, that if an
Event of Default has occurred and is continuing, no payments in respect of
Distributions on, or payments upon liquidation, prepayment or otherwise with
respect to, the Common Securities shall be made until the holders of the Capital
Securities shall be paid in full the Distributions and the liquidation,
prepayment and other payments to which they are entitled.
"Common Securities Guarantee" shall mean any guarantee that
the Company may enter into with any Person or Persons that operates directly or
indirectly for the benefit of holders of Common Securities, as such guarantee
may be modified, amended or supplemented from time to time.
"Common Stock" shall mean the Common Stock, par value $0.10
per share, of the Company or any other class of stock resulting from changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value.
"Company" shall mean Trenwick Group Inc., a Delaware
corporation, and, subject to the provisions of Article X, shall include its
successors and assigns.
"Company Request" or "Company Order" shall mean a written
request or order signed in the name of the Company by the Chairman, a Vice
Chairman, the Chief Executive Officer, the President, a Vice President (however
designated), the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Comparable Treasury Issue" shall mean the United States
Treasury security selected by the Quotation Agent as having a maturity
comparable to the Remaining Life that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life.
"Comparable Treasury Price" shall mean, with respect to any
prepayment date pursuant to Section 14.01, (i) the average of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) on the third Business Day preceding such prepayment
date, as set forth in the daily statistical release (or any successor release)
published by the Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
Business Day, (A) the average of the Reference Treasury Dealer Quotations for
such prepayment date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such Quotations.
"Compounded Interest" shall have the meaning set forth in
Section 16.01.
"Conditional Tax Redemption Event" shall have the meaning set
forth in Section 14.06.
3
<PAGE> 10
"Custodian" shall mean any receiver, trustee, assignee,
liquidator, or similar official under any Bankruptcy Law.
"Declaration" shall mean the Amended and Restated Declaration
of Trust of Trenwick Capital Trust I, dated as of January 31, 1997, among the
Trustees (as defined therein) and the Company, as Sponsor, as such Declaration
may be modified, amended or supplemented from time to time.
"Default" shall mean any event, act or condition that with
notice or lapse of time, or both, would constitute an Event of Default.
"Deferred Interest" shall have the meaning set forth in
Section 16.01.
"Definitive Securities" shall mean those Securities issued in
fully registered certificated form but not Securities issued in global form.
"Depositary" shall mean, with respect to Securities of any
series, for which the Company shall determine that such Securities will be
issued as a Global Security, The Depository Trust Company, New York, New York,
another clearing agency, or any successor registered as a clearing agency under
the Exchange Act or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to Section 2.05(d).
"Dissolution Event" shall mean the liquidation of the Trust
pursuant to the Declaration, and the distribution of the Securities held by the
Property Trustee to the holders of the Trust Securities issued by the Trust pro
rata in accordance with the Declaration.
"Event of Default" shall mean any event specified in Section
5.01, continued for the period of time, if any, and after the giving of the
notice, if any, therein designated.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Capital Securities" shall mean 8.82% Capital
Securities (liquidation amount $1,000 per security) of Trenwick Capital Trust I,
issued pursuant to an Exchange Offer (including any Private Exchange (as defined
in the Registration Rights Agreement)).
"Exchange Capital Securities Guarantee" shall mean the Capital
Securities Guarantee Agreement, issued pursuant to an Exchange Offer (including
any Private Exchange (as defined in the Registration Rights Agreement)).
"Exchange Offer" shall mean the offer that may be made
pursuant to the Registration Rights Agreement (i) by the Company to exchange
Exchange Securities for Initial Securities and to exchange an Exchange Capital
Securities Guarantee for an Initial Capital Securities Guarantee and (ii) by
Trenwick Capital Trust I to exchange Exchange Capital Securities for Initial
Capital Securities.
"Exchange Securities" shall mean the Company's 8.82% Junior
Subordinated Deferrable Interest Debentures due February 1, 2037, issued
pursuant to an Exchange Offer
4
<PAGE> 11
(including any Private Exchange (as defined in the Registration Rights
Agreement)), as authenticated and issued under this Indenture.
"Extension Period" shall have the meaning set forth in Section
16.01.
"Global Securities" shall mean those Securities issued in
global form, and "Global Security" shall mean the Security executed by the
Company and delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with the Indenture, which shall be
registered in the name of the Depositary or its nominee.
"Indebtedness for Money Borrowed" shall mean any obligation
of, or any obligation guaranteed by, the Company for the repayment of borrowed
money, whether or not evidenced by bonds, debentures, notes or other written
instruments.
"Indenture" shall mean this instrument as originally executed
or as it may from time to time be modified, amended or supplemented by one or
more indentures supplemental hereto entered into pursuant to the applicable
provision hereof including, for all purposes of this instrument and any
supplemental indenture, the provisions of the Trust Indenture Act of 1939 that
are deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively.
"Initial Capital Securities" shall mean 8.82% Subordinated
Capital Income Securities (liquidation amount $1,000 per security) of Trenwick
Capital Trust, as initially issued under the Declaration.
"Initial Capital Securities Guarantee" shall mean the Capital
Securities Guarantee Agreement, dated as of January 31, 1997, between the
Company and The Chase Manhattan Bank, as guarantee trustee.
"Initial Securities" shall mean the Company's 8.82% Junior
Subordinated Deferrable Interest Debentures due February 1, 2037, as initially
authenticated and issued under this Indenture.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended.
"Investment Company Event" shall mean that the Company shall
have received an opinion of an independent counsel experienced in practice under
the Investment Company Act, to the effect that, as a result of the occurrence of
a change in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in Investment Company Act Law"), there is more
than an insubstantial risk that Trenwick Capital Trust I is or will be
considered an "investment company" which is required to be registered under the
Investment Company Act, which Change in Investment Company Act Law becomes
effective on or after January 31, 1997.
"Interest Payment Date" shall have the meaning set forth in
Section 2.06.
5
<PAGE> 12
"Non Book-Entry Capital Securities" shall have the meaning set
forth in Section 2.05.
"Officers" shall mean any of the Chairman, a Vice Chairman,
the Chief Executive Officer, the President, a Vice President (however
designated), the Secretary or an Assistant Secretary of the Company.
"Officers' Certificate" shall mean a certificate signed by (i)
the Chairman of the Board of Directors, a Vice Chairman of the Board of
Directors, the President, the Chief Executive Officer or a Vice President, and
(ii) the Chief Financial Officer, the Chief Accounting Officer, the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, and delivered
to the Trustee, which certificate shall comply with the provisions of Section
13.06 hereof.
"Opinion of Counsel" shall mean a written opinion of legal
counsel who is reasonably acceptable to the Trustee, which opinion shall comply
with the provisions of Section 13.06 hereof.
"Optional Prepayment Price" shall have the meaning set forth
in Section 14.02.
"Other Debentures" shall mean only those junior subordinated
debentures issued by the Company from time to time and sold to trusts to be
established by the Company (if any), which are in each case similar to Trenwick
Capital Trust I.
"Other Guarantees" shall mean all guarantees to be issued by
the Company with respect to capital securities (if any) and issued to other
trusts, or to any trustee of such trusts or other entities affiliated with the
Company that are financing vehicles of the Company.
The term "outstanding" when used with reference to Securities,
shall, subject to the provisions of Section 7.04, mean, as of any particular
time, all Securities authenticated and delivered by the Trustee or the
Authenticating Agent under this Indenture, except
(a) Securities theretofore cancelled by the Trustee or the
Authenticating Agent or delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or
prepayment of which moneys in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent (other
than the Company) or shall have been set aside and segregated in trust
by the Company (if the Company shall act as its own paying agent);
provided, that, if such Securities, or portions thereof, are to be
prepaid prior to maturity thereof, notice of such prepayment shall have
been given as in Article XIV provided or provision satisfactory to the
Trustee shall have been made for giving such notice; and
(c) Securities in lieu of or in substitution for which other
Securities shall have been authenticated and delivered pursuant to the
terms of Section 2.08 unless proof satisfactory to the Company and the
Trustee is presented that any such Securities are held by bona fide
holders in due course.
6
<PAGE> 13
"Person" shall mean any individual, corporation, estate,
partnership, joint venture, association, joint-stock company, limited liability
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor Security" of any particular Security shall mean
every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this definition,
any Security authenticated and delivered under Section 2.08 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
"Prepayment Price" shall mean the Optional Prepayment Price or
the Special Event Prepayment Price, as the context requires.
The term "principal office of the Trustee", or other similar
term, shall mean the principal office of the Trustee, at which at any particular
time its corporate trust business shall be administered and which office is, at
the time of execution of this Indenture, located at 450 West 33rd Street, New
York, New York 10001.
"Property Trustee" shall have the same meaning as set forth in
the Declaration.
"Purchase Agreement" shall mean the Purchase Agreement dated
January 28, 1997 among the Company, Trenwick Capital Trust I and the Initial
Purchaser as defined therein.
"Quotation Agent" shall mean the Reference Treasury Dealer.
"Reference Treasury Dealer" shall mean (i) Lehman Brothers
Inc. and its successors; provided, however, that if the foregoing shall cease to
be a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer, or (ii) any other Primary Treasury Dealer selected by the
Trustee after consultation with the Company.
"Reference Treasury Dealer Quotations" shall mean, with
respect to each Quotation Agent and any prepayment date pursuant to Section
14.01, the average, as determined by the Trustee, of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted to the Trustee by such Quotation Agent at 5:00 p.m. New
York City time, on the third Business Day preceding such prepayment date.
"Registration Rights Agreement" shall mean the Registration
Rights Agreement, dated as of January 31, 1997, by and among the Company,
Trenwick Capital Trust I and the Initial Purchaser, as such agreement may be
amended, modified or supplemented from time to time.
"Regular Record Date" with respect to the payment of interest
installments on the Securities, shall mean the fifteenth day preceding the
relevant Interest Payment Date. If a Regular Record Date is not a Business Day,
such Regular Record Date shall be deemed to be the next preceding Business Day.
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"Remaining Life" shall mean the period from the prepayment
date pursuant to Section 14.01 to the Stated Maturity.
"Responsible Officer," when used with respect to the Trustee,
shall mean any officer or assistant officer of the Trustee assigned by the
Trustee to administer this Indenture and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Security" shall mean Securities that bear or are
required to bear the legends set forth in Exhibit A hereto.
"Rule 144A" shall mean Rule 144A under the Securities Act, as
such Rule may be amended from time to time, or under any similar rule or
regulation hereafter adopted by the Commission.
"Securities" shall mean, collectively, the Initial Securities
and the Exchange Securities.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Securityholder", "holder of Securities", or other similar
terms, shall mean any Person in whose name at the time a particular Security is
registered on the register kept by the Company or the Trustee for that purpose
in accordance with the terms hereof.
"Security Register" shall mean (i) prior to a Dissolution
Event, the list of holders kept by a Securities registrar or provided to the
Trustee pursuant to Section 4.01, as the case may be and (ii) following a
Dissolution Event, any security register maintained by a security registrar for
the securities appointed by the Company following the execution of a
supplemental indenture providing for transfer procedures as provided for in
Section 2.07(a).
"Senior Indebtedness" shall mean with respect to the Company,
(i) the principal, premium, if any, and interest in respect of (A) Indebtedness
for Money Borrowed and (B) indebtedness evidenced by securities, notes,
debentures, bonds or other similar instruments issued by the Company, (ii) all
capital lease obligations of the Company, (iii) all obligations of the Company
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of the Company and all obligations of the Company under any
conditional sale or title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business), (iv) all obligations,
contingent or otherwise of the Company in respect of any letter of credit,
banker's acceptance, security purchase facilities or similar credit transaction,
(v) all obligations in respect of interest rate swap, cap or other agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements, (vi) all obligations of
the type referred to in clauses (i) through (v) above of other persons for the
payment of which the Company is responsible or liable as obligor, guarantor or
otherwise and (vii) all obligations of the type referred to in clauses (i)
through (vi) above of other persons secured by any lien on any property or asset
of the Company (whether or not such obligation is assumed by the Company),
except for (1) any such indebtedness that is by its terms subordinated to or
pari passu with the Junior Subordinated Debentures and (2) any indebtedness
between or among the Company or its affiliates, including all other debt
securities and guarantees in respect of those debt securities issued to (a) any
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other trust affiliated with the Company and similar to Trenwick Capital Trust I
or a trustee of such trust and (b) any other trust, or of a trustee of such
trust, or of a partnership or other entity affiliated with the Company that is a
financing vehicle of the Company (a "financing entity") in connection with the
issuance by such a financing entity of preferred securities or other securities
that rank pari passu with, or junior to, the Capital Securities. Such Senior
Indebtedness shall continue to be Senior Indebtedness and be entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness.
"Special Event" shall mean either an Investment Company Event
or a Conditional Tax Redemption Event, as the case may be.
"Special Event Prepayment Price" shall mean, with respect to
any prepayment of the Securities pursuant to Section 14.01 hereof, an amount in
cash equal to the greater of (i) 100% of the principal amount to be prepaid or
(ii) the sum, as determined by a Quotation Agent, of the present values of the
remaining scheduled payments of principal and interest thereon to February 1,
2007, the first day on which any Security is subject to optional prepayment,
discounted to the prepayment date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months and, for any period less than 6 months,
the actual months elapsed and the actual days elapsed in a partial month in such
period) at the Adjusted Treasury Rate plus, in each case, accrued and unpaid
interest thereon, including Compounded Interest and Additional Interest, and
Additional Sums, if any, to the date of such prepayment.
"Stated Maturity" shall mean February 1, 2037, or such other
date to which the maturity of the Securities is changed pursuant to the right of
the Company to shorten the stated maturity pursuant to the provisions of Section
14.06.
"Subsidiary" shall mean with respect to any Person, (i) any
corporation at least a majority of the outstanding voting stock of which is
owned, directly or indirectly, by such Person or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries, (ii) any
general partnership, joint venture or similar entity, at least a majority of
whose outstanding partnership or similar interests shall at the time be owned by
such Person, or by one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries and (iii) any limited partnership of which such Person
or any of its Subsidiaries is a general partner. For the purposes of this
definition, "voting stock" means shares, interests, participations or other
equivalents in the equity interest (however designated) in such Person having
ordinary voting power for the election of a majority of the directors (or the
equivalent) of such Person, other than shares, interests, participations or
other equivalents having such power only by reason of the occurrence of a
contingency.
"Tax Event" shall mean the receipt by Trenwick Capital Trust I
and the Company of an opinion of counsel experienced in such matters to the
effect that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws or any regulations thereunder of the United
States or any political subdivision or taxing authority thereof or therein or as
a result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after January
31, 1997, or, as a result of a final determination, as evidenced by the
execution of a Form 870 AD, arising from an audit or examination by the Internal
Revenue Service, there is more than an insubstantial risk that (i) Trenwick
Capital Trust I is, or will be within 90 days of the date of
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such opinion, subject to United States federal income tax with respect to income
received or accrued on the Securities, (ii) interest payable by the Company on
the Securities is not, or within 90 days of the date of such opinion, will not
be, deductible by the Company, in whole or in part, for United States federal
income tax purposes, or (iii) Trenwick Capital Trust I is, or will be within 90
days of the date of such opinion, subject to more than a de minimis amount of
other taxes, duties or other governmental charges (each of the circumstances
referred to in clauses (i), (ii) and (iii) being referred to herein as an
"Adverse Tax Consequence").
"Tax Event Maturity Shortening" shall have the meaning
specified in Section 14.06.
"Trenwick Capital Trust I" or "Trust" shall mean Trenwick
Capital Trust I, a statutory business trust organized under the laws of the
State of Delaware for the exclusive purposes of (i) issuing and selling the
Trust Securities, (ii) effecting the Exchange Offer or filing a Shelf
Registration Statement (as defined in the Declaration), (iii) using the proceeds
from the sale of Trust Securities to acquire the Junior Subordinated Debentures,
(iv) making Distributions (as defined in the Declaration) to holders of the
Trust Securities as provided in the Declaration and (v) engaging in only those
other activities necessary, advisable or incidental thereto (such as registering
the transfer of the Trust Securities).
"Trustee" shall mean the Person identified as "Trustee" in the
first paragraph hereof, and, subject to the provisions of Article VI hereof,
shall also include its successors and assigns as Trustee hereunder. The term
"Trustee" as used with respect to a particular series of the Securities shall
mean the trustee with respect to that series.
"Trust Indenture Act of 1939" shall mean the Trust Indenture
Act of 1939 as in force at the date of execution of this Indenture, except as
provided in Section 9.03; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust Indenture Act of 1939"
means, to the extent required by any such amendment, the Trust Indenture Act of
1939 as so amended.
"Trust Securities" shall mean the Capital Securities and the
Common Securities, collectively.
"U.S. Government Obligations" shall mean securities that are
(i) direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (ii) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case
under clauses (i) or (ii) are not callable or prepayable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank or
trust company as custodian with respect to any such U.S. Government Obligation
or a specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a depository
receipt, provided, that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.
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ARTICLE II.
SECURITIES
SECTION 2.01. Forms Generally.
The Securities and the Trustee's certificate of authentication
shall be substantially in the form set forth in Exhibit A hereto, the terms of
which are incorporated in and made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject or usage. Each Security shall be
dated the date of its authentication. The Securities shall be issued in
denominations of $1,000 and integral multiples thereof.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities for the Company by
manual or facsimile signature. If an Officer whose signature is on a Security no
longer holds that office at the time the Security is authenticated, the Security
shall nevertheless be valid.
A Security shall not be valid until authenticated by the
manual signature of the Trustee. The signature of the Trustee shall be
conclusive evidence that the Security has been authenticated under this
Indenture. The form of Trustee's certificate of authentication to be borne by
the Securities shall be substantially as set forth in Exhibit A hereto.
The Trustee shall, upon receipt of a Company Order and such
other documents as may be required by Section 13.06, authenticate for original
issue up to, and the aggregate principal amount of Securities outstanding at any
time may not exceed, one hundred thirteen million four hundred three thousand
U.S. dollars ($113,403,000) aggregate principal amount of the Securities; except
as provided in Sections 2.07, 2.08, 2.10 and 14.05 hereof. The Company Order
shall specify the amount of Securities to be authenticated and the date on which
such Securities are to be authenticated. The series of Securities to be
initially issued hereunder shall be the Initial Securities.
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SECTION 2.03. Form and Payment.
Except as provided in Section 2.05, the Securities shall be
issued in fully registered certificated form without interest coupons. Principal
of and premium, if any, and interest on the Securities issued in certificated
form will be payable, the transfer of such Securities will be registrable and
such Securities will be exchangeable for Securities bearing identical terms and
provisions at the office or agency of the Company maintained for such purpose
under Section 3.02; provided, however, that payment of interest with respect to
Securities may be made at the option of the Company (i) by check mailed to the
holder at such address as shall appear in the Security Register or (ii) by
transfer to an account maintained by the Person entitled thereto, provided, that
proper transfer instructions have been received in writing by the relevant
record date. Notwithstanding the foregoing, so long as the holder of any
Securities is the Property Trustee, the payment of the principal of and premium,
if any, and interest (including Compounded Interest and Additional Interest, if
any) and any Additional Sums on such Securities held by the Property Trustee
will be made at such place and to such account as may be designated by the
Property Trustee.
SECTION 2.04. Legends.
(a) Except as permitted by subsection (b) of this Section 2.04
or as otherwise determined by the Company in accordance with applicable law,
each Security shall bear the applicable legends relating to restrictions on
transfer pursuant to the securities laws in substantially the form set forth on
Exhibit A hereto.
(b) The Company shall issue and, upon receipt of a Company
Order, the Trustee shall authenticate Exchange Securities in exchange for
Initial Securities accepted for exchange in the Exchange Offer, which Exchange
Securities shall not bear the legends required by subsection (a) above, in each
case unless the Trustee is notified in writing that the holder of such Initial
Securities is either (A) a broker-dealer who purchased such Initial Securities
directly from the Company for resale pursuant to Rule 144A or any other
available exemption under the Securities Act, (B) a Person participating in the
distribution of the Initial Securities or (C) a Person who is an affiliate (as
defined in Rule 144 under the Securities Act) of the Company or unless the
Registration Rights Agreement shall require otherwise.
SECTION 2.05. Global Security.
(a) In connection with a Dissolution Event,
(i) if any Capital Securities are held in book-entry
form, the global securities representing such Capital Securities shall
be presented to the Trustee (if an arrangement with the Depositary has
been maintained) by the Property Trustee in exchange for one or more
Global Securities (as may be required pursuant to Section 2.07) in an
aggregate principal amount equal to the aggregate principal amount of
all such outstanding Securities, to be registered in the name of the
Depositary, or its nominee, and delivered by the Trustee to the
Depositary for crediting to the accounts of its participants pursuant
to the instructions of the Administrative Trustees; the Company upon
any such presentation shall execute one or more Global Securities in
such aggregate principal amount and deliver the same, together with a
Company Order,
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to the Trustee for authentication and delivery in accordance with this
Indenture; and payments on the Securities issued as a Global Security
will be made to the Depositary; and
(ii) if any Capital Securities are held in
certificated form, the related Definitive Securities may be presented
to the Trustee by the Property Trustee and any Capital Security
certificate which represents Capital Securities other than Capital
Securities in book-entry form ("Non Book-Entry Capital Securities")
will be deemed to represent beneficial interests in Securities
presented to the Trustee by the Property Trustee having an aggregate
principal amount equal to the aggregate liquidation amount of the Non
Book-Entry Capital Securities until such Capital Security certificates
are presented to the Security registrar for registration of transfer or
reissuance, at which time such Capital Security certificates will be
cancelled and a Security, registered in the name of the holder of the
Capital Security certificate, with an aggregate principal amount equal
to the aggregate liquidation amount of the Capital Security certificate
cancelled, will be executed by the Company and delivered to the Trustee
for authentication and delivery in accordance with this Indenture. Upon
the issuance of such Securities, Securities with an equivalent
aggregate principal amount that were presented by the Property Trustee
to the Trustee will be deemed to have been cancelled.
(b) The Global Securities shall represent the aggregate amount
of outstanding Securities from time to time endorsed thereon; provided, that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges and
prepayments. Any endorsement of a Global Security to reflect the amount of any
increase or decrease in the amount of outstanding Securities represented thereby
shall be made by the Trustee, in accordance with applicable procedures
established by the Depositary.
(c) The Global Securities may be transferred, in whole but not
in part, only to another nominee of the Depositary, or to a successor Depositary
selected or approved by the Company or to a nominee of such successor
Depositary.
(d) If at any time the Depositary notifies the Company that it
is unwilling or unable to continue as Depositary or the Depositary has ceased to
be a clearing agency registered under the Exchange Act, and a successor
Depositary is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such condition, as the case may be, the
Company will execute, and the Trustee, upon written notice from the Company,
will authenticate and make available for delivery Definitive Securities, in
authorized denominations and in an aggregate principal amount equal to the
principal amount of the Global Security in exchange for such Global Security. If
there is an Event of Default, the Depositary shall have the right to exchange
the Global Securities for Definitive Securities. In addition, the Company may at
any time determine that the Securities shall no longer be represented by a
Global Security. In the event of such an Event of Default or such a
determination, the Company shall execute, and subject to Section 2.07, the
Trustee, upon receipt of an Officers' Certificate evidencing such determination
by the Company, will authenticate and make available for delivery Definitive
Securities, in authorized denominations and in an aggregate principal amount
equal to the principal amount of the Global Security in exchange for such Global
Security. Upon the exchange of the Global Security for such
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Definitive Securities, in authorized denominations, the Global Security shall be
cancelled by the Trustee. Such Definitive Securities issued in exchange for the
Global Security shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Definitive Securities to the Depositary for delivery to the
Persons in whose names such Definitive Securities are so registered.
SECTION 2.06. Interest.
(a) Each Security will bear interest at the rate of 8.82% per
annum (the "Coupon Rate") from the most recent date to which interest has been
paid or, if no interest has been paid, from January 31, 1997, until the
principal thereof becomes due and payable, and on any overdue principal and
premium, if any, and (to the extent that payment of such interest is enforceable
under applicable law) on any overdue installment of interest at the Coupon Rate,
compounded semi-annually, payable (subject to the provisions of Article XVI)
semi-annually in arrears on February 1 and August 1 of each year (each, an
"Interest Payment Date") commencing on August 1, 1997, to the Person in whose
name such Security or any predecessor Security is registered on the books of the
Company, at the close of business on the Regular Record Date for such interest
installment.
(b) Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period less than six months, the
actual months elapsed and the actual days elapsed in a partial month in such
period. In the event that any Interest Payment Date falls on a day that is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), with the same force and effect as if made
on such date.
(c) During such time as the Property Trustee is the holder of
any Securities, the Company shall pay any additional amounts on the Securities
as may be necessary in order that the amount of Distributions then due and
payable by Trenwick Capital Trust I on the outstanding Trust Securities shall
not be reduced as a result of any additional taxes, duties and other
governmental charges to which the Trust has become subject as a result of a Tax
Event ("Additional Sums").
SECTION 2.07. Transfer and Exchange.
(a) Transfer Restrictions. The Initial Securities, and those
Exchange Securities with respect to which any Person described in Section
2.04(b)(A), (B) or (C) is the beneficial owner, may not be transferred except in
compliance with any legend contained in Exhibit A unless otherwise determined by
the Company in accordance with applicable law. Upon any distribution of the
Securities following a Dissolution Event, the Company and the Trustee shall
enter into a supplemental indenture pursuant to Section 9.01 to provide for the
transfer restrictions and procedures with respect to the Securities
substantially similar to those contained in the Declaration to the extent
applicable in the circumstances existing at such time.
(b) General Provisions Relating to Transfers and Exchanges. To
permit registrations of transfers and exchanges, the Company shall execute
Definitive Securities and Global Securities at the Trustee's request. All
Definitive Securities and Global Securities
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issued upon any registration of transfer or exchange of Definitive Securities or
Global Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Definitive Securities or Global Securities surrendered upon such registration of
transfer or exchange.
No service charge shall be made to a holder for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith.
The Company shall not be required to (i) issue, register the
transfer of or exchange Securities during a period beginning at the opening of
business 30 days before the day of mailing of a notice of prepayment or any
notice of selection of Securities for prepayment under Article XIV hereof and
ending at the close of business on the day of such mailing; or (ii) register the
transfer of or exchange any Security so selected for prepayment in whole or in
part, except the unprepaid portion of any Security being prepaid in part.
Prior to due presentment for the registration of a transfer of
any Security, the Trustee, any agent and the Company may deem and treat the
Person in whose name any Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and premium, if
any, and interest on such Securities, and neither the Trustee, any agent nor the
Company shall be affected by notice to the contrary.
(c) Exchange of Initial Securities for Exchange Securities.
The Initial Securities may be exchanged for Exchange Securities pursuant to the
terms of the Exchange Offer. The Trustee shall make the exchange as follows:
The Company shall present the Trustee with an Officers' Certificate certifying
the following:
(i) upon issuance of the Exchange Securities, the
transactions contemplated by the Exchange Offer have been consummated;
and
(ii) the principal amount of Initial Securities
properly tendered in the Exchange Offer that are represented by a
Global Security and the principal amount of Initial Securities properly
tendered in the Exchange Offer that are represented by Definitive
Securities, the name of each holder of such Definitive Securities, the
principal amount at maturity properly tendered in the Exchange Offer by
each such holder and the name and address to which Definitive
Securities for Exchange Securities shall be registered and sent for
each such holder.
The Trustee, upon receipt of (i) such Officers' Certificate,
(ii) an Opinion of Counsel (x) to the effect that the Exchange Securities have
been registered under Section 5 of the Securities Act and the Indenture, the
Declaration and the Capital Securities Guarantee have each been qualified under
the Trust Indenture Act of 1939 and (y) with respect to the matters set forth in
Section 3(p) of the Registration Rights Agreement and (iii) a Company Order,
shall authenticate (A) a Global Security for Exchange Securities in aggregate
principal amount equal to the aggregate principal amount of Initial Securities
represented by a Global Security indicated in such Officers' Certificate as
having been properly tendered and (B) Definitive Securities representing
Exchange Securities registered in the names of, and in the principal amounts
indicated in, such Officers' Certificate.
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If the principal amount at Stated Maturity of the Global
Security for the Exchange Securities is less than the principal amount at Stated
Maturity of the Global Security for the Initial Securities, the Trustee shall
make an endorsement on such Global Security for the Initial Securities
indicating a reduction in the principal amount at maturity represented thereby.
The Trustee shall deliver such Definitive Securities for
Exchange Securities to the holders thereof as indicated in such Officers'
Certificate.
SECTION 2.08. Replacement Securities.
(a) If any mutilated Security is surrendered to the Trustee or
the Company, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's requirements
for replacements of Securities are met. An indemnity bond must be supplied by
the Securityholder that is sufficient in the judgment of the Trustee and the
Company to protect the Company, the Trustee or any authenticating agent from any
loss that any of them may suffer if a Security is replaced. The Company or the
Trustee may charge for its expenses in replacing a Security.
(b) Every replacement Security is an obligation of the Company
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder.
(c) The provisions of this Section 2.08 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with respect
to the replacement of mutilated, destroyed, lost or stolen Securities.
SECTION 2.09. Treasury Securities.
In determining whether the holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company or any Affiliate of the Company shall be
considered as though not outstanding, except that for purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities that the Trustee actually knows to be so owned shall
be so considered.
SECTION 2.10. Temporary Securities.
Pending the preparation of Definitive Securities, the Company
may execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise reproduced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.
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If temporary Securities are issued, the Company shall cause
Definitive Securities to be prepared without unreasonable delay. The Definitive
Securities shall be printed, typewritten, lithographed or engraved, or provided
by any combination thereof, or in any other manner permitted by the rules and
regulations of any applicable securities exchange, all as determined by the
Officers executing such Definitive Securities. After the preparation of
Definitive Securities, the temporary Securities shall be exchangeable for
Definitive Securities upon surrender of the temporary Securities at the office
or agency maintained by the Company for such purpose pursuant to Section 3.02
hereof, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, in exchange therefor the same
aggregate principal amount of Definitive Securities of authorized denominations.
Until so exchanged, the temporary Securities shall in all respects be entitled
to the same benefits under this Indenture as Definitive Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall destroy the cancelled Securities in accordance with its
normal practices (subject to the record retention requirement of the Exchange
Act) unless the Company directs that such cancelled Securities be returned to
it. The Company may not issue new Securities to replace Securities that have
been prepaid or paid or that have been delivered to the Trustee for
cancellation.
SECTION 2.12. Defaulted Interest.
Any interest on any Security that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the holder
on the relevant Regular Record Date by virtue of having been such holder; and
such Defaulted Interest shall be paid by the Company, at its election, as
provided in clause (a) or clause (b) below:
(a) The Company may make payment of any Defaulted Interest on
Securities to the Persons in whose names such Securities (or their
respective Predecessor Securities) are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner: the Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each such Security and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a special record date
for the payment of such Defaulted Interest which shall not be more than
30 nor less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company of
such special record date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and
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the special record date therefor to be mailed, first class postage
prepaid, to each Securityholder at his or her address as it appears in
the Security Register, not less than 10 days prior to such special
record date. Notice of the proposed payment of such Defaulted Interest
and the special record date therefor having been mailed as aforesaid,
such Defaulted Interest shall be paid to the Persons in whose names
such Securities (or their respective Predecessor Securities) are
registered on such special record date and shall be no longer payable
pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest on
any Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
SECTION 2.13. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of prepayment as a convenience to Securityholders; provided, that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of a prepayment and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such prepayment shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
ARTICLE III.
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of the
Securityholders that it will duly and punctually pay or cause to be paid the
principal of and premium, if any, and interest on the Securities at the place,
at the respective times and in the manner provided herein. Except as provided in
Section 2.03, each installment of interest on the Securities may be paid by
mailing checks for such interest payable to the order of the Securityholder
entitled thereto, as it may appear in the Securities register. The Company
further covenants to pay any and all amounts including, without limitation,
Additional Interest, if any, on the dates and in the manner required under the
Registration Rights Agreement.
SECTION 3.02. Offices for Notices and Payments, etc.
So long as any of the Securities remains outstanding, the
Company will maintain in The City of New York, New York, an office or agency
where the Securities may be presented for payment, an office or agency where the
Securities may be presented for registration of transfer and for exchange as in
this Indenture provided and an office or agency where notices and demands to or
upon the Company in respect of the Securities or of this
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Indenture may be served. The Company will give to the Trustee written notice of
the location of any such office or agency and of any change of location thereof.
Until otherwise designated from time to time by the Company in a notice to the
Trustee, any such office or agency for all of the above purposes shall be the
office or agency of The Chase Manhattan Bank, 450 West 33rd Street, 15th Floor,
New York, New York, 10001, Attention: Global Trust Services. In case the Company
shall fail to maintain any such office or agency in The City of New York, New
York, or shall fail to give such notice of the location or of any change in the
location thereof, presentations and demands may be made and notices may be
served at the principal corporate trust office of the Trustee.
In addition to any such office or agency, the Company may from
time to time designate one or more offices or agencies outside The City of New
York, New York where the Securities may be presented for registration of
transfer and for exchange in the manner provided in this Indenture, and the
Company may from time to time rescind such designation, as the Company may deem
desirable or expedient; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
any such office or agency in the City of New York, New York, for the purposes
above mentioned. The Company will give to the Trustee prompt written notice of
any such designation or rescission thereof.
SECTION 3.03. Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in
the office of Trustee, will appoint, in the manner provided in Section 6.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 3.04. Provision as to Paying Agent.
(a) If the Company shall appoint a paying agent other than the
Trustee with respect to the Securities, it will cause such paying agent to
execute and deliver to the Trustee an instrument in which such agent shall agree
with the Trustee, subject to the provision of this Section 3.04,
(i) that it will hold all sums held by it as such
agent for the payment of the principal of and premium, if any, or
interest on the Securities (whether such sums have been paid to it by
the Company or by any other obligor on the Securities) in trust for the
benefit of the holders of the Securities;
(ii) that it will give the Trustee notice of any
failure by the Company (or by any other obligor on the Securities) to
make any payment of the principal of and premium or interest on the
Securities when the same shall be due and payable; and
(iii) that it will at any time during the continuance
of any Event of Default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by it as such
paying agent.
(b) If the Company shall act as its own paying agent, it will,
on or before each due date of the principal of and premium, if any, or interest
on the Securities, set aside, segregate and hold in trust for the benefit of the
holders of the Securities a sum sufficient to
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pay such principal, premium or interest so becoming due and will notify the
Trustee of any failure to take such action and of any failure by the Company (or
by any other obligor under the Securities) to make any payment of the principal
of and premium, if any, or interest on the Securities when the same shall become
due and payable.
(c) Anything in this Section 3.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge with respect to the Securities hereunder, or for any
other reason, pay or cause to be paid to the Trustee all sums held in trust for
any such Securities by the Trustee or any paying agent hereunder, as required by
this Section 3.04, such sums to be held by the Trustee upon the trusts herein
contained.
(d) Anything in this Section 3.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
3.04 is subject to Sections 11.03 and 11.04.
SECTION 3.05. Certificate to Trustee.
The Company will deliver to the Trustee on or before 120 days
after the end of each fiscal year in each year, commencing with the first fiscal
year ending after the date hereof, so long as Securities are outstanding
hereunder, an Officers' Certificate, one of the signers of which shall be the
principal executive, principal financial or principal accounting officer of the
Company, stating that in the course of the performance by the signers of their
duties as officers of the Company they would normally have knowledge of any
Default by the Company in the performance of any covenants contained herein,
stating whether or not they have knowledge of any such Default and, if so,
specifying each such Default of which the signers have knowledge and the nature
thereof.
SECTION 3.06. Compliance with Consolidation Provisions.
The Company will not, while any of the Securities remains
outstanding, consolidate with, or merge into, or merge into itself, or sell or
convey all or substantially all of its property to any other Person unless the
provisions of Article X hereof are complied with.
SECTION 3.07. Limitation on Dividends.
If at any time (i) there shall have occurred any event of
which the Company has actual knowledge that (a) is or with the giving of notice
or the lapse of time, or both, would constitute an Event of Default and (b)
which the Company shall not have taken reasonable steps to cure, (ii) Securities
are held by the Property Trustee and the Company shall be in default with
respect to its payment of any obligations under the Capital Securities
Guarantee, or (iii) the Company shall have given notice of its election of the
exercise of its right to extend the interest payment period pursuant to Section
16.01 and any such extension shall be continuing, then the Company will not, and
will not permit any Subsidiary to,
(i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect
to, any of the Company's capital stock (which includes common and
preferred stock);
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(ii) make any payment of principal, interest or premium, if
any, on or repay or repurchase or prepay any debt securities of the
Company (including any Other Debentures) that rank pari passu with or
junior in right of payment to the Securities; or
(iii) make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any Subsidiary of
the Company (including Other Guarantees) if such guarantee ranks pari
passu with or junior in right of payment to the Securities
other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, Common Stock of the Company, (b)
any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the prepayment or repurchase of any such rights pursuant thereto, (c)
payments under the Capital Securities Guarantee, (d) as a direct result of, and
only to the extent necessary to avoid the issuance of fractional shares of the
Company's capital stock following, a reclassification of the Company's capital
stock or the exchange or the conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock, (e)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, and (f) purchases of Common Stock related
to the issuance of Common Stock or rights under any of the Company's benefit
plans for its directors, officers or employees or any of the Company's dividend
reinvestment plans.
SECTION 3.08. Covenants as to Trenwick Capital Trust I.
In the event Securities are issued to Trenwick Capital Trust I
or a trustee of such trust in connection with the issuance of Trust Securities
by Trenwick Capital Trust I, for so long as any of such Trust Securities remains
outstanding, the Company will (i) directly or indirectly maintain 100% ownership
of the Common Securities of Trenwick Capital Trust I; provided, however, that
any successor of the Company, permitted pursuant to Article X, may succeed to
the Company's ownership of such Common Securities, (ii) use its reasonable
efforts to cause Trenwick Capital Trust I (a) to remain a business trust, except
in connection with a distribution of Securities, the redemption of all of the
Trust Securities of Trenwick Capital Trust I or certain mergers, consolidations
or amalgamations, each as permitted by the Declaration, and (b) to continue to
be treated as a grantor trust and not as an association taxable as a corporation
for United States federal income tax purposes, and (iii) use its reasonable
efforts to cause each holder of Trust Securities to be treated as owning an
individual beneficial interest in the Securities.
SECTION 3.09. Payment of Expenses.
In connection with the offering, sale and issuance of the
Securities to Trenwick Capital Trust I and in connection with the sale of the
Trust Securities by Trenwick Capital Trust I, the Company, in its capacity as
borrower with respect to the Securities, shall:
(a) pay all costs and expenses relating to the offering, sale
and issuance of the Securities, including commissions to the Initial
Purchaser payable pursuant to the Purchase Agreement, fees and expenses
in connection with the Exchange Offer or other
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action to be taken pursuant to the Registration Rights Agreement and
compensation of the Trustee in accordance with the provisions of
Section 6.06;
(b) pay all costs and expenses of Trenwick Capital Trust I
(including, but not limited to, costs and expenses relating to the
organization of Trenwick Capital Trust I, the offering, sale and
issuance of the Trust Securities (including commissions to the Initial
Purchaser in connection therewith), the fees and expenses of the
Property Trustee and the Delaware Trustee, the costs and expenses
relating to the operation of Trenwick Capital Trust I;
(c) be primarily and fully liable for any indemnification
obligations arising with respect to the Declaration;
(d) pay any and all taxes (other than United States
withholding taxes attributable to Trenwick Capital Trust I or its
assets) and all liabilities, costs and expenses with respect to such
taxes of Trenwick Capital Trust I; and
(e) pay all other fees, expenses, debts and obligations (other
than payments of principal of, and premium, if any, or interest on the
Trust Securities) related to Trenwick Capital Trust I.
SECTION 3.10. Payment Upon Resignation or Removal.
Upon termination of this Indenture or the removal or
resignation of the Trustee, unless otherwise stated, the Company shall pay to
the Trustee all amounts accrued and owing to the date of such termination,
removal or resignation. Upon termination of the Declaration or the removal or
resignation of the Delaware Trustee or the Property Trustee, as the case may be,
pursuant to Section 5.7 of the Declaration, the Company shall pay to the
Delaware Trustee or the Property Trustee, as the case may be, all amounts
accrued and owing to the date of such termination, removal or resignation.
ARTICLE IV.
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists.
The Company covenants and agrees that it will furnish or cause
to be furnished to the Trustee:
(a) on a semi-annual basis on each Regular Record Date for the
Securities, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Securityholders as of such record
date;
(b) at such other times as the Trustee may request in writing,
within 30 Business Days after the receipt by the Company of any such
request, a list of similar
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form and content as of a date not more than 15 Business Days prior to
the time such list is furnished,
except that no such list need be furnished so long as the Trustee is in
possession thereof by reason of its acting as Security registrar.
The Company hereby appoints the Trustee as Securities
registrar.
SECTION 4.02. Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of the Securities (1) contained in the most recent list furnished to it
as provided in Section 4.01 or (2) received by it in the capacity of Securities
registrar (if so acting) hereunder. The Trustee may destroy any list furnished
to it as provided in Section 4.01 upon receipt of a new list so furnished.
(b) In case three or more holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned a Security for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other holders
of Securities or with holders of all Securities with respect to their rights
under this Indenture and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall
within 5 Business Days after the receipt of such application, at its election,
either:
(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions
of subsection (a) of this Section 4.02; or
(ii) inform such applicants as to the approximate
number of holders of all Securities whose names and addresses appear in
the information preserved at the time by the Trustee in accordance with
the provisions of subsection (a) of this Section 4.02, and as to the
approximate cost of mailing to such Securityholders the form of proxy
or other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder whose name and address appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.02 a copy of the form of proxy or
other communication which is specified in such request with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within 5 Business Days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the holders of
all Securities or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the written statement
so filed, shall enter an order refusing to sustain any of such objections or if,
after the entry of an order sustaining one or more of such
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objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Securityholders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Each and every holder of Securities, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any paying agent shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of the
holders of Securities in accordance with the provisions of subsection (b) of
this Section 4.02, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under said subsection (b).
SECTION 4.03. Reports of the Company.
(a) The Company covenants and agrees to file with the Trustee,
within 15 Business Days after the date on which the Company files the same with
the Commission, copies of the annual reports and of the information, documents
and other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of such sections, then to
file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee
and the Commission, in accordance with the rules and regulations prescribed from
time to time by the Commission, such additional information, documents and
reports with respect to compliance by the Company with the conditions and
covenants provided for in this Indenture as may be required from time to time by
such rules and regulations.
(c) The Company covenants and agrees to transmit by mail to
all holders of Securities, as the names and addresses of such holders appear
upon the Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this Section 4.03 as
may be required by rules and regulations prescribed from time to time by the
Commission.
(d) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
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(e) So long as is required for an offer or sale of the
Securities to qualify for an exemption under Rule 144A under the Securities Act,
the Company shall, upon request, provide the information required by clause
(d)(4) thereunder to each Holder and to each beneficial owner and prospective
purchaser of Securities identified by any holder of Restricted Securities,
unless such information is furnished to the Commission pursuant to Section 13 or
15(d) of the Exchange Act.
SECTION 4.04. Reports by the Trustee.
Within 60 days after May 15 of each year, commencing May 15,
1997, the Trustee shall provide to the holders of the Securities such reports as
are required by Section 313 of the Trust Indenture Act of 1939, if any, in the
form and in the manner provided by Section 313 of the Trust Indenture Act of
1939. The Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act of 1939.
ARTICLE V.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.01. Events of Default.
One or more of the following events of default shall
constitute an Event of Default hereunder (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest upon any Security
or any Other Debentures when it becomes due and payable, and
continuance of such default for a period of 30 days; provided, however,
that a valid extension of an interest payment period by the Company in
accordance with the terms hereof or, in the case of any Other
Debenture, the indenture related thereto, shall not constitute a
default in the payment of interest for this purpose; or
(b) default in the payment of all or any part of the principal
of (or premium, if any, on) any Security or any Other Debentures as and
when the same shall become due and payable either at maturity, upon
prepayment, by declaration of acceleration of maturity or otherwise; or
(c) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with), and continuance of such default
or breach for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the holders of at least 25% in principal
amount of the outstanding Securities a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
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(d) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Company in an involuntary
case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of the
Company or all or substantially all of its property, or ordering the
winding-up or liquidation of its affairs and such decree or order shall
remain unstayed and in effect for a period of 90 consecutive days; or
(e) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, shall consent to the entry of an order for relief in an
involuntary case under any such law, or shall consent to the
appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official)
of the Company or all or substantially all of its property, or shall
make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due.
If an Event of Default with respect to Securities at the time
outstanding occurs and is continuing, then in every such case the Trustee or the
holders of not less than 25% in principal amount of the Securities at the time
outstanding may declare the principal amount of all Securities to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by the holders of the outstanding Securities), and upon any such
declaration the same shall become immediately due and payable, provided,
however, that if an Event of Default specified in any one of paragraphs (d) or
(e) of this Section 5.01 occurs, all unpaid principal and accrued interest on
the Securities at the time outstanding shall become due and payable without any
declaration or other act on the part of the Trustee or any holder of the
Securities.
The foregoing provisions, however, are subject to the
condition that if, at any time after the principal of the Securities shall have
been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, (i) the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay (A) all matured installments of interest upon all the
Securities and the principal of and premium, if any, on any and all Securities
which shall have become due otherwise than by acceleration (with interest upon
such principal and premium, if any, and, to the extent that payment of such
interest is enforceable under applicable law, on overdue installments of
interest, at the same rate as the rate of interest specified in the Securities
to the date of such payment or deposit) and (B) such amount as shall be
sufficient to cover reasonable compensation to the Trustee and each predecessor
Trustee, their respective agents, attorneys and counsel, and all other expenses
and liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith, and (ii) any
and all Events of Default under the Indenture shall have been cured, waived or
otherwise remedied as provided herein, then, in every such case, the holders of
a majority in principal amount of the Securities at the time outstanding, by
written notice to the Company and to the Trustee, may rescind and annul such
declaration and its consequences, but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
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In case the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the Trustee and the holders of the Securities shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Trustee and the holders of the
Securities shall continue as though no such proceeding had been taken.
SECTION 5.02. Payment of Securities on Default; Suit Therefor.
The Company covenants that (a) in case default shall be made
in the payment of any installment of interest upon any of the Securities as and
when the same shall become due and payable, and such default shall have
continued for a period of 30 days, or (b) in case default shall be made in the
payment of the principal of or premium, if any, on any of the Securities as and
when the same shall have become due and payable, whether at maturity of the
Securities or upon prepayment or by declaration of acceleration of maturity or
otherwise, then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Securities, the whole amount that
then shall have become due and payable on all such Securities for principal and
premium, if any, or interest, or both, as the case may be, with interest upon
the overdue principal and premium, if any, and (to the extent that payment of
such interest is enforceable under applicable law and, if the Securities are
held by Trenwick Capital Trust I or a trustee of such trust, without duplication
of any other amounts paid by Trenwick Capital Trust I or a trustee in respect
thereof) upon the overdue installments of interest at the rate borne by the
Securities; and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including a reasonable
compensation to the Trustee, its agents, attorneys and counsel, and any expenses
or liabilities incurred by the Trustee hereunder other than through its
negligence or bad faith.
In case the Company shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any actions or proceedings
at law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or any other
obligor on the Securities and collect in the manner provided by law out of the
property of the Company or any other obligor on the Securities wherever situated
the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy
or for the reorganization of the Company or any other obligor on the Securities
under Title 11, United States Code, or any other applicable law, or in case a
receiver or trustee shall have been appointed for the property of the Company or
such other obligor, or in the case of any other similar judicial proceedings
relative to the Company or other obligor upon the Securities, or to the
creditors or property of the Company or such other obligor, the Trustee,
irrespective of whether the principal of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 5.02, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the Securities
and, in case of any judicial proceedings, to file such proofs of claim and other
papers or documents as may be
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necessary or advisable in order to have the claims of the Trustee (including any
claim for reasonable compensation to the Trustee and each predecessor Trustee,
and their respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee, except as a result of negligence or bad faith) and of
the Securityholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Securities, or to the creditors or property of the
Company or such other obligor, unless prohibited by applicable law and
regulations, to vote on behalf of the holders of the Securities in any election
of a trustee or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and to collect and receive any moneys or
other property payable or deliverable on any such claims, and to distribute the
same after the deduction of its charges and expenses; and any receiver, assignee
or trustee in bankruptcy or reorganization is hereby authorized by each of the
Securityholders to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee such amounts as shall be sufficient to
cover reasonable compensation to the Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or bad faith.
Nothing herein contained shall be construed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any holder thereof or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
All rights of action and of asserting claims under this
Indenture, or under any of the Securities, may be enforced by the Trustee
without the possession of any of the Securities, or the production thereof in
any trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the ratable benefit of
the holders of the Securities.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party) the Trustee shall be held to represent all
the holders of the Securities, and it shall not be necessary to make any holders
of the Securities parties to any such proceedings.
SECTION 5.03. Application of Moneys Collected by Trustee.
Any moneys collected by the Trustee shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such moneys, upon presentation of the Securities in respect of which moneys
have been collected, and stamping thereon the payment, if only partially paid,
and upon surrender thereof if fully paid:
First: To the payment of all amounts due to the Trustee under
Section 6.06, including the costs and expenses of collection applicable to the
Securities and reasonable compensation to the Trustee, its agents, attorneys and
counsel, and of all other expenses and
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liabilities incurred, and all advances made, by the Trustee except as a result
of its negligence or bad faith;
Second: To the payment of all Senior Indebtedness of the
Company if and to the extent required by Article XV;
Third: In case the principal of the outstanding Securities in
respect of which moneys have been collected shall not have become due and be
unpaid, to the payment of the amounts then due and unpaid upon Securities for
principal of (and premium, if any) and interest on the Securities, in respect of
which or for the benefit of which money has been collected, ratably, without
preference of priority of any kind, according to the amounts due on such
Securities for principal (and premium, if any) and interest, respectively; and
Fourth: To the Company.
SECTION 5.04. Proceedings by Securityholders.
No holder of any Security shall have any right by virtue of or
by availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof with respect to the
Securities specifying such Event of Default, as hereinbefore provided, and
unless also the holders of not less than 25% in principal amount of the
Securities at the time outstanding shall have made written request upon the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee for 90 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute any such action,
suit or proceeding, and during such 90 days the holders of a majority in
principal amount of the Securities at the time outstanding do not give a
direction to the Trustee inconsistent with the request, it being understood and
intended, and being expressly covenanted by the taker and holder of every
Security with every other taker and holder and the Trustee, that no one or more
holders of Securities shall have any right in any manner whatever by virtue of
or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of any other holder of Securities, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Securities.
Notwithstanding any other provisions in this Indenture,
however, the right of any holder of any Security to receive payment of the
principal of (premium, if any) and interest on such Security, on or after the
same shall have become due and payable, or to institute suit for the enforcement
of any such payment, shall not be impaired or affected without the consent of
such holder and by accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security with every
other such taker and holder and the Trustee, that no one or more holders of
Securities shall have any right in any manner whatsoever by virtue or by
availing of any provision of this Indenture to affect, disturb or prejudice the
rights of the holders of any other Securities, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this
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Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Securities. For the protection and enforcement
of the provisions of this Section, each and every Securityholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
The Company and the Trustee acknowledge that pursuant to the
Declaration, the holders of Capital Securities are entitled, in the
circumstances and subject to the limitations set forth therein, to commence a
Direct Action with respect to any Event of Default under this Indenture and the
Securities. Without the consent of each holder of Capital Securities then
outstanding, the Company shall not take any action that impairs or affects the
right of holders of Capital Securities to bring a Direct Action.
SECTION 5.05. Proceedings by Trustee.
In case an Event of Default occurs with respect to Securities
and is continuing, the Trustee may in its discretion proceed to protect and
enforce the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
of such rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
SECTION 5.06. Remedies Cumulative and Continuing.
Except as provided in the last paragraph of Section 2.08, all
powers and remedies given by this Article V to the Trustee or to the
Securityholders shall, to the extent permitted by law, be deemed cumulative and
not exclusive of any other powers and remedies available to the Trustee or the
holders of the Securities, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to the Securities, and no delay
or omission of the Trustee or of any holder of any of the Securities to exercise
any right or power accruing upon any Event of Default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 5.04, every power and remedy given by this Article V or by
law to the Trustee or to the Securityholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the
Securityholders.
SECTION 5.07. Direction of Proceedings and Waiver of Defaults by Majority of
Securityholders.
The holders of a majority in principal amount of the
Securities at the time outstanding shall have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; provided,
however, that (subject to the provisions of Section 6.01) the Trustee shall have
the right to decline to follow any such direction if the Trustee shall determine
that the action so directed would be unjustly prejudicial to the holders not
taking part in such direction or if the Trustee being advised by counsel
determines that the action or proceeding so directed may not lawfully be taken
or if the Trustee in good faith by its board of directors or
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trustees, executive committee, or a trust committee of directors or trustees
and/or Responsible Officers, shall determine that the action or proceedings so
directed would involve the Trustee in personal liability. Prior to any
declaration accelerating the Stated Maturity of the Securities, the holders of a
majority in principal amount of the Securities at the time outstanding may on
behalf of the holders of all of the Securities waive any past Default or Event
of Default and its consequences except a Default (a) in the payment of principal
of or premium, if any, or interest on any of the Securities or (b) in respect of
covenants or provisions hereof which cannot be modified or amended without the
consent of the holder of each Security affected; provided, however, that if the
Securities are held by the Property Trustee, such waiver or modification to such
waiver shall not be effective until the holders of a majority in aggregate
liquidation amount of Trust Securities shall have consented to such waiver or
modification to such waiver; provided, further, that if the consent of the
holder of each outstanding Security is required, such waiver shall not be
effective until each holder of the Trust Securities shall have consented to such
waiver. Upon any such waiver, the Default covered thereby shall be deemed to be
cured for all purposes of this Indenture and the Company, the Trustee and the
holders of the Securities shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon. Whenever any Default or
Event of Default hereunder shall have been waived as permitted by this Section
5.07, said Default or Event of Default shall for all purposes of the Securities
and this Indenture be deemed to have been cured and to be not continuing.
SECTION 5.08. Notice of Defaults.
The Trustee shall, within 90 days after the occurrence of a
Default with respect to the Securities mail to all Securityholders, as the names
and addresses of such holders appear upon the Security register, notice of all
Defaults known to the Trustee, unless such Defaults shall have been cured before
the giving of such notice (the term "Defaults" for the purpose of this Section
5.08 being hereby defined to be the events specified in clauses (a), (b), (c),
(d) and (e) of Section 5.01, not including periods of grace, if any, provided
for therein, and irrespective of the giving of written notice specified in
clause (c) of Section 5.01); and provided, that, except in the case of Default
in the payment of the principal of or premium, if any, or interest on any of the
Securities, the Trustee shall be protected in withholding such notice if and so
long as the board of directors of the Trustee, the executive committee thereof,
or a trust committee of directors and/or Responsible Officers of the Trustee in
good faith determines that the withholding of such notice is in the interests of
the Securityholders; and provided, further, that in the case of any Default of
the character specified in Section 5.01(c), no such notice to Securityholders
shall be given until at least 60 days after the occurrence thereof but shall be
given within 90 days after such occurrence.
SECTION 5.09. Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.09 shall not
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apply to any suit instituted by the Trustee, to any suit instituted by any
Securityholder or group of Securityholders holding in the aggregate more than
10% in principal amount of the Securities outstanding at the time outstanding,
or to any suit instituted by any Securityholder for the enforcement of the
payment of the principal of (or premium, if any) or interest on any Security
against the Company on or after the same shall have become due and payable.
SECTION 5.10 Waiver of Stay or Extension Laws.
The Company (to the extent it may lawfully do so) shall not at
any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and shall not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 5.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or any Securityholder to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Trustee or to the Securityholders may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by the Securityholders,
as the case may be.
ARTICLE VI.
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee.
With respect to the holders of the Securities issued
hereunder, the Trustee, prior to the occurrence of an Event of Default and after
the curing or waiving of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default has occurred (which has not
been cured or waived) the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after
the curing or waiving of all Events of Default which may have occurred:
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(i) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this Indenture, and
the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but, in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Officers of the Trustee, unless
it shall be proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith, in accordance with the
direction of the Securityholders pursuant to Section 5.07, relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or liability is not reasonably assured to it under
the terms of this Indenture or adequate indemnity against such risk is not
reasonably assured to it.
Every portion of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Article VI and to the provisions of the Trust
Indenture Act of 1939.
SECTION 6.02. Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond,
note, debenture or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties,
and the Trustee need not investigate any fact or matter stated in such
document;
(b) any request, direction, order or demand of the Company
mentioned herein may be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed) and the Trustee shall not be liable for any
action taken or suffered or omitted by it hereunder in good faith in
reliance on
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such Officers' Certificate; and any Board Resolution may be evidenced
to the Trustee by a copy thereof certified by the Secretary or an
Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection and
any advice or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders, pursuant to the
provisions of this Indenture, unless such Securityholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture; nothing contained herein shall, however, relieve the Trustee
of the obligation, upon the occurrence of an Event of Default (that has
not been cured or waived), to exercise such of the rights and powers
vested in it by this Indenture, and to use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, debenture, coupon or other paper or document,
unless requested in writing to do so by the holders of a majority in
principal amount of the Securities at the time outstanding; provided,
however, that if the payment within a reasonable time to the Trustee of
the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require reasonable indemnity
against such expense or liability as a condition to so proceeding; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents (including any Authenticating Agent) or attorneys, and
the Trustee shall not be responsible for any misconduct or negligence
on the part of any such agent or attorney appointed by it with due
care.
(h) The Trustee shall not be charged with knowledge of any
Default or Event of Default except (i) a Default under Sections 5.01(a)
and 5.01(b) of this Indenture (other than with respect to the payment
of Additional Interest) or (ii) any Default or Event of Default of
which a Responsible Officer shall have actual knowledge thereof or the
Trustee shall have received notice thereof in accordance with Section
13.03 hereof from the Company or any Securityholder.
SECTION 6.03. No Responsibility for Recitals, etc.
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The recitals contained herein and in the Securities (except in
the certificate of authentication of the Trustee or the Authenticating Agent)
shall be taken as the statements of the Company, and the Trustee and the
Authenticating Agent assume no responsibility for the correctness of the same.
The Trustee and the Authenticating Agent make no representations as to the
validity or sufficiency of this Indenture or of the Securities. The Trustee and
the Authenticating Agent shall not be accountable for the use or application by
the Company of any Securities or the proceeds of any Securities authenticated
and delivered by the Trustee or the Authenticating Agent in conformity with the
provisions of this Indenture.
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer Agents or
Registrar May Own Securities.
The Trustee or any Authenticating Agent or any paying agent or
any transfer agent or any Security registrar, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights it
would have if it were not Trustee, Authenticating Agent, paying agent, transfer
agent or Security registrar.
SECTION 6.05. Moneys to be Held in Trust.
Subject to the provisions of Section 11.04, all moneys
received by the Trustee or any paying agent shall, until used or applied as
herein provided, be held in trust for the purpose for which they were received,
but need not be segregated from other funds except to the extent required by
law. The Trustee and any paying agent shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed in writing with
the Company. So long as no Event of Default shall have occurred and be
continuing, all interest allowed on any such moneys shall be paid from time to
time upon the written order of the Company, signed by the Chairman of the Board
of Directors, the President or a Vice President or the Treasurer or an Assistant
Treasurer of the Company.
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SECTION 6.06. Compensation and Expenses of Trustee.
The Company covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, such compensation as shall
be agreed to in writing between the Company and the Trustee (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust), and the Company will pay or reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Trustee's compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust. The Company also covenants to
indemnify each of the Trustee or any predecessor Trustee (and its officers,
agents, directors and employees) for, and to hold it harmless against, any and
all loss, damage, claim, liability or expense including reasonable attorney's
fees and taxes (other than taxes based on the income of the Trustee) incurred
without negligence or bad faith on the part of the Trustee and arising out of or
in connection with the acceptance or administration of this trust, including the
costs and expenses of defending itself against any claim of liability in the
premises. The obligations of the Company under this Section 6.06 to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustee in its
capacity as such, except funds held in trust for the benefit of the holders of
particular Securities.
Without prejudice to any other rights available to the Trustee
under applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(d) or Section
5.01(e), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services of the Trustee as provided for
herein are intended to constitute expenses of administration under any
applicable federal or state bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive resignation or
removal of the Trustee and the termination of this Indenture.
SECTION 6.07. Officers' Certificate as Evidence.
Except as otherwise provided in Sections 6.01 and 6.02,
whenever in the administration of the provisions of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or established
prior to taking or omitting any action hereunder, such matter (unless other
evidence in respect thereof is herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee, and such certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any action taken
or omitted by it under the provisions of this Indenture upon the faith thereof.
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SECTION 6.08. Conflicting Interest of Trustee.
If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act of 1939, the
Trustee and the Company shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act of 1939.
SECTION 6.09. Eligibility of Trustee.
The Trustee hereunder shall at all times be a corporation
organized and doing business under the laws of the United States of America or
any state or territory thereof or of the District of Columbia or a corporation
or other Person permitted to act as trustee by the Commission authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000) and subject to
supervision or examination by federal, state, territorial, or District of
Columbia authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 6.09 the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.09, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.
SECTION 6.10. Resignation or Removal of Trustee.
(a) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign by giving written notice of such resignation
to the Company and by mailing notice thereof to the holders of the Securities at
their addresses as they shall appear on the Security register. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee or trustees by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and have
accepted appointment within 60 days after the mailing of such notice of
resignation to the affected Securityholders, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor trustee,
or any Securityholder who has been a bona fide holder of a Security for at least
six months may, subject to the provisions of Section 5.09, on behalf of himself
and all others similarly situated, petition any such court for the appointment
of a successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the
provisions of Section 6.08 after written request therefor by the
Company or by any Securityholder who has been a bona fide holder of a
Security or Securities for at least six months, or
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(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.09 and shall fail to resign
after written request therefor by the Company or by any such
Securityholder, or
(iii) the Trustee shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 5.09, any
Securityholder who has been a bona fide holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.
(c) The holders of a majority in principal amount of the
Securities at the time outstanding may at any time remove the Trustee and
nominate a successor trustee, which shall be deemed appointed as successor
trustee unless within 10 days after such nomination the Company objects thereto
or if no successor trustee shall have been so appointed and shall have accepted
appointment within 30 days after such removal, in which case the Trustee so
removed or any Securityholder, upon the terms and conditions and otherwise as in
subsection (a) of this Section 6.10 provided, may petition any court of
competent jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section 6.10
shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 6.11.
SECTION 6.11. Acceptance by Successor Trustee.
Any successor trustee appointed as provided in Section 6.10
shall execute, acknowledge and deliver to the Company and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the retiring trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee herein; but,
nevertheless, on the written request of the Company or of the successor trustee,
the trustee ceasing to act shall, upon payment of any amounts then due it
pursuant to the provisions of Section 6.06, execute and deliver an instrument
transferring to such successor trustee all the rights and powers of the trustee
so ceasing to act and shall duly assign, transfer and deliver to such successor
trustee all property and money held by such retiring trustee thereunder. Upon
request of any such successor trustee, the Company shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming to
such successor trustee all such rights and powers. Any trustee ceasing to act
shall, nevertheless, retain a lien upon all property or funds held or
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collected by such trustee to secure any amounts then due it pursuant to the
provisions of Section 6.06.
No successor trustee shall accept appointment as provided in
this Section 6.11 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 6.08 and eligible under the
provisions of Section 6.09.
Upon acceptance of appointment by a successor trustee as
provided in this Section 6.11, the Company shall mail notice of the succession
of such trustee hereunder to the holders of Securities at their addresses as
they shall appear on the Security register. If the Company fails to mail such
notice within 10 Business Days after the acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Company.
SECTION 6.12. Succession by Merger, etc.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor trustee; and in all such cases such certificates shall have the
full force which the Securities or this Indenture elsewhere provides that the
certificate of the Trustee shall have; provided, however, that the right to
adopt the certificate of authentication of any predecessor Trustee or
authenticate Securities in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
SECTION 6.13. Limitation on Rights of Trustee as a Creditor.
The Trustee shall comply with Section 311(a) of the Trust
Indenture Act of 1939, excluding any creditor relationship described in Section
311(b) of the Trust Indenture Act of 1939. A Trustee who has resigned or been
removed shall be subject to Section 311(a) of the Trust Indenture Act of 1939 to
the extent included therein.
SECTION 6.14. Authenticating Agents.
There may be one or more Authenticating Agents appointed by
the Trustee upon the request of the Company with power to act on its behalf and
subject to its direction in the authentication and delivery of Securities issued
upon exchange or registration of transfer thereof as fully to all intents and
purposes as though any such Authenticating Agent had been expressly authorized
to authenticate and deliver Securities; provided, that the Trustee shall
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have no liability to the Company for any acts or omissions of the Authenticating
Agent with respect to the authentication and delivery of Securities. Any such
Authenticating Agent shall at all times be a corporation organized and doing
business under the laws of the United States or of any state or territory
thereof or of the District of Columbia authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of at least
$50,000,000 and being subject to supervision or examination by federal, state,
territorial or District of Columbia authority. If such corporation publishes
reports of condition at least annually pursuant to law or the requirements of
such authority, then for the purposes of this Section 6.14 the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and
with the effect herein specified in this Section.
Any corporation into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate trust business of any Authenticating Agent, shall be the successor of
such Authenticating Agent hereunder, if such successor corporation is otherwise
eligible under this Section 6.14 without the execution or filing of any paper or
any further act on the part of the parties hereto or such Authenticating Agent.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The Trustee may
at any time terminate the agency of any Authenticating Agent by giving written
notice of termination to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time any Authenticating Agent shall cease to be eligible under this Section
6.14, the Trustee may, and upon the request of the Company shall, promptly
appoint a successor Authenticating Agent eligible under this Section 6.14, shall
give written notice of such appointment to the Company and shall mail notice of
such appointment to all Securityholders as the names and addresses of such
holders appear on the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all rights,
powers, duties and responsibilities of its predecessor hereunder, with like
effect as if originally named as Authenticating Agent herein.
The Company, as borrower, agrees to pay to any Authenticating
Agent from time to time reasonable compensation for its services. Any
Authenticating Agent shall have no responsibility or liability for any action
taken by it as such in accordance with the directions of the Trustee.
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ARTICLE VII.
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders.
Whenever in this Indenture it is provided that the holders of
a specified percentage in principal amount of the Securities at the time
outstanding may take any action (including the making of any demand or request,
the giving of any notice, consent or waiver or the taking of any other action)
the fact that at the time of taking any such action the holders of such
specified percentage have joined therein may be evidenced (a) by any instrument
or any number of instruments of similar tenor executed by such Securityholders
in person or by agent or proxy appointed in writing, or (b) by the record of
such holders of Securities voting in favor thereof at any meeting of such
Securityholders duly called and held in accordance with the provisions of
Article VIII, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of such Securityholders.
If the Company shall solicit from the Securityholders any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for the determination of
Securityholders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other action, but the Company shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Securityholders of record at the
close of business on the record date shall be deemed to be Securityholders for
the purposes of determining whether Securityholders of the requisite proportion
of outstanding Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
action, and for that purpose the outstanding Securities shall be computed as of
the record date; provided, however, that no such authorization, agreement or
consent by such Securityholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.
SECTION 7.02. Proof of Execution by Securityholders.
Subject to the provisions of Section 6.01, 6.02 and 8.05,
proof of the execution of any instrument by a Securityholder or his agent or
proxy shall be sufficient if made in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The ownership of Securities shall be proved by the
Security Register or by a certificate of the Security registrar. The Trustee may
require such additional proof of any matter referred to in this Section as it
shall deem necessary.
The record of any Securityholders' meeting shall be proved in
the manner provided in Section 8.06.
SECTION 7.03. Who Are Deemed Absolute Owners.
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Prior to due presentment for registration of transfer of any
Security, the Company, the Trustee, any Authenticating Agent, any paying agent,
any transfer agent and any Security registrar may deem the Person in whose name
such Security shall be registered upon the Security Register to be, and may
treat him as, the absolute owner of such Security (whether or not such Security
shall be overdue) for the purpose of receiving payment of or on account of the
principal of and premium, if any, and, subject to Section 2.06, interest on such
Security and for all other purposes; and neither the Company nor the Trustee nor
any Authenticating Agent nor any paying agent nor any transfer agent nor any
Security registrar shall be affected by any notice to the contrary. All such
payments so made to any holder for the time being or upon his order shall be
valid, and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Security.
SECTION 7.04. Securities Owned by Company Deemed Not Outstanding.
In determining whether the holders of the requisite principal
amount of Securities at the time outstanding have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the
Company or any other obligor on the Securities or by any person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any other obligor on the Securities shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination; provided, that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver,
only Securities which the Trustee actually knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 7.04 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Securities and that the pledgee is not the Company or any such other
obligor or person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any such other obligor. In
the case of a dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee.
SECTION 7.05. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 7.01, of the taking of any action by the holders
of the percentage in principal amount of the Securities at the time outstanding
specified in this Indenture in connection with such action, any holder of a
Security (or any Security issued in whole or in part in exchange or substitution
therefor) the serial number of which is shown by the evidence to be included in
the Securities the holders of which have consented to such action may, by filing
written notice with the Trustee at the principal office of the Trustee and upon
proof of holding as provided in Section 7.02, revoke such action so far as
concerns such Security (or so far as concerns the principal amount represented
by any exchanged or substituted Security). Except as aforesaid any such action
taken by the holder of any Security shall be conclusive and binding upon such
holder and upon all future holders and owners of such Security, and of any
Security issued in exchange or substitution therefor, irrespective of whether or
not any notation in regard thereto is made upon such Security or any Security
issued in exchange or substitution therefor.
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ARTICLE VIII.
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purpose of Meetings.
A meeting of Securityholders may be called at any time and
from time to time pursuant to the provisions of this Article VIII for any of the
following purposes:
(a) to give any notice to the Company or to the Trustee, or to
give any directions to the Trustee, or to consent to the waiving of any
Default hereunder and its consequences, or to take any other action
authorized to be taken by Securityholders pursuant to any of the
provisions of Article V;
(b) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article VI;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.02; or
(d) to take any other action authorized to be taken by or on
behalf of the holders of any specified principal amount of such
Securities at the time outstanding under any other provision of this
Indenture or under applicable law.
SECTION 8.02. Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Securityholders
to take any action specified in Section 8.01, to be held at such time and at
such place in the Borough of Manhattan, The City of New York, as the Trustee
shall determine. Notice of every meeting of the Securityholders, setting forth
the time and the place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be mailed to holders of Securities at their
addresses as they shall appear on the Securities Register. Such notice shall be
mailed not less than 20 nor more than 180 days prior to the date fixed for the
meeting.
SECTION 8.03. Call of Meetings by Company or Securityholders.
In case at any time the Company pursuant to a Board
Resolution, or the holders of at least 10% in principal amount of the Securities
at the time outstanding, shall have requested the Trustee to call a meeting of
Securityholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such request,
then the Company or such Securityholders may determine the time and the place in
the Borough of Manhattan, The City of New York for such meeting and may call
such meeting to take any action authorized in Section 8.01, by mailing notice
thereof as provided in Section 8.02.
SECTION 8.04. Qualifications for Voting.
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To be entitled to vote at any meeting of Securityholders a
Person shall (a) be a holder of one or more Securities or (b) a Person appointed
by an instrument in writing as proxy by a holder of one or more Securities. The
only Persons who shall be entitled to be present or to speak at any meeting of
Securityholders shall be the Persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 8.05. Regulations.
(a) Notwithstanding any other provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Securityholders, in regard to proof of the holding of Securities
and of the appointment of proxies, and in regard to the appointment and duties
of inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote of the meeting.
(c) Subject to the provisions of Section 8.04, at any meeting
each holder of Securities or proxy therefor shall be entitled to one vote for
each $1,000 principal amount of Securities held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not outstanding and ruled by the chairman of the meeting
to be not outstanding. The chairman of the meeting shall have no right to vote
other than by virtue of Securities held by him or instruments in writing as
aforesaid duly designating him as the Person to vote on behalf of other
Securityholders. Any meeting of Securityholders duly called pursuant to the
provisions of Section 8.02 or 8.03 may be adjourned from time to time by a
majority of those present, whether or not constituting a quorum, and the meeting
may be held as so adjourned without further notice.
(d) The Persons entitled to vote a majority in principal
amount of the outstanding Securities shall constitute a quorum for a meeting of
holders of Securities; provided, however, that if any action is to be taken at
such meeting with respect to a consent, waiver, request, demand, notice,
authorization, direction or other action which may be given by the holders of
not less than a specified percentage in principal amount of the outstanding
Securities, the Persons holding or representing such specified percentage in
principal amount of the outstanding Securities will constitute a quorum. In the
absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of holders of Securities,
be dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 8.02, except that such
notice need be given only once not less than five days prior the date on which
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the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the outstanding Securities which shall constitute a
quorum.
(e) Except as limited by the first proviso to the first
paragraph of Section 9.02 or any other provision hereof granting rights to
holders of Capital Securities, any resolution presented to a meeting or
adjourned meeting duly reconvened at which a quorum is present as aforesaid may
be adopted by the affirmative vote of the holders of a majority in principal
amount of the outstanding Securities; provided, however, that, except as limited
by the first proviso to the first paragraph of Section 9.02 or any other
provision hereof granting any rights to holders of Capital Securities, any
resolution with respect to any consent, waiver, request, demand, notice,
authorization, direction or other action which this Indenture expressly provides
may be given by the holders of not less than a specified percentage in principal
amount of the outstanding Securities may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid only by
the affirmative vote of the holders of not less than such specified percentage
in principal amount of the outstanding Securities.
(f) Any resolution passed or decision taken at any meeting of
holders of Securities duly held in accordance with this Section shall be binding
on all the holders of Securities whether or not present or represented at the
meeting.
SECTION 8.06. Voting.
The vote upon any resolution submitted to any meeting of
holders of Securities shall be by written ballots on which shall be subscribed
the signatures of such holders or of their representatives by proxy and the
serial number or numbers of the Securities held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Securityholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 8.02. The record shall show the serial numbers of the
Securities voting in favor of or against any resolution. The record shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting. The holders of the Initial Securities
and the Exchange Securities shall vote for all purposes as a single class.
Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
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ARTICLE IX.
AMENDMENTS
SECTION 9.01. Without Consent of Securityholders.
The Company and the Trustee may from time to time and at any
time amend this Indenture, without the consent of the Securityholders, for one
or more of the following purposes:
(a) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company
pursuant to Article X hereof;
(b) to add to the covenants of the Company such further
covenants, restrictions or conditions for the protection of the
Securityholders as the Board of Directors and the Trustee shall
consider to be for the protection of the Securityholders, and to make
the occurrence, or the occurrence and continuance, of a Default in any
of such additional covenants, restrictions or conditions a Default or
an Event of Default permitting the enforcement of all or any of the
remedies provided in this Indenture as herein set forth; provided,
however, that in respect of any such additional covenant, restriction
or condition, such amendment may provide for a particular period of
grace after Default (which period may be shorter or longer than that
allowed in the case of other Defaults) or may provide for an immediate
enforcement upon such Default or may limit the remedies available to
the Trustee upon such Default;
(c) to provide for the issuance under this Indenture of
Securities in coupon form if allowed by law (including Securities
registrable as to principal only) and to provide for exchangeability of
such Securities with the Securities issued hereunder in fully
registered form and to make all appropriate changes for such purpose;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture, or to make such other provisions in
regard to matters or questions arising under this Indenture; provided,
that any such action shall not materially adversely affect the
interests of the holders of the Securities;
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities;
(f) to make provision for transfer procedures, certification,
book-entry provisions, the form of restricted securities legends, if
any, to be placed on Securities, and all other matters required
pursuant to Section 2.07 or otherwise necessary, desirable or
appropriate in connection with the issuance of Securities to holders of
Capital Securities in the event of a distribution of Securities by
Trenwick Capital Trust I following a Dissolution Event;
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(g) to qualify or maintain qualification of this Indenture
under the Trust Indenture Act of 1939; or
(h) to make any change that does not adversely affect the
rights of any Securityholder in any material respect.
The Trustee is hereby authorized to join with the Company in
the execution of any supplemental indenture to effect such amendment, to make
any further appropriate agreements and stipulations which may be therein
contained and to accept the conveyance, transfer and assignment of any property
thereunder, but the Trustee shall not be obligated to, but may in its
discretion, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Any amendment to this Indenture authorized by the provisions
of this Section 9.01 may be executed by the Company and the Trustee without the
consent of the holders of any of the Securities at the time outstanding,
notwithstanding any of the provisions of Section 9.02.
SECTION 9.02. With Consent of Securityholders.
(a) With the consent (evidenced as provided in Section 7.01)
of the holders of a majority in principal amount of the Securities at the time
outstanding, the Company, when authorized by a Board Resolution, and the Trustee
may from time to time and at any time amend this Indenture for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
holders of the Securities; provided, however, that no such amendment shall
without the consent of the holders of each Security then outstanding and
affected hereby (i) extend the Stated Maturity of any Security, or reduce the
rate or extend the time of payment of interest thereon (except as contemplated
by Article XVI), or reduce the principal amount thereof, or reduce any amount
payable on prepayment thereof, or make the principal thereof or any interest or
premium thereon payable in any coin or currency other than that provided in the
Securities, or impair or affect the right of any Securityholder to institute
suit for payment thereof, or (ii) reduce the aforesaid percentage of Securities
the holders of which are required to consent to any such amendment to this
Indenture; provided, however, that if the Securities are held by Trenwick
Capital Trust I, such amendment shall not be effective until the holders of a
majority in liquidation amount of Trust Securities shall have consented to such
amendment; provided, further, that if the consent of the holder of each
outstanding Security is required, such amendment shall not be effective until
each holder of the Trust Securities shall have consented to such amendment.
(b) Upon the request of the Company accompanied by a Board
Resolution authorizing the execution of any supplemental indenture affecting
such amendment, and upon the filing with the Trustee of evidence of the consent
of Securityholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
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(c) Promptly after the execution by the Company and the
Trustee of any supplemental indenture pursuant to the provisions of this
Section, the Trustee shall transmit by mail, first class postage prepaid, a
notice, prepared by the Company, setting forth in general terms the substance of
such supplemental indenture, to the Securityholders as their names and addresses
appear upon the Security Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
(d) It shall not be necessary for the consent of the
Securityholders under this Section 9.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
SECTION 9.03. Compliance with Trust Indenture Act of 1939; Effect of
Supplemental Indentures.
Any supplemental indenture executed pursuant to the provisions
of this Article IX shall comply with the Trust Indenture Act of 1939. Upon the
execution of any supplemental indenture pursuant to the provisions of this
Article IX, this Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Securities shall thereafter be determined, exercised
and enforced hereunder, subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
SECTION 9.04. Notation on Securities.
Securities authenticated and delivered after the execution of
any supplemental indenture affecting such series pursuant to the provisions of
this Article IX may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Securities so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any modification of this
Indenture contained in any such supplemental indenture may be prepared and
executed by the Company, authenticated by the Trustee or the Authenticating
Agent and delivered in exchange for the Securities then outstanding.
SECTION 9.05. Evidence of Compliance of Supplemental Indenture to be Furnished
to Trustee.
(a) The Trustee, subject to the provisions of Sections 6.01
and 6.02, may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article IX.
(b) The Trustee may receive an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant to this
Article is authorized or permitted by, and conforms to, the terms of this
Article and that it is proper for the Trustee under the provisions of this
Article to join in the execution thereof.
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ARTICLE X.
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., on Certain Terms.
Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of the Company with or into
any other Person (whether or not affiliated with the Company, as the case may
be), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance, transfer or lease of the property of the Company or its successor or
successors as an entirety, or substantially as an entirety, to any other Person
(whether or not affiliated with the Company or its successor or successors)
authorized to acquire and operate the same; provided, that (a) the Company is
the surviving Person or the Person formed by or surviving any such consolidation
or merger (if other than the Company) or the Person to which such sale,
conveyance, transfer or lease of property is made is a Person organized and
existing under the laws of the United States or any State thereof or the
District of Columbia, and (b) upon any such consolidation, merger, sale,
conveyance, transfer or lease, the due and punctual payment of the principal of
(and premium, if any) and interest on the Securities according to their tenor
and the due and punctual performance and observance of all the covenants and
conditions of this Indenture to be kept or performed by the Company shall be
expressly assumed, by supplemental indenture (which shall conform to the
provisions of the Trust Indenture Act of 1939, as then in effect) satisfactory
in form to the Trustee executed and delivered to the Trustee by the Person
formed by such consolidation, or into which the Company shall have been merged,
or by the Person which shall have acquired such property, and (c) after giving
effect to such consolidation, merger, sale, conveyance, transfer or lease, no
Default or Event of Default shall have occurred and be continuing.
SECTION 10.02. Successor Corporation to be Substituted for Company.
In case of any such consolidation, merger, conveyance or
transfer and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the due and punctual payment of the principal of (and premium, if
any) and interest on all of the Securities and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed or observed by the Company, such successor Person shall succeed to and
be substituted for the Company, with the same effect as if it had been named
herein as the party of the first part, and the Company thereupon shall be
relieved of any further liability or obligation hereunder or upon the
Securities. Such successor Person thereupon may cause to be signed, and may
issue either in its own name or in the name of Trenwick Group Inc., any or all
of the Securities issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee or the Authenticating Agent;
and, upon the order of such successor Person instead of the Company and subject
to all the terms, conditions and limitations in this Indenture prescribed, the
Trustee or the Authenticating Agent shall authenticate and deliver any
Securities which previously shall have been signed and delivered by the officers
of the Company to the Trustee or the Authenticating Agent for authentication,
and any Securities which such successor Person thereafter shall cause to be
signed and delivered to the Trustee or the Authenticating Agent for that
purpose. All the Securities so
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issued shall in all respects have the same legal rank and benefit under this
Indenture as the Securities theretofore or thereafter issued in accordance with
the terms of this Indenture as though all of such Securities had been issued at
the date of the execution hereof.
SECTION 10.03. Opinion of Counsel to be Given Trustee.
The Trustee, subject to the provisions of Sections 6.01 and
6.02, may receive an Opinion of Counsel as conclusive evidence that any
consolidation, merger, sale, conveyance, transfer or lease, and any assumption,
permitted or required by the terms of this Article X, complies with the
provisions of this Article X.
ARTICLE XI.
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture.
When (a) the Company shall deliver to the Trustee for
cancellation all Securities theretofore authenticated (other than any Securities
which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.08) and not theretofore cancelled, or
(b) all the Securities not theretofore cancelled or delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or are to be called for prepayment within one
year under arrangements satisfactory to the Trustee for the giving of notice of
prepayment, and the Company shall deposit or cause to be deposited with the
Trustee, in trust, funds sufficient to pay on the Stated Maturity or upon
prepayment all of the Securities (other than any Securities which shall have
been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.08) not theretofore cancelled or delivered to the Trustee
for cancellation, including principal (and premium, if any) and interest due or
to become due to the Stated Maturity or prepayment date, as the case may be, but
excluding, however, the amount of any moneys for the payment of principal (or
premium, if any) or interest on the Securities (1) theretofore repaid to the
Company in accordance with the provisions of Section 11.04, or (2) paid to any
State or to the District of Columbia pursuant to its unclaimed property or
similar laws, and if in either case the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect except for the provisions of Sections 2.02, 2.07,
2.08, 3.01, 3.02, 3.04, 6.06, 6.10 and 11.04 hereof, which shall survive until
such Securities shall mature and be paid. Thereafter, Sections 6.06, 6.10 and
11.04 shall survive, and the Trustee, on demand of the Company accompanied by
any Officers' Certificate and an Opinion of Counsel, to the effect that all
conditions to the satisfaction and discharge of this Indenture have been
satisfied, and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture, the
Company, however, hereby agreeing to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee in
connection with this Indenture or the Securities.
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SECTION 11.02. Deposited Moneys and U.S. Government Obligations to be Held in
Trust by Trustee.
Subject to the provisions of Section 11.04, all moneys and
U.S. Government Obligations deposited with the Trustee pursuant to Sections
11.01 or 11.05 shall be held in trust and applied by it to the payment, either
directly or through any paying agent (including the Company if acting as its own
paying agent), to the holders of the particular Securities for the payment of
which such moneys or U.S. Government Obligations have been deposited with the
Trustee, of all sums due and to become due thereon for principal (premium, if
any) and interest.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 11.05 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the holders of outstanding Securities.
SECTION 11.03. Paying Agent to Repay Moneys Held.
Upon the satisfaction and discharge of this Indenture all
moneys then held by any paying agent of the Securities (other than the Trustee)
shall, upon written demand of the Company, be repaid to it or paid to the
Trustee, and thereupon such paying agent shall be released from all further
liability with respect to such moneys.
SECTION 11.04. Return of Unclaimed Moneys.
Any moneys deposited with or paid to the Trustee or any paying
agent for payment of the principal of (or premium, if any, on) or interest on
Securities and not applied but remaining unclaimed by the holders of Securities
for two years after the date upon which the principal of (or premium, if any,
on) or interest on such Securities, as the case may be, shall have become due
and payable, shall be repaid to the Company by the Trustee or such paying agent
on written demand; and the holder of any of the Securities shall thereafter look
only to the Company for any payment which such holder may be entitled to collect
and all liability of the Trustee or such paying agent with respect to such
moneys shall thereupon cease.
SECTION 11.05. Defeasance Upon Deposit of Moneys or U.S. Government Obligations.
The Company shall be deemed to have been Discharged (as
defined below) from its obligations with respect to the Securities on the 91st
day after the applicable conditions set forth below have been satisfied with
respect to the Securities:
(a) The Company shall have deposited or caused to be deposited
irrevocably with the Trustee or the Defeasance Agent (as defined below)
as trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the holders of the Securities (i)
money in an amount, or (ii) U.S. Government Obligations which through
the payment of interest and principal in respect thereof in accordance
with their terms will provide, not later than one Business Day before
the due date of any payment, money in an amount, or (iii) a combination
of (i) and (ii), sufficient, in the opinion (with respect to (ii) and
(iii)) of
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a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee
and the Defeasance Agent, if any, to pay and discharge each installment
of principal of (and premium, if any) and interest on the outstanding
Securities on the dates such installments of principal, premium or
interest are due;
(b) if the Securities are then listed on any national
securities exchange, the Company shall have delivered to the Trustee
and the Defeasance Agent, if any, an Opinion of Counsel to the effect
that the exercise of the option under this Section 11.05 would not
cause such Securities to be delisted from such exchange;
(c) no Default or Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such
deposit; and
(d) the Company shall have delivered to the Trustee and the
Defeasance Agent, if any, an Opinion of Counsel to the effect that
holders of the Securities will not recognize income, gain or loss for
United States federal income tax purposes as a result of the exercise
of the option under this Section 11.05 and will be subject to United
States federal income tax in the same amount and in the same manner and
at the same times as would have been the case if such option had not
been exercised, and such opinion shall be accompanied by a private
letter ruling to that effect received from the United States Internal
Revenue Service or a revenue ruling pertaining to a comparable form of
transaction to that effect published by the United States Internal
Revenue Service.
"Discharged" means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by the Securities and to
have satisfied all the obligations under this Indenture relating to the
Securities (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except (A) the rights of holders of
Securities to receive, from the trust fund described in clause (1) above,
payment of the principal of (and premium, if any) and the interest on the
Securities when such payments are due; (B) the Company's obligations with
respect to the Securities under Sections 2.07, 2.08, 5.02 and 11.04; and (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder.
"Defeasance Agent" means another financial institution which
is eligible to act as Trustee hereunder and which assumes all of the obligations
of the Trustee necessary to enable the Trustee to act hereunder. In the event
such a Defeasance Agent is appointed pursuant to this Section, the following
conditions shall apply:
(a) The Trustee shall have approval rights over the document
appointing such Defeasance Agent and the document setting forth such
Defeasance Agent's rights and responsibilities; and
(b) The Defeasance Agent shall provide verification to the
Trustee acknowledging receipt of sufficient money and/or U.S.
Government Obligations to meet the applicable conditions set forth in
this Section 11.05.
SECTION 11.06. Reinstatement.
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If the Trustee or any Defeasance Agent is unable to apply any
money in accordance with Section 11.05 by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 11.05 until
such time as the Trustee or any Defeasance Agent is permitted to apply all such
money in accordance with Section 11.05.
ARTICLE XII.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of (or premium,
if any) or interest on any Security, or for any claim based thereon or otherwise
in respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture, or in any Security, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer, employee or director, as such, past, present
or future, of the Company or of any successor Person to the Company, either
directly or through the Company, any constitution, statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Securities.
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors.
All the covenants, stipulations, promises and agreements in
this Indenture contained by the Company shall bind its successors and assigns
whether so expressed or not.
SECTION 13.02. Official Acts by Successor Corporation.
Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
effect by the like board, committee or officer of any corporation that shall at
the time be the lawful sole successor of the Company.
SECTION 13.03. Surrender of Company Powers.
The Company by instrument in writing executed by authority of
two-thirds (2/3) of its Board of Directors and delivered to the Trustee may
surrender any of the powers
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reserved to the Company, and thereupon such power so surrendered shall terminate
both as to the Company and as to any successor Person.
SECTION 13.04. Address for Notices, etc.
Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the holders
of Securities on the Company may be given or served by being deposited postage
prepaid by registered or certified mail in a post office letter box addressed
(until another address is filed by the Company with the Trustee for the purpose)
to the Company, Metro Center, One Station Place, Stamford, CT 06902, Attention:
Jane T. Wiznitzer, Vice President-Legal Affairs and Secretary. Any notice,
direction, request or demand by any Securityholder to or upon the Trustee shall
be deemed to have been sufficiently given or made, for all purposes, if given or
made in writing at the office of the Trustee, The Chase Manhattan Bank, 450 West
33rd Street, 15th Floor, New York, New York 10001, Attention: Global Trust
Services.
SECTION 13.05. Governing Law.
This Indenture and each Security shall be governed by and
construed and interpreted in accordance with the laws of the State of New York,
without regard to conflicts of laws principles thereof.
SECTION 13.06. Evidence of Compliance with Conditions Precedent.
Upon any application or demand by the Company to the Trustee
to take any action under any of the provisions of this Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating that in the
opinion of the signers all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (1) a statement that the Person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based; (3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
SECTION 13.07. Business Days.
In any case where the date of payment of principal of (or
premium, if any) or interest on the Securities will not be a Business Day, the
payment of such principal of (or premium, if any) or interest on the Securities
need not be made on such date but may be made on the next succeeding Business
Day, with the same force and effect as if made on the date of payment and no
interest shall accrue for the period from and after such date.
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SECTION 13.08. Trust Indenture Act of 1939 to Control.
If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with another provision included in this Indenture
which is required to be included in this Indenture by any of Sections 310 to
317, inclusive, of the Trust Indenture Act of 1939, such required provision
shall control.
SECTION 13.09. Table of Contents, Headings, etc.
The table of contents and the titles and headings of the
articles and sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 13.10. Execution in Counterparts.
This Indenture may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together
constitute but one and the same instrument.
SECTION 13.11. Separability.
In case any one or more of the provisions contained in this
Indenture or in the Securities shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Indenture or of
the Securities, but this Indenture and the Securities shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 13.12. Assignment.
The Company will have the right at all times to assign any of
its rights or obligations under this Indenture to a direct or indirect wholly
owned Subsidiary of the Company, provided, that, in the event of any such
assignment, the Company will remain liable for all such obligations. Subject to
the foregoing, the Indenture is binding upon and inures to the benefit of the
parties thereto and their respective successors and assigns. This Indenture may
not otherwise be assigned by the parties hereto.
SECTION 13.13. Acknowledgment of Rights.
The Company acknowledges that, with respect to any Securities
held by Trenwick Capital Trust I or a trustee of such trust, if the Property
Trustee of such trust fails to enforce its rights under this Indenture as the
holder of the Securities held as the assets of Trenwick Capital Trust I, any
holder of Capital Securities may institute legal proceedings directly against
the Company to enforce such Property Trustee's rights under this Indenture
without first instituting any legal proceedings against such Property Trustee or
any other Person. Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Company to pay principal of (or premium, if any) or interest on the Securities
when due, the Company acknowledges that a holder of Capital Securities may
directly institute a proceeding for enforcement of payment to such
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holder of the principal of (or premium, if any) or interest on the Securities
having a principal amount equal to the aggregate liquidation amount of the
Capital Securities of such holder on or after the respective due date specified
in the Securities.
ARTICLE XIV.
CONDITIONAL RIGHT TO SHORTEN MATURITY;
PREPAYMENT OF SECURITIES -- NO SINKING FUND
SECTION 14.01. Special Event Prepayment.
If a Special Event has occurred and is continuing, then the
Company shall have the right, notwithstanding Section 14.02(a) but subject to
Section 14.02(b), upon (i) not less than 45 days written notice to the Trustee
and (ii) not less than 30 days nor more than 60 days written notice to the
Securityholders, to prepay the Securities, in whole (but not in part), at any
time within 90 days following the occurrence of such Special Event, at the
Special Event Prepayment Price. Following a Special Event, if the Company elects
to effect a prepayment, the Company shall take such action as is necessary
promptly to determine the Special Event Prepayment Price, including without
limitation the appointment by the Company of a Quotation Agent. The Special
Event Prepayment Price shall be paid prior to 12:00 noon, New York City time, on
the date of such prepayment or such earlier time as the Company determines,
provided, that the Company shall deposit with the Trustee an amount sufficient
to pay the Special Event Prepayment Price by 10:00 a.m., New York City time, on
the date such Special Event Prepayment Price is to be paid.
SECTION 14.02. Optional Prepayment by Company.
(a) Subject to the provisions of this Article XIV, the Company
shall have the right to prepay the Securities, in whole or in part, from time to
time, on or after February 1, 2007, at the optional prepayment price equal to
the outstanding principal amount of the Securities to be prepaid, plus accrued
and unpaid interest thereon (including Compounded Interest and Additional
Interest, if any) and any Additional Sums to the applicable date of prepayment
(the "Optional Prepayment Price").
If the Securities are only partially prepaid pursuant to this
Section 14.02, the Securities to be prepaid will be chosen pro rata or by lot or
by any other method utilized by the Trustee; provided, that, as to Securities
registered as a Global Security at the time of prepayment, the Depositary shall
determine, in accordance with its procedures, the principal amount of such
Securities held by each beneficial owner of such Securities to be prepaid. The
Optional Prepayment Price shall be paid prior to 12:00 noon, New York City time,
on the date of such prepayment or at such earlier time as the Company
determines, provided, that the Company shall deposit with the Trustee an amount
sufficient to pay the Optional Prepayment Price by 10:00 a.m., New York time, on
the date such Optional Prepayment Price is to be paid.
(b) Notwithstanding the first sentence of Section 14.02(a),
upon the entry of an order for dissolution of Trenwick Capital Trust I by a
court of competent jurisdiction, the Securities thereafter will be subject to
optional prepayment, in whole only, but
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not in part, on or after February 1, 2007, at the optional prepayment price set
forth in Section 14.02(a) and otherwise in accordance with this Article XIV.
SECTION 14.03. No Sinking Fund.
The Securities are not entitled to the benefit of any sinking
fund.
SECTION 14.04. Notice of Prepayment; Selection of Securities.
In case the Company shall desire to exercise the right to
prepay all, or, as the case may be, any part of the Securities in accordance
with their terms, it shall fix a date for prepayment and shall mail a notice of
such prepayment at least 30 and not more than 60 days prior to the date fixed
for prepayment to the holders of Securities so to be prepaid as a whole or in
part at their last addresses as the same appear on the Security Register. Such
mailing shall be by first class mail. The notice if mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice. In any case, failure to give such notice by
mail or any defect in the notice to the holder of any Security designated for
prepayment as a whole or in part shall not affect the validity of the
proceedings for the prepayment of any other Security.
Each such notice of prepayment shall specify the CUSIP number
of the Securities to be prepaid, the date fixed for prepayment, the prepayment
price at which the Securities are to be prepaid (or the method by which such
prepayment price is to be calculated), the place or places of payment that
payment will be made upon presentation and surrender of the Securities, that
interest accrued to the date fixed for prepayment will be paid as specified in
said notice, and that on and after said date interest thereon or on the portions
thereof to be prepaid will cease to accrue. If less than all the Securities are
to be prepaid the notice of prepayment shall specify the numbers of the
Securities to be prepaid. In case any Security is to be prepaid in part only,
the notice of prepayment shall state the portion of the principal amount thereof
to be prepaid and shall state that on and after the date fixed for prepayment,
upon surrender of such Security, a new Security or Securities in principal
amount equal to the unprepaid portion thereof will be issued.
Prior to 10:00 a.m., New York City time, on the prepayment
date specified in the notice of prepayment given as provided in this Section,
the Company will deposit with the Trustee or with one or more paying agents an
amount of money sufficient to prepay on the prepayment date all the Securities
so called for prepayment at the appropriate Prepayment Price, together with
accrued interest to the date fixed for prepayment.
The Company will give the Trustee notice not less than 45 days
prior to the prepayment date as to the aggregate principal amount of Securities
to be prepaid and the Trustee shall select, in such manner as in its sole
discretion it shall deem appropriate and fair, the Securities or portions
thereof (in integral multiples of $1,000, except as otherwise set forth in the
applicable form of Security) to be prepaid.
SECTION 14.05. Payment of Securities Called for Prepayment.
If notice of prepayment has been given as provided in Section
14.04, the Securities or portions of Securities with respect to which such
notice has been given shall
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become due and payable on the date and at the place or places stated in such
notice at the applicable Prepayment Price, together with interest accrued to the
date fixed for prepayment (subject to the rights of holders of Securities on the
close of business on a Regular Record Date in respect of an Interest Payment
Date occurring on or prior to the prepayment date), and on and after said date
(unless the Company shall default in the payment of such Securities at the
Prepayment Price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for prepayment shall cease to
accrue. On presentation and surrender of such Securities at a place of payment
specified in said notice, the said Securities or the specified portions thereof
shall be paid and prepaid by the Company at the applicable Prepayment Price,
together with interest accrued thereon to the date fixed for prepayment (subject
to the rights of holders of Securities on the close of business on a Regular
Record Date in respect of an Interest Payment Date occurring on or prior to the
prepayment date).
Upon presentation of any Security prepaid in part only, the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations, in principal amount equal to the
unprepaid portion of the Security so presented.
SECTION 14.06. Conditional Right to Shorten Maturity.
If a Tax Event occurs, then the Company will have the right,
prior to the termination of the Trust, either (i) to shorten the Stated Maturity
of the Securities to the minimum extent required, but not to a date earlier than
20 years from the date of original issuance of Securities under this Indenture,
such that, in the written opinion of counsel experienced in such matters
delivered to the Company, after shortening the Stated Maturity, interest paid on
the Securities shall be deductible for federal income tax purposes (the action
referred to above being referred to herein as a "Tax Event Maturity Shortening")
or (ii) to prepay the Securities. The circumstances under which the Company has
the right to prepay the Securities in connection with a Tax Event is referred to
herein as a "Conditional Tax Redemption Event" and, since a Conditional Tax
Redemption Event is deemed to be a Special Event, the Securities shall then be
subject to prepayment in accordance with the provisions of Section 14.01.
ARTICLE XV.
SUBORDINATION OF SECURITIES
SECTION 15.01. Agreement to Subordinate.
The Company covenants and agrees, and each holder of
Securities issued hereunder likewise covenants and agrees, that the Securities
shall be issued subject to the provisions of this Article XV; and each holder of
a Security, whether upon original issue or upon transfer or assignment thereof,
accepts and agrees to be bound by such provisions.
The payment by the Company of the principal of (and premium,
if any) and interest on all Securities issued hereunder shall, to the extent and
in the manner hereinafter set forth, be subordinated and junior in right of
payment to the prior payment in full of the Senior Indebtedness, whether
outstanding at the date of this Indenture or thereafter incurred.
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No provision of this Article XV shall prevent the occurrence
of any Default or Event of Default hereunder.
SECTION 15.02. Default on Senior Indebtedness.
In the event and during the continuation of any default by the
Company in the payment of principal, premium, interest or any other payment due
on any Senior Indebtedness, or in the event that the maturity of any Senior
Indebtedness has been accelerated because of a default, or if any judicial
proceeding shall be pending with respect to any such default, then, in any case,
no payment shall be made by the Company with respect to the principal (including
prepayment) of or premium, if any, or interest on the Securities.
In the event of the acceleration of the maturity of the
Securities, then no payment shall be made by the Company with respect to the
principal (including prepayments) of or premium, if any, or interest on the
Securities until the holders of all Senior Indebtedness outstanding at the time
of such acceleration shall receive payment in full of all amounts due in respect
of such Senior Indebtedness (including any amounts due upon acceleration).
In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section 15.02, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent of the amounts due in respect of such Senior Indebtedness and only to the
extent that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing, within 90 days of
such payment, of the amounts then due and owing on such Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of such Senior Indebtedness.
SECTION 15.03. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding-up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company on
account of the principal (and premium, if any) or interest on the Securities;
and upon any such dissolution or winding-up or liquidation or reorganization,
any payment by the Company, or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the
Securityholders or the Trustee would be entitled to receive from the Company,
except for the provisions of this Article XV, shall be paid by the Company or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Securityholders or by the Trustee
under this Indenture if received by them or it, directly to the holders of
Senior Indebtedness of the Company (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, as calculated by
the Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any
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instruments evidencing such Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay such Senior
Indebtedness in full, in money or money's worth, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness, before any payment or distribution is made to the Securityholders
or to the Trustee.
In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee before all amounts in respect of Senior Indebtedness is paid in
full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of such Senior Indebtedness
or their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, and their respective interests may appear, as
calculated by the Company, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all amounts due in
respect of such Senior Indebtedness in full in money in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for
the benefit of the holders of such Senior Indebtedness.
For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XV with respect
to the Securities to the payment of Senior Indebtedness that may at the time be
outstanding, provided, that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the sale,
conveyance, transfer or lease of its property as an entirety, or substantially
as an entirety, to another Person upon the terms and conditions provided for in
Article X of this Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 15.03 if such
other Person shall, as a part of such consolidation, merger, sale, conveyance,
transfer or lease, comply with the conditions stated in Article X of this
Indenture. Nothing in Section 15.02 or in this Section 15.03 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 6.06 of this
Indenture.
SECTION 15.04. Subrogation.
Subject to the payment in full of all amounts due in respect
of Senior Indebtedness, the rights of the Securityholders shall be subrogated to
the rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company, as the case may
be, applicable to such Senior Indebtedness until the principal of (and premium,
if any) and interest on the Securities shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the holders of
such Senior Indebtedness of any cash, property or securities to which the
Securityholders or the Trustee would be entitled except for the provisions of
this Article XV, and no payment over pursuant to the provisions of this Article
XV to or for the benefit of the holders of such Senior
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Indebtedness by Securityholders or the Trustee, shall, as between the Company,
its creditors other than holders of Senior Indebtedness of the Company, and the
holders of the Securities, be deemed to be a payment by the Company to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Article XV are and are intended solely for the purposes of defining the
relative rights of the holders of the Securities, on the one hand, and the
holders of such Senior Indebtedness, on the other hand.
Nothing contained in this Article XV or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness of the
Company, and the holders of the Securities, the obligation of the Company, which
is absolute and unconditional, to pay to the holders of the Securities the
principal of (and premium, if any) and interest on the Securities as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the holders of the Securities
and creditors of the Company, as the case may be, other than the holders of
Senior Indebtedness of the Company, as the case may be, nor shall anything
herein or therein prevent the Trustee or the holder of any Security from
exercising all remedies otherwise permitted by applicable law upon a Default
under this Indenture, subject to the rights, if any, under this Article XV of
the holders of such Senior Indebtedness in respect of cash, property or
securities of the Company, as the case may be, received upon the exercise of any
such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article XV, the Trustee, subject to the provisions of
Article VI of this Indenture, and the Securityholders shall be entitled
conclusively to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Securityholders, for
the purposes of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, as the case may be, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article XV.
SECTION 15.05. Trustee to Effectuate Subordination.
Each Securityholder by such Securityholder's acceptance
thereof authorizes and directs the Trustee on such Securityholder's behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article XV and appoints the Trustee such
Securityholder's attorney-in-fact for any and all such purposes.
SECTION 15.06. Notice by the Company.
The Company shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Company that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article XV. Notwithstanding the
provisions of this Article XV or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Securities pursuant to the provisions of this Article XV, unless
and until a Responsible Officer of the Trustee shall have received written
notice thereof from the Company or a holder or
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holders of Senior Indebtedness or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Article VI of this Indenture, shall be entitled in all respects to assume that
no such facts exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Section 15.06 at least three Business
Days prior to the date upon which by the terms hereof any money may become
payable for any purpose (including, without limitation, the payment of the
principal of (or premium, if any) or interest on any Security), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such money and to apply the same to the purposes
for which they were received, and shall not be affected by any notice to the
contrary that may be received by it within three Business Days prior to such
date.
The Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled conclusively to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness of the Company (or a trustee on behalf of such holder), to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article XV, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article XV, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Upon any payment or distribution of assets of the Company
referred to in this Article XV, the Trustee and the Securityholders shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
custodian, receiver, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Trustee or to the
Securityholders, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XV.
SECTION 15.07. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article XV in respect of any Senior
Indebtedness at any time held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the
Company, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article XV, and
no implied covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of such Senior
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Indebtedness and, subject to the provisions of Article VI of this Indenture, the
Trustee shall not be liable to any holder of such Senior Indebtedness if it
shall pay over or deliver to Securityholders, the Company or any other Person
money or assets to which any holder of such Senior Indebtedness shall be
entitled by virtue of this Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.06.
SECTION 15.08. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof that any
such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may, at any time
and from time to time, without the consent of or notice to the Trustee or the
Securityholders, without incurring responsibility to the Securityholders and
without impairing or releasing the subordination provided in this Article XV or
the obligations hereunder of the holders of the Securities to the holders of
such Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness, or otherwise amend or supplement in any manner
such Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any manner
for the collection of such Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Company and any other Person.
ARTICLE XVI.
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 16.01. Extension of Interest Payment Period.
(a) So long as no Event of Default has occurred and is
continuing, the Company shall have the right, at any time and from time to time
during the term of the Securities, to defer payments of interest by extending
the interest payment period of such Securities for a period not exceeding 10
consecutive semi-annual periods, including the first such semi-annual period
during such extension period (as set forth in Section 16.02(c)) (the "Extension
Period"), during which Extension Period no interest shall be due and payable,
provided, that no Extension Period may extend beyond the Stated Maturity. To the
extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
this Section 16.01, will bear interest thereon at the Coupon Rate compounded
semi-annually for each semi-annual period of the Extension Period ("Compounded
Interest"). At the end of the Extension Period, the Company
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shall pay all interest accrued and unpaid on the Securities, including any
Additional Sums and Compounded Interest (together, "Deferred Interest") that
shall be payable to the holders of the Securities in whose names the Securities
are registered in the Security Register on the first record date immediately
preceding the end of the Extension Period.
(b) During any such Extension Period, the Company may not, and
may not permit any Subsidiary to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock), (ii) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Company
(including Other Debentures) that rank pari passu with or junior in right of
payment to the Securities or (iii) make any guarantee payments with respect to
any guarantee by the Company of the debt securities of any Subsidiary of the
Company if such guarantee ranks pari passu with or junior in right of payment to
the Securities (other than (a) dividends or distributions in shares of or
options, warrants or rights to subscribe for or purchase shares of, common stock
of the Company, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the prepayment or repurchase of any such rights
pursuant thereto, (c) payments under the Capital Securities Guarantee, (d) as a
direct result of, and only to the extent necessary to avoid the issuance of
fractional shares of the Company's capital stock following, a reclassification
of the Company's capital stock or the exchange or conversion of one class or
series of the Company's capital stock for another class or series of the
Company's capital stock, (e) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, and (f)
purchases of common stock related to the issuance of common stock or rights
under any of the Company's benefit plans for its directors, officers or
employees or any of the Company's dividend reinvestment plans). None of the
Company's Subsidiaries will be prohibited from declaring and paying cash
distributions with respect to its capital stock or from making payments with
respect to its debt securities.
(c) Before the termination of any such Extension Period, and
so long as no Event of Default has occurred and is continuing, the Company may
further defer payments of interest by further extending such period, provided,
that such period, together with all such previous and further extensions within
such Extension Period, shall not exceed 10 consecutive semi-annual periods,
including the first such semi-annual period during such Extension Period, or
extend beyond the Stated Maturity. Upon the termination of any Extension Period
and the payment of all Deferred Interest then due, the Company may elect to
commence a new Extension Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extension Period, except at the end
thereof, but the Company may prepay at any time all or any portion of the
interest accrued during an Extension Period.
SECTION 16.02. Notice of Extension.
(a) If the Property Trustee is the only registered holder of
the Securities at the time the Company selects an Extension Period, the Company
shall give written notice to the Administrative Trustees, the Property Trustee
and the Trustee of its selection of such Extension Period at least 5 Business
Days before the earlier of (i) the next succeeding date on which distributions
on the Trust Securities issued by Trenwick Capital Trust I are payable, or (ii)
the date the Trust is required to give notice of the record date, or the date
such
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<PAGE> 71
Distributions are payable, to any national securities exchange or to holders of
the Capital Securities issued by the Trust, but in any event at least 5 Business
Days before such record date.
(b) If the Property Trustee is not the only holder of the
Securities at the time the Company selects an Extension Period, the Company
shall give the holders of the Securities and the Trustee written notice of its
selection of such Extension Period at least 10 Business Days before the earlier
of (i) the next succeeding Interest Payment Date, or (ii) the date the Company
is required to give notice of the record or payment date of such interest
payment to any national securities exchange.
(c) The semi-annual period in which any notice is given
pursuant to paragraphs (a) or (b) of this Section 16.02 shall be counted as one
of the 10 semi-annual periods permitted in the maximum Extension Period
permitted under Section 16.01. There is no limitation on the number of times
that the Company may elect to begin an Extension Period.
The Chase Manhattan Bank hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed by their respective officers thereunto duly
authorized, as of the day and year first above written.
TRENWICK GROUP INC.
By: /s/ James F. Billett, Jr.
-----------------------------------
James F. Billett, Jr.
Chairman, President and Chief
Executive Officer
THE CHASE MANHATTAN BANK, as Trustee
By: /s/ G. McFarlane
-----------------------------------
G. McFarlane
Vice President
<PAGE> 73
EXHIBIT A
(FORM OF FACE OF SECURITY)
[IF THE SECURITY IS A GLOBAL SECURITY, INSERT: THIS SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY.
THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A
TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS (A) THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND (B) ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DTC (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
1
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No. ________ CUSIP No. ________
TRENWICK GROUP INC.
8.82% EXCHANGE JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE FEBRUARY 1, 2037
Trenwick Group Inc., a Delaware corporation (the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to
____________________________, or registered assigns, the principal sum of
____________________________________________U.S. dollars ($____________) on
February 1, 2037 (the "Stated Maturity"), unless the Stated Maturity is
shortened under certain circumstances described herein or this Debenture is
previously prepaid, and to pay interest on the outstanding principal amount
hereof from January 31, 1997, or from the most recent interest payment date
(each such date, an "Interest Payment Date") to which interest has been paid or
duly provided for, semi-annually (subject to deferral as set forth herein) in
arrears on February 1 and August 1 of each year, commencing August 1, 1997, at
the rate of 8.82% per annum until the principal hereof shall have become due and
payable, and on any overdue principal and premium, if any, and (without
duplication and to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the same rate per
annum compounded semi-annually. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve 30-day
months and, for any period less than 6 months, the actual months elapsed and the
actual days elapsed in a partial month in such period. In the event that any
date on which the principal of (or premium, if any) or interest on this Security
is payable is not a Business Day, then payment payable on such date will be made
on the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), with the same force and effect as
if made on such date.
The interest installment so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities, as defined in said Indenture) is registered at the close
of business on the Regular Record Date for such interest installment, which
shall be the 15th day preceding the relevant interest payment date. Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the holders on such Regular Record Date and may be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a special record date to
be fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the holders of Securities not less than 10 days prior
to such special record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice as maybe required by
such exchange, all as more fully provided in the Indenture.
The principal of (and premium, if any) and interest on this
Security shall be payable at the office or agency of the Trustee maintained for
that purpose in any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
Company by (i) check mailed to the holder at such address as shall appear in the
Security Register or (ii) by transfer to an account maintained by the Person
entitled
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<PAGE> 75
thereto, provided, that proper written transfer instructions have been received
by the relevant record date. Notwithstanding the foregoing, so long as the
Holder of this Security is the Property Trustee, the payment of the principal of
(and premium, if any) and interest on this Security will be made at such place
and to such account as may be designated by the Property Trustee.
The indebtedness evidenced by this Security is unsecured and,
to the extent provided in the Indenture, subordinate and junior in right of
payment to the prior payment in full of Senior Indebtedness, and this Security
is issued subject to the provisions of the Indenture with respect thereto. Each
holder of this Security, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee on his or her behalf
to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
By its acceptance hereof, the Holder agrees to be bound by the
terms of the Registration Rights Agreement.
This Security shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
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<PAGE> 76
The provisions of this Security are continued on the reverse
side hereof and such provisions shall for all purposes have the same effect as
though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to
he executed.
Dated: __________________
TRENWICK GROUP INC.
By: _____________________________
Name:
Title:
Attest:
By: _______________________________
Name:
Title:
4
<PAGE> 77
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the
within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By: _____________________________
Authorized Officer
5
<PAGE> 78
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Company (herein
sometimes referred to as the "Securities"), specified in the Indenture, all
issued or to be issued under and pursuant to an Indenture, dated as of January
31, 1997 (the "Indenture"), duly executed and delivered between the Company and
The Chase Manhattan Bank, as Trustee (the "Trustee"), to which Indenture
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Securities.
Upon the occurrence and continuation of a Special Event, the
Company shall have the right to prepay this Security in whole (but not in part)
at the Special Event Prepayment Price. "Special Event Prepayment Price" shall
mean, with respect to any prepayment of the Securities following a Special
Event, an amount in cash equal to the greater of (i) 100% of the principal
amount to be prepaid or (ii) the sum, as determined by a Quotation Agent, of the
present values of the remaining scheduled payments of principal and interest
thereon to February 1, 2007, the first day on which this Security is subject to
optional prepayment, discounted to the prepayment date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months and, for any period
less than 6 months, the actual months elapsed and the actual days elapsed in a
partial month in such period) at the Adjusted Treasury Rate, plus, in each case,
any accrued and unpaid interest thereon, including Compounded Interest,
Additional Interest and Additional Sums, if any, to the date of such prepayment.
In addition, the Company shall have the right to prepay this
Security, in whole or in part, at any time on or after February 1, 2007 (an
"Optional Prepayment"), at the Optional Prepayment Price equal to the principal
amount of this Security plus accrued and unpaid interest thereon (including
Compounded Interest and Additional Sums, if any) to the applicable date of
prepayment.
The Special Event Prepayment Price and the Optional Prepayment
Price, as the case requires, shall be paid prior to 12:00 noon, New York time,
on the date of such prepayment or at such earlier time as the Company
determines, provided, that the Company shall deposit with the Trustee an amount
sufficient to pay the applicable Prepayment Price by 10:00 a.m., New York City
time, on the date such Prepayment Price is to be paid. Any prepayment pursuant
to this paragraph will be made upon not less than 30 days nor more than 60 days
notice. If the Securities are only partially prepaid by the Company pursuant to
an Optional Prepayment, the Securities to be prepaid will be chosen by lot or by
any other method utilized by the Trustee; provided, that, as to Securities
registered as a Global Security at the time of prepayment, the Depositary shall
determine the particular Securities to be prepaid in accordance with its
procedures.
In the event of prepayment of this Security in part only, a
new Security or Securities for the unprepaid portion hereof will be issued in
the name of the holder hereof upon the cancellation hereof.
If a Tax Event occurs, then the Company will have the right,
prior to the termination of the Trust, either (i) to shorten the Stated Maturity
of this Security to the minimum extent, but not to a date earlier than 20 years
from the date of original issuance of
6
<PAGE> 79
Securities under the Indenture, such that, in the written opinion of counsel
experienced in such matters delivered to the Company, after shortening the
Stated Maturity, interest paid on the Securities shall be deductible for federal
income tax purposes or (ii) to prepay the Securities.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the Securities
may be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of a majority in principal amount
of the Securities at the time outstanding, as defined in the Indenture, to
execute supplemental indentures for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of modifying in any manner the rights of the holders of the Securities;
provided, however, that no such supplemental indenture shall, without the
consent of each holder of Securities then outstanding and affected thereby, (i)
extend the Stated Maturity of any Securities, or reduce the principal amount
thereof, or reduce any amount payable on prepayment thereof, or reduce the rate
or extend the time of payment of interest thereon (subject to Article XVI of the
Indenture), or make the principal of, or interest or premium on, the Securities
payable in any coin or currency other than U.S. dollars, or impair or affect the
right of any holder of Securities to institute suit for the payment thereof, or
(ii) reduce the aforesaid percentage of Securities, the holders of which are
required to consent to any such supplemental indenture. The Indenture also
contains provisions permitting the holders of a majority in principal amount of
the Securities at the time outstanding affected thereby, on behalf of all of the
holders of the Securities, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture, and its consequences, except a Default in the payment of the
principal of or premium, if any, or interest on any of the Securities or a
Default in respect of any covenant or provision under which the Indenture cannot
be modified or amended without the consent of each holder of Securities then
outstanding. Any such consent or waiver by the holder of this Security (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
Holder and upon all future holders and owners of this Security and of any
Security issued in exchange heretofore or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Security at the time and place and at the
rate and in the money herein prescribed.
As long as no Event of Default has occurred and is continuing,
the Company shall have the right, at any time and from time to time during the
term of the Securities, to defer payments of interest by extending the interest
payment period of such Securities for a period not exceeding 10 consecutive
semi-annual periods, including the first such semi-annual period during such
extension period (an "Extension Period"), during which Extension Period no
interest shall be due and payable, provided, that no Extension Period may extend
beyond the Stated Maturity of the Securities. At the end of the Extension
Period, the Company shall pay all interest then accrued and unpaid, together
with deferred interest thereon at the rate specified for the Securities (to the
extent that payment of such interest is enforceable
7
<PAGE> 80
under applicable law). Before the termination of any such Extension Period, and
so long as no Event of Default has occurred and is continuing, the Company may
further defer payments of interest by further extending such Extension Period,
provided, that such Extension Period, together with all such previous and
further extensions within such Extension Period, shall not exceed 10 consecutive
semi-annual periods, including the first semi-annual period during such
Extension Period, or extend beyond the Stated Maturity of the Securities. Upon
the termination of any such Extension Period and the payment of all accrued and
unpaid interest and any additional amounts then due, the Company may commence a
new Extension Period, subject to the foregoing requirements.
The Company has agreed that, if at any time (i) there shall
have occurred any event of which the Company has actual knowledge that (a) is,
or with the giving of notice or the lapse of time, or both, would be, an Event
of Default and (b) in respect of which the Company shall not have taken
reasonable steps to cure, (ii) if such Securities are held by Trenwick Capital
Trust I, the Company shall be in default with respect to its payment of any
obligations under the Capital Securities Guarantee, or (iii) the Company shall
have given notice of its election of the exercise of its right to extend the
interest payment period and any such extension shall be continuing, then the
Company will not, and will not permit any Subsidiary to,
(i) declare or pay any dividends or distributions on, or
prepay, purchase, acquire, or make a liquidation payment with
respect to, any of the Company's capital stock) (which includes
common and preferred stock);
(ii) make any payment of principal, interest or premium,
if any, on or repay or repurchase or prepay any debt securities of
the Company that rank pari passu with or junior in right of payment
to the Securities; or
(iii) make any guarantee payments with respect to any
guarantee by the Company of the debt securities or any Subsidiary
of the Company if such guarantee ranks pari passu or junior in
right of payment to the Securities
other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, Common Stock of the Company, (b)
any declaration of a dividend in connection with the implementation of a
stockholder rights plan, or the issuance of stock under any such plan in the
future, or the prepayment or repurchase of any such rights pursuant thereto, (c)
payments under the Capital Securities Guarantee, (d) as a direct result of, and
only to the extent necessary to avoid the issuance of fractional shares of the
Company's capital stock following, a reclassification of the Company's capital
stock or the exchange or the conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock, (e)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the exchange or conversion of such capital stock or the security
being exchanged or converted, and (f) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Company's benefit plans for
its directors, officers or employees or any of the Company's dividend
reinvestment plans. None of the Company's Subsidiaries will be prohibited from
declaring and paying cash distributions with respect to its capital stock or
from making payments with respect to its debt securities.
8
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The Company will have the right at any time to dissolve
Trenwick Capital Trust I and cause the Securities to be distributed to the
holders of the Trust Securities in liquidation of Trenwick Capital Trust I,
subject to the provisions of the Indenture requiring the receipt of certain
legal opinions.
The Securities are issuable only in registered form without
coupons in denominations of $1,000.00 and any integral multiple thereof. As
provided in the Indenture, this Security is transferable by the holder hereof on
the Security Register of the Company, upon surrender of this Security for
registration of transfer at the office or agency of the Trustee in the City and
State of New York accompanied by a written instrument or instruments of transfer
in form satisfactory to the Company or the Trustee duly executed by the holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Securities of authorized denominations and for the same aggregate principal
amount and series will be issued to the designated transferee or transferees. No
service charge will be made for any such transfer, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in relation thereto.
Prior to due presentment for registration of transfer of this
Security, the Company, the Trustee, any paying agent and the registrar may deem
and treat the holder hereof as the absolute owner hereof (whether or not this
Security shall be overdue and notwithstanding any notice of ownership or writing
hereon made by anyone other than the Security registrar) for the purpose of
receiving payment of or on account of the principal hereof and premium, if any,
and interest due hereon and for all other purposes, and neither the Company nor
the Trustee nor any paying agent nor any registrar shall be affected by any
notice to the contrary.
No recourse shall be had for the payment of the principal of
or premium, if any, or interest on this Security, or for any claim based hereon,
or otherwise in respect hereof, or based on or in respect of the Indenture,
against any incorporator, stockholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor Person,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issuance
hereof, expressly waived and released.
All terms used in this Security that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAW PROVISIONS THEREOF.
9
<PAGE> 82
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
agent to transfer this 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 Security
Certificate)
Signature Guarantee:
________________________
* Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities and Exchange Act of 1934, as amended.
10
<PAGE> 1
EXHIBIT 4.3
CERTIFICATE OF TRUST
OF
TRENWICK CAPITAL TRUST I
This certificate of trust of Trenwick Capital Trust I (the "Trust"),
dated as of January 21, 1997, is being duly executed and filed by the
undersigned, as Delaware trustee, to create a business trust under the Delaware
Business Trust Act (12 Del. C. Section 3801, et. seg.).
1. Name. The name of the business trust being created hereby is
Trenwick Capital Trust I.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are as
follows:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, DE 19801
3. Effective Date. This Certificate of Trust shall be effective as of
its filing.
IN WITNESS WHEREOF, the undersigned, being the Delaware trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
CHASE MANHATTAN BANK DELAWARE,
Not in its individual capacity
but solely as Delaware Trustee
By /s/ John J. Cashin
------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 07:55 PM 01/21/1997
971020385-2708779
<PAGE> 1
EXHIBIT 4.4
DECLARATION OF TRUST
OF
TRENWICK CAPITAL TRUST I
THIS DECLARATION OF TRUST ("Declaration") dated and effective as of
January 21, 1997 by the Trustee (as defined herein), the Sponsor (as defined
herein), and by the holders from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustee and the Sponsor desire to establish Trenwick
Capital Trust I (the "Trust") pursuant to the Delaware Business Trust Act for
the purpose of (a) selling Securities (as defined herein), (b) using the
proceeds from the sale of the Securities to purchase debentures of the Sponsor,
(c) making distributions to holders of the Securities, and (d) engaging only in
activities necessary, advisable or incidental to any of the foregoing.
NOW, THEREFORE, it being the intention of the parties hereto that the
Trust constitute a business trust under the Delaware Business Trust Act and that
this Declaration constitute the governing instrument of such business trust.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration of Trust as modified, supplemented or amended
from time to time;
(d) all references in this Declaration to Articles and Sections are
to Articles and Sections of this Declaration unless otherwise
specified; and
(e) 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.
<PAGE> 2
"Certificate of Trust" shall mean the certificate of trust to be
filed pursuant to Section 3810 of the Delaware Business Trust Act.
"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.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code 12 Del. Code [Section] 3801 et seq., as it may be amended from
time to time, or any successor legislation.
"Indemnified Person" has the meaning set forth in Section 4.3
hereof.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Security" means a security representing an undivided beneficial
interest in the assets of the Trust having such rights and with terms as may be
set out in this Declaration or in any amendment or restatement hereof.
"Sponsor" means Trenwick Group Inc. in its capacity as sponsor of
the Trust.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue as a trustee in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustee in accordance with the
provisions hereof, and references herein to a Trustee or the Trustee shall refer
to such Person or Persons solely in their capacity as trustees hereunder.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "Trenwick Capital
Trust I." The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Trustee.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o Trenwick
Group Inc., Metro Center, One Station Place, Stamford, Connecticut 06902,
Attention: Chief Financial Officer. At any time, the Sponsor may designate
another principal office of the Trust.
2
<PAGE> 3
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a) selling
Securities, (b) using the proceeds from the sale of the Securities to purchase
debentures of the Sponsor, (c) making distributions to holders of the
Securities, and (d) engaging only in activities necessary, advisable or
incidental to any of the foregoing.
SECTION 2.4 Declaration and Authority.
(a) The Trustee declares 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.
The Sponsor hereby contributes the sum of $10 to be held by the Trustee
hereunder and to which all other assets of the Trust, from time to time,
shall be added.
(b) Subject to the limitations provided in this Declaration, the
Sponsor shall have exclusive and complete authority to instruct the Trustee
in carrying out the purposes of the Trust. An action taken by the Trustee
in accordance with such instructions shall constitute the act of and serve
to bind the Trust. In dealing with the Trustee acting on behalf of the
Trust, no Person shall be required to inquire into the authority of the
Trustee to bind the Trust. Persons dealing with the Trust are entitled to
rely conclusively on the power and authority of the Trustee as set forth in
this Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the Trust.
SECTION 2.6 Powers of the Trustee.
The Sponsor shall have the exclusive power and authority to cause
the Trustee to engage in the following activities:
(a) to issue and sell Securities in accordance with this
Declaration;
(b) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and provide for reasonable compensation for such services;
(c) to incur expenses which are necessary or incidental to carry out
any of the purposes of this Declaration; and
(d) 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.
SECTION 2.7 Filing of Certificate of Trust.
On the date of execution of this Declaration, the Trustee shall cause
the filing of the Certificate of Trust for the Trust in the form attached
hereto as Exhibit A with the Secretary of State of the State of Delaware.
3
<PAGE> 4
SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence until January 21, 2042.
SECTION 2.9 Responsibilities of the Sponsor.
The Sponsor shall have the exclusive right and responsibility to
cause the Trustee to issue and sell the Securities, the terms of which shall be
as adopted by resolution of the Sponsor.
SECTION 2.10 Declaration Binding on Securities Holders.
Every Person by virtue of having become a holder of a Security or
any interest therein 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 III
TRUSTEE
SECTION 3.1 Trustee.
The number of Trustees initially shall be one (1), and thereafter
the number of Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by the Sponsor and delivered to the Trustee. The
Sponsor is entitled to appoint or remove without cause any Trustee at any time;
provided, however, that one Trustee, in the case of a natural person, shall be
a person who is a resident of the State of Delaware or that, if not a natural
person, is an entity which has its principal place of business in the State of
Delaware.
SECTION 3.2 Trustee.
The initial Trustee shall be:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, DE 19801
(a) A Trustee may resign upon not less than 30 days written notice
to the Sponsor, which resignation shall take effect upon the later of
the date specified therein or the date on which a successor Trustee
appointed by the Sponsor pursuant to Section 3.1 has accepted such
appointment, provided, however, that such successor shall comply with
the provisions of [Section] 3807 of the Delaware Business Trust Act.
(b) A Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her
power for the purposes of signing any documents which the Trustee has
power and authority to cause the Trust to execute pursuant to Section
2.6.
4
<PAGE> 5
SECTION 3.3 NOT RESPONSIBLE FOR RECITALS OR SUFFICIENCY OF DECLARATION.
The recitals contained in this Declaration shall be taken as the
statements of the Sponsor, and the Trustee does not assume any responsibility
for their correctness. The Trustee makes no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustee makes
no representations as to the validity or sufficiency of this Declaration.
SECTION 3.4 COMPENSATION OF TRUSTEE.
The Sponsor agrees:
(a) to pay the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse
the Trustee upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any
provision of this Declaration (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith;
(c) To the fullest extent possible the parties intend that
Section 3561 of Title 12 of the Delaware Code shall not apply to the
Trust and that compensation paid pursuant to Section 3.6(a) not be
subject to review by any court under Section 3560 of Title 12 of the
Delaware Code.
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEE OR OTHERS
SECTION 4.1 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person
for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of the authority conferred on such Indemnified
Person by this Declaration or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's gross negligence or willful misconduct with
respect to such acts or omissions; and
(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
5
<PAGE> 6
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 4.2 Fiduciary Duty.
(a) To the extent that, at law or in equity,an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity,
are agreed by the parties hereto to replace such other duties and liabilities
of such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person shall act in
a manner that is, or provides terms that are, fair and reasonable to the Trust
or any holder of Securities, the Indemnified Person shall resolve such conflict
of interest, take such action or provide such terms, considering in each case
the relative interest of each party (including its own interest) to such
conflict, agreement, transaction or situation and the benefits and burdens
relating to such interests, any customary or accepted industry practices, and
any applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or term
so made, taken or provided by the Indemnified Person shall not constitute a
breach of this Declaration or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or otherwise;
and
(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
6
<PAGE> 7
(ii) in its "good faith" or another express standard, the Indemnified
Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 4.3 Indemnification.
The Sponsor agrees, to the fullest extent permitted by applicable law,
to indemnify and hold harmless (i) each Trustee, (ii) any Affiliate of any
Trustee, (iii) any officer, director, shareholder, employee, representative or
agent of any Trustee, and (iv) any employee or agent of the Trust or its
Affiliates, (referred to herein as an "Indemnified Person") from and against
any loss, damage, liability, tax, penalty, expense or claim of any kind or
nature whatsoever incurred by such Indemnified Person by reason of the
creation, operation or termination of the Trust or 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 negligence or willful misconduct with respect
to such acts or omissions.
SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the 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 or the 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 and the Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or
opportunity. Any Covered Person and the Trustee may engage or be interested in
any financial or other transaction with the Sponsor or any Affiliate of the
Sponsor or may act as depositary for, trustee or agent for or may act on any
committee or body of holders of, securities or other obligations of the Sponsor
or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issuance of any Securities, this Declaration may
be extended or restated by, and only by, a written instrument executed by the
Trustee and the Sponsor.
SECTION 5.2 Termination of Trust.
7
<PAGE> 8
(a) The Trust shall terminate and be of no further force or effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a Certificate of Dissolution or its
equivalent with respect to the Sponsor or the failure of
the Sponsor to revive its Charter within ten (10) days
following the revocation of the Sponsor's charter or of the
Trust's Certificate of Trust;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor, or the Trust;
(iv) before the issuance of any Securities, at the election of
the Sponsor; and
(v) upon the expiration of the period set forth in Section 2.8
hereof.
(b) as soon as is practicable after the occurrence of an event
referred to in Section 5.2(a), the Trustee shall file a
certificate of cancellation with the Secretary of State of the
State of Delaware.
SECTION 5.3 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. The provisions of Section 3540 of
Title 12 of the Delaware Code shall not apply to the Trust.
SECTION 5.4 HEADINGS.
Headings contained in this Declaration are inserted for convenience of
reference and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 5.5 SUCCESSORS AND ASSIGNS.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustee shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 5.6 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 5.7 COUNTERPARTS.
8
<PAGE> 9
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 party to one of such counterpart signature pages. All such counterpart
signature pages shall be read as though one, and they shall have the same force
and effect as though all of the signers had signed a single signature page.
9
<PAGE> 10
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year above written.
CHASE MANHATTAN BANK DELAWARE,
Not in its individual capacity but
solely as Delaware Trustee
By: /s/ JOHN J. CASHIN
------------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
TRENWICK GROUP INC., as Sponsor
By: /s/ JAMES F. BILLETT, JR.
-------------------------------------
Name: James F. Billett, Jr.
Title: Chairman, President & Chief
Executive Officer
10
<PAGE> 1
EXHIBIT 4.5
TRENWICK CAPITAL TRUST I
________________________________________
AMENDED AND RESTATED DECLARATION OF TRUST
Dated as of January 31, 1997
________________________________________
<PAGE> 2
TABLE OF CONTENTS
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ARTICLE I INTERPRETATION AND DEFINITIONS.................................................... 1
SECTION 1.1 Definitions.........................................................................1
ARTICLE II TRUST INDENTURE ACT.................................................................8
SECTION 2.1 Trust Indenture Act; Application....................................................8
SECTION 2.2 Lists of Holders of Securities......................................................9
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...................................................................... 11
SECTION 3.1 Name.............................................................................. 11
SECTION 3.2 Office............................................................................ 12
SECTION 3.3 Purpose........................................................................... 12
SECTION 3.4 Authority......................................................................... 12
SECTION 3.5 Title to Property of the Trust.................................................... 12
SECTION 3.6 Powers and Duties of the Administrative Trustees.................................. 12
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.............................. 15
SECTION 3.8 Powers and Duties of the Property Trustee......................................... 16
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee....................... 18
SECTION 3.10 Certain Rights of Property Trustee................................................ 19
SECTION 3.11 Delaware Trustee.................................................................. 21
SECTION 3.12 Not Responsible for Recitals or Issuance of Securities............................ 22
SECTION 3.13 Duration of Trust................................................................. 22
SECTION 3.14 Mergers........................................................................... 22
ARTICLE IV SPONSOR........................................................................... 23
SECTION 4.1 Sponsor's Purchase of Common Securities........................................... 23
SECTION 4.2 Responsibilities of the Sponsor................................................... 23
SECTION 4.3 Right to Proceed.................................................................. 24
ARTICLE V TRUSTEES.......................................................................... 24
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee..................................... 24
SECTION 5.2 Delaware Trustee.................................................................. 25
SECTION 5.3 Property Trustee; Eligibility..................................................... 25
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SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware
Trustee Generally................................................................. 26
SECTION 5.5 Administrative Trustees........................................................... 26
SECTION 5.6 Delaware Trustee.................................................................. 27
SECTION 5.7 Appointment, Removal and Resignation of Trustees.................................. 27
SECTION 5.8 Vacancies among Trustees.......................................................... 28
SECTION 5.9 Effect of Vacancies............................................................... 28
SECTION 5.10 Meetings.......................................................................... 29
SECTION 5.11 Delegation of Power............................................................... 29
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business....................... 29
SECTION 5.13 Undertaking for Costs............................................................. 29
ARTICLE VI DISTRIBUTIONS..................................................................... 30
SECTION 6.1 Distributions..................................................................... 30
ARTICLE VII ISSUANCE OF SECURITIES............................................................ 30
SECTION 7.1 General Provisions Regarding Securities........................................... 30
SECTION 7.2 Execution and Authentication...................................................... 31
SECTION 7.3 Form and Dating................................................................... 31
SECTION 7.4 Registrar and Paying Agent........................................................ 33
SECTION 7.5 Paying Agent to Hold Money in Trust............................................... 33
SECTION 7.6 Replacement Securities............................................................ 34
SECTION 7.7 Outstanding Capital Securities.................................................... 34
SECTION 7.8 Capital Securities in Treasury.................................................... 34
SECTION 7.9 Temporary Securities.............................................................. 34
SECTION 7.10 Cancellation...................................................................... 35
SECTION 7.11 CUSIP Numbers..................................................................... 36
ARTICLE VIII DISSOLUTION OF TRUST.............................................................. 36
SECTION 8.1 Dissolution of Trust.............................................................. 36
ARTICLE IX TRANSFER OF INTERESTS............................................................. 37
SECTION 9.1 Transfer of Securities............................................................ 37
SECTION 9.2 Transfer Procedures and Restrictions.............................................. 37
SECTION 9.3 Deemed Security Holders........................................................... 45
SECTION 9.4 Book-Entry Interests.............................................................. 45
SECTION 9.5 Notices to Clearing Agency........................................................ 46
SECTION 9.6 Appointment of Successor Clearing Agency.......................................... 46
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS................................................................ 46
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<S> <C> <C>
SECTION 10.1 Liability......................................................................... 46
SECTION 10.2 Exculpation....................................................................... 47
SECTION 10.3 Fiduciary Duty.................................................................... 47
SECTION 10.4 Indemnification................................................................... 48
SECTION 10.5 Outside Businesses................................................................ 51
ARTICLE XI ACCOUNTING........................................................................ 51
SECTION 11.1 Fiscal Year....................................................................... 51
SECTION 11.2 Certain Accounting Matters........................................................ 52
SECTION 11.3 Banking........................................................................... 52
SECTION 11.4 Withholding....................................................................... 52
ARTICLE XII AMENDMENTS AND MEETINGS........................................................... 53
SECTION 12.1 Amendments........................................................................ 53
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.................. 54
ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE AND
DELAWARE TRUSTEE.................................................................. 56
SECTION 13.1 Representations and Warranties of Property Trustee................................ 56
ARTICLE XIV REGISTRATION RIGHTS............................................................... 57
SECTION 14.1 Registration Rights Agreement; Additional Interest................................ 57
ARTICLE XV MISCELLANEOUS..................................................................... 59
SECTION 15.1 Notices........................................................................... 59
SECTION 15.2 Governing Law..................................................................... 60
SECTION 15.3 Intention of the Parties.......................................................... 60
SECTION 15.4 Headings.......................................................................... 60
SECTION 15.5 Successors and Assigns............................................................ 60
SECTION 15.6 Partial Invalidity................................................................ 61
SECTION 15.7 Counterparts...................................................................... 61
ANNEX I........................................................................................................ I-1
EXHIBIT A-1................................................................................................... A1-1
EXHIBIT A-2................................................................................................... A2-1
</TABLE>
iii
<PAGE> 5
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(c) ................................................................................... Inapplicable
311(c) ................................................................................... Inapplicable
312(a) ................................................................................... 2.2(a)
312(b) ................................................................................... 2.2(b)
313 ................................................................................... 2.3
314(a) ................................................................................... 2.4
314(b) ................................................................................... Inapplicable
314(c) ................................................................................... 2.5
314(d) ................................................................................... Inapplicable
314(f) ................................................................................... Inapplicable
315(a) ................................................................................... 3.9(b)
315(c) ................................................................................... 3.9(a)
315(d) ................................................................................... 3.9(a)
316(a) ................................................................................... Annex I
316(c) ................................................................................... 3.6(a)
</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.
iv
<PAGE> 6
AMENDED AND RESTATED DECLARATION OF TRUST
OF
TRENWICK CAPITAL TRUST I
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated as of January 31, 1997, among the Trustees (as defined herein) and the
Sponsor (as defined herein).
WHEREAS, the Delaware Trustee and the Sponsor established
Trenwick Capital Trust I (the "Trust"), a statutory business trust formed under
the Business Trust Act (as defined herein) pursuant to a Declaration of Trust
dated as of January 21, 1997 (the "Original Declaration"), and a Certificate of
Trust filed with the Secretary of State of the State of Delaware on January 21,
1997, for the exclusive purposes of (i) issuing and selling the Trust Securities
(as defined herein), (ii) effecting the Exchange Offer or filing a Shelf
Registration Statement (each as defined herein), (iii) using the proceeds from
the sale of Trust Securities to acquire the Debentures (as defined herein), (iv)
making Distributions (as defined herein) to holders of the Trust Securities as
provided herein and (v) engaging in only those other activities necessary,
advisable or incidental thereto (such as registering the transfer of the Trust
Securities);
WHEREAS, as of the date hereof, no interests in the Trust have
been issued; and
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration.
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration fully amend and restate the Original Declaration so as to
constitute the governing instrument of such business trust, the Trustees declare
that all assets contributed to the Trust will be held in trust for the benefit
of the holders, from time to time, of the securities representing undivided
beneficial interests in the assets of the Trust issued hereunder, subject to the
provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined
in the preamble above or elsewhere herein have the respective meanings
assigned to them in this Section 1.1;
<PAGE> 7
(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 (including Annex I hereto and Exhibit A hereto)
as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and
Annexes and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act (as defined
below) has the same meaning when used in this Declaration unless
otherwise defined in this Declaration or the context otherwise
requires;
(f) a term defined in the Indenture (as defined below) has the
same meaning when used in this Declaration unless otherwise defined in
this Declaration or the context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Additional Interest" means the additional interest referred
to in Article XIV.
"Administrative Trustee" has the meaning set forth in Section
5.1.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Registrar.
"Authorized Officer" of a Person means any other Person that
is authorized to legally bind such former Person.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or its nominee,
ownership and transfers of which shall be maintained and made through
book-entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday or a Sunday
or a day on which banking institutions in The City of New York, New York are
authorized or required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time
to time or any successor legislation.
"Capital Security Beneficial Owner" means, with respect to a
Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
2
<PAGE> 8
"Capital Securities" has the meaning specified in Section
7.1(a).
"Capital Securities Guarantee" means the guarantee agreement
dated as of January 31, 1997 of the Sponsor in respect of the Capital
Securities, as modified, supplemented or amended from time to time.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Capital Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book-entry transfers and pledges of the Capital
Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means the "Closing Date" under the Purchase
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the United States Securities and Exchange
Commission as from time to time constituted, or if any time after the execution
of this Declaration such Commission is not existing and performing the duties
now assigned to it under applicable Federal securities laws, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in Section
7.1(a).
"Common Securities Guarantee" means the guarantee agreement
dated as of January 31, 1997 of the Sponsor in respect of the Common Securities,
as modified, supplemented or amended from time to time.
"Company Indemnified Person" means (a) any Administrative
Trustee; (b) any Affiliate of any Administrative Trustee; (c) any officers,
directors, shareholders, members, partners, employees, representatives or agents
of any Administrative Trustee; or (d) any officer, employee or agent of the
Trust or its Affiliates.
"Compounded Interest" shall have the meaning ascribed to it in
the Indenture.
"Corporate Trust Office" means the office of the Property
Trustee at which the corporate trust business of the Property Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Agreement is located at The Chase Manhattan Bank, 450 West
33rd Street, 15th Floor, New York, New York 10001.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) an Affiliate of the Trust; and (b) any Holder of Securities.
3
<PAGE> 9
"Debenture Issuer" means Trenwick Group Inc., a Delaware
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.
"Debenture Trustee" means The Chase Manhattan Bank, a New York
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the 8.82% Junior Subordinated Deferrable
Interest Debentures due February 1, 2037 of the Debenture Issuer issued pursuant
to the Indenture (including, as applicable, those Debentures issued upon
consummation of the Exchange Offer).
"Default" means an event, act or condition that with notice or
lapse of time, or both, would constitute an Event of Default.
"Definitive Capital Securities" has the meaning set forth in
Section 7.3(c).
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Direct Action" has the meaning set forth in Section 3.8(e).
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an Event
of Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Exchange Agent" has the meaning set forth in Section 7.4(a).
"Exchange Capital Securities" has the meaning set forth in
Section 7.1(a).
"Exchange Debentures" means the Debentures issued upon
consummation of the Exchange Offer (including pursuant to any Private Exchange
(as defined in the Registration Rights Agreement)).
"Exchange Offer" means the exchange offer (including any
Private Exchange (as defined in the Registration Rights Agreement)) contemplated
in Section 2(a) of the Registration Rights Agreement.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 10.4(b).
"Global Capital Securities" means the Regulation S Global
Capital Securities, the Rule 144A Global Capital Securities and the Unrestricted
Global Capital Securities.
4
<PAGE> 10
"Global Certificates" means certificates for Capital
Securities registered in the name of a Clearing Agency or its nominee.
"Holder" means a Person in whose name a Security is
registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture, dated as of January 31, 1997,
between the Debenture Issuer and the Debenture Trustee, as modified,
supplemented or amended from time to time.
"Initial Capital Securities" means 8.82% Subordinated Capital
Income Securities (liquidation amount $1,000 per security) of the Trust issued
on the Closing Date.
"Initial Debentures" means the Debentures as authenticated and
issued under the Indenture on the Closing Date.
"Initial Purchaser" means Lehman Brothers Inc.
"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(a)(vii).
"Like Amount" has the meaning set forth in Section 3 of Annex
I.
"Liquidation Amount" with respect to any Security means the
amount designated as such with respect thereto in Section 2(a) of Annex I
hereto.
"Majority in Liquidation Amount" means, with respect to the
Trust Securities, except as provided in the terms of the Capital Securities or
by the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Capital Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate Liquidation Amount of all outstanding Securities of the relevant
class.
"Offering Memorandum" has the meaning set forth in Section
3.6(a).
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman, a Vice Chairman, the Chief Executive
Officer, the President, a Vice President (however designated), or the Secretary
or an Assistant Secretary of such Person. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Declaration shall include:
5
<PAGE> 11
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who
may be an employee of the Sponsor, and who shall be acceptable to the Property
Trustee.
"Participants" has the meaning set forth in Section 7.3(b).
"Paying Agent" has the meaning specified in Section 7.4.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Property Trustee" has the meaning set forth in Section
5.3(a).
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
"Purchase Agreement" means the Purchase Agreement for the
initial offering and sale of Capital Securities.
"QIBs" means qualified institutional buyers as defined in Rule
144A.
"Quorum" means a majority of the Administrative Trustees or,
if there are only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of January 31, 1997, by and among the Sponsor, the Trust and
the Initial Purchaser, as modified, supplemented or amended from time to time.
"Registration Statement" means a registration statement filed
under the Securities Act.
"Regulation S" means Regulation S under the Securities Act, as
such regulation may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission.
6
<PAGE> 12
"Regulation S Global Capital Security" has the meaning set
forth in Section 7.3(a).
"Related Party" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer," when used with respect to the Property
Trustee, means any officer of the Property Trustee with direct responsibility
for the administration of this Declaration and also means, with respect to a
particular corporate trust matter, any other officer of the Property Trustee to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"Restricted Definitive Capital Securities" has the meaning set
forth in Section 7.3(c).
"Restricted Capital Security" means a Capital Security
required by Section 9.2 to contain a Restricted Securities Legend.
"Restricted Securities Legend" has the meaning set forth in
Section 9.2.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act,
or any successor rule or regulation.
"Rule 144" means Rule 144 under the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
"Rule 144A" means Rule 144A under the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
"Rule 144A Global Capital Security" has the meaning set forth
in Section 7.3(a).
"Securities" or "Trust Securities" means the Common Securities
and the Capital Securities (including, as applicable, those Capital Securities
issued upon consummation of the Exchange Offer and any Private Exchange (as
defined in the Registration Rights Agreement)).
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee
and the Capital Securities Guarantee.
"Shelf Registration Statement" means a "shelf" registration
statement of the Sponsor and the Trust as contemplated in Section 2(b) of the
Registration Rights Agreement.
"Special Event" has the meaning set forth in the Indenture.
"Sponsor" means Trenwick Group Inc., a Delaware corporation,
or any successor entity resulting from any merger, consolidation, amalgamation
or other business combination, in its capacity as sponsor of the Trust.
7
<PAGE> 13
"Successor Delaware Trustee" has the meaning set forth in
Section 5.7(a).
"Successor Entity" has the meaning set forth in Section
3.14(b).
"Successor Property Trustee" has the meaning set forth in
Section 5.7(a).
"Successor Securities" has the meaning set forth in Section
3.14(b).
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"Tax Event Maturity Shortening" has the meaning set forth in
the Indenture.
"10% in Liquidation Amount" means, with respect to the Trust
Securities, except as provided in the terms of the Capital Securities or by the
Trust Indenture Act, Holder(s) of outstanding Trust Securities voting together
as a single class or, as the context may require, Holders of outstanding Capital
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 10% of the aggregate Liquidation Amount of
all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations,
including temporary 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 (including the Property Trustee, the Delaware Trustee
and each Administrative Trustee), so long as such Person shall continue as
trustee in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in accordance
with the provisions hereof, and references herein to a Trustee or the Trustees
shall refer to such Person or Persons solely in their capacity as trustees
hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Unrestricted Global Capital Security" has the meaning set
forth in Section 9.2(b).
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
8
<PAGE> 14
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Administrative Trustees on
behalf of the Trust shall provide the Property Trustee, unless the Property
Trustee is Registrar for the Securities, with a list (i) within five days after
each record date for payment of Distributions, 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 neither the
Sponsor nor the Administrative Trustees on behalf of the Trust shall be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Property Trustee by
the Sponsor and the Administrative Trustees on behalf of the Trust, and (ii) at
any other time, within 30 days of receipt by the Trust of a written request for
a List of Holders as of a date no more than 14 days before such List of Holders
is given to the Property Trustee. The Property Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in a List
of 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.
(b) The Property Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year, commencing May 15,
1997, the Property Trustee shall provide to the Holders of the Capital
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 and the Administrative Trustees on behalf
of the Trust shall provide to the Property Trustee such documents, reports and
information as are required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
9
<PAGE> 15
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Administrative Trustees on behalf
of the Trust shall provide to the Property Trustee such evidence of compliance
with any conditions precedent provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in Liquidation Amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital Securities
and its consequences, provided that, if the underlying Event of Default under
the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority
in aggregate principal amount of the holders of the Debentures (a
"Super Majority") to be waived under the Indenture, the Event of
Default under the Declaration may only be waived by the vote of the
Holders of at least the proportion in aggregate Liquidation Amount of
the Capital Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in
lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act. Upon
such waiver, any such default shall cease to exist, and any Event of Default
with respect to the Capital Securities arising therefrom shall be deemed to have
been cured, for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other Default or an Event of Default with respect to
the Capital Securities or impair any right consequent thereon. Any waiver by the
Holders of the Capital Securities of an Event of Default with respect to the
Capital Securities shall also be deemed to constitute a waiver by the Holders of
the Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in Liquidation Amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event
of Default under the Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration shall also not be
waivable; or
10
<PAGE> 16
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Declaration as provided
below in this Section 2.6(b), the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least
the proportion in aggregate Liquidation Amount of the Common Securities
that the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences if all Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Capital Securities and only the Holders of the Capital Securities will have
the right to direct the Property Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Declaration and the Securities, as permitted
by the Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such Default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed
to have been cured for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other Default or Event of Default with respect
to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee, at the direction of the Holders of the Capital Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default known to a Responsible Officer of the Property
Trustee, transmit by mail, first class postage prepaid, to the Holders, the
Administrative Trustees and the Sponsor, notices of all defaults with respect to
the Securities actually known to a Responsible Officer of the Property Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Event of Default as defined in the Indenture, not including any periods of grace
provided for therein and irrespective of the giving of any notice provided
therein).
(b) The Sponsor and the Administrative Trustees shall file
annually with the Property Trustee a certification as to whether or not they are
in compliance with all the conditions and covenants applicable to them under
this Declaration.
(c) For purposes of this Section 2.7, the Property Trustee
shall not be deemed to have knowledge of any Default or Event of Default except:
(i) a Default under Sections 5.01(a) and 5.01(b) of the
Indenture (other than with respect to the payment of Additional
Interest or Compounded Interest); or
11
<PAGE> 17
(ii) any Default or Event of Default as to which the Property
Trustee shall have received written notice or of which a Responsible
Officer of the Property Trustee charged with the administration of the
Declaration shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust shall continue to be named "Trenwick Capital Trust
I" as such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the
Administrative Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is Trenwick
Capital Trust I, c/o Trenwick Group Inc., Metro Center, One Station Place,
Stamford, Connecticut 06902. On ten Business Days' prior written notice to the
Holders, the Administrative Trustees may designate another principal office.
SECTION 3.3 Purpose.
The Trust exists for the exclusive purpose of (a) issuing and
selling Securities, (b) using the proceeds from the sale of the Securities to
acquire the Debentures, (c) making Distributions to Holders of the Securities as
herein provided, (d) effecting the Exchange Offer or filing a Shelf Registration
Statement, and (e) except as otherwise limited herein, engaging in only those
other activities necessary, advisable or incidental thereto. The Trust shall not
borrow money, issue debt or reinvest proceeds derived from investments, mortgage
or pledge any of its assets, or otherwise undertake (or permit to be undertaken)
any activity that would cause the Trust not to be classified for United States
federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Administrative Trustees shall
have exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Administrative Trustees in accordance with their powers, as
set forth in Sections 3.6 and 5.5, shall constitute the act of and serve to bind
the Trust and an action taken by the Property Trustee on behalf of the Trust in
accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no Person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration. The
authority of the Delaware Trustee is set forth in Section 3.11 hereof.
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SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the
Debentures and the Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 Powers and Duties of the Administrative Trustees.
(a) The Administrative Trustees shall have the exclusive
power, duty and authority to cause the Trust to engage in the following
activities:
(i) to issue and sell the Capital Securities and the Common
Securities in accordance with this Declaration; provided, however, that
(A) the Trust may issue no more than two series of Capital Securities
and no more than one series of Common Securities, (B) there shall be no
interests in the Trust other than the Securities, and (C) the issuance
of Securities shall be limited to: (x) a simultaneous issuance of both
Capital Securities and Common Securities on the Closing Date and (y)
the issuance of a second series of Capital Securities upon the
consummation of the Exchange Offer.
(ii) in connection with the issue and sale of the Capital
Securities and the Common Securities, and in connection with the
Exchange Offer or any Shelf Registration Statement, at the direction of
the Sponsor, to:
(A) prepare and execute, if necessary, an offering memorandum
(the "Offering Memorandum") in preliminary and final form
prepared by the Sponsor, in relation to the offering and sale
of Initial Capital Securities to QIBs in reliance on Rule 144A
under the Securities Act, to institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act) and outside the United
States to non-U.S. Persons in offshore transactions complying
with Rule 903 or 904 of Regulation S under the Securities Act,
and to execute and file with the Commission, at such time as
is determined by the Sponsor, any Registration Statement,
including any amendment thereto, as contemplated by the
Registration Rights Agreement and take such actions as are
required to effect the Exchange Offer or any Shelf
Registration Statement;
(B) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary, to
qualify or register all or part of the Capital Securities in
any State or foreign jurisdiction in which the Sponsor has
determined to qualify or register such Capital Securities for
sale;
(C) if deemed necessary or advisable by the Sponsor, execute
and file an application, prepared by the Sponsor, to the New
York Stock Exchange or any other national stock exchange or
the Nasdaq Stock Market's National Market for listing or
quotation of the Capital Securities;
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(D) execute and deliver letters, documents, or instruments
with DTC and other Clearing Agencies relating to the Capital
Securities;
(E) if required, execute and file with the Commission a
registration statement on Form 8-A, including any amendments
thereto, prepared by the Sponsor, relating to the registration
of the Capital Securities under Section 12(b) or 12(g) of the
Exchange Act; and
(F) execute and enter into the Purchase Agreement providing
for the sale of the Capital Securities, the Registration
Rights Agreement, a subscription agreement providing for the
sale of the Common Securities, a subscription agreement
providing for the sale of the Debentures and any other
agreements regarding the issuance and sale of Securities;
(iii) to acquire the Initial Debentures with the proceeds of
the sale of the Initial Capital Securities and the Common Securities
and to exchange the Initial Debentures for a like principal amount of
Exchange Debentures pursuant to the Exchange Offer; provided, however,
that the Administrative Trustees shall cause legal title to the
Debentures to be held of record in the name of the Property Trustee for
the benefit of the Holders of the Capital Securities and the Holders of
the Common Securities;
(iv) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event;
(v) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including
and with respect to, for the purposes of Section 316(c) of the Trust
Indenture Act, Distributions, voting rights, redemptions and exchanges,
and to issue relevant notices to the Holders of Capital Securities and
Holders of Common Securities as to such actions and applicable record
dates;
(vi) to take all actions and perform such duties as may be
required of the Administrative Trustees pursuant to the terms of the
Securities;
(vii) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or
against the Trust ("Legal Action"), unless pursuant to Section 3.8(e),
the Property Trustee has the exclusive power to bring such Legal
Action;
(viii) 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;
(ix) to cause the Trust to comply with the Trust's obligations
under this Declaration or the Trust Indenture Act;
(x) to give the certificate required by Section 314(a)(4) of
the Trust Indenture Act to the Property Trustee, which certificate may
be executed by any Administrative Trustee;
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(xi) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(xii) to act as, or appoint another Person to act as,
Registrar and Exchange Agent for the Securities or to appoint a Paying
Agent for the Securities as provided in Section 7.4, except for such
time as such power to appoint a Paying Agent is vested in the Property
Trustee;
(xiii) to give prompt written notice to the Property Trustee
and to Holders of any notice received from the Debenture Issuer of its
election to defer payments of interest on the Debentures by extending
the interest payment period under the Indenture;
(xiv) 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;
(xv) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business
trust under the laws of the State of Delaware and of each other
jurisdiction in which such existence is necessary to protect the
limited liability of the Holders of the Capital Securities or to enable
the Trust to effect the purposes for which the Trust was created;
(xvi) to take any action, not inconsistent with this
Declaration or with applicable law, that the Administrative Trustees
determine in their discretion to be necessary or desirable in carrying
out the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
(A) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company
Act;
(B) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust;
(C) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes; and
(D) taking all action necessary to cause all applicable tax
returns and tax information reports that are required to be
filed with respect to the Trust to be duly prepared and filed
by the Administrative Trustees, on behalf of the Trust; and
(xvii) to take all action necessary to consummate the Exchange
Offer or otherwise cause the Capital Securities to be registered
pursuant to an effective Registration Statement in accordance with the
provisions of the Registration Rights Agreement.
(b) The Administrative Trustees must exercise the powers set
forth in this Section 3.6 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Administrative Trustees
shall not take any action that is inconsistent with the purposes and functions
of the Trust set forth in Section 3.3.
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(c) Subject to this Section 3.6, the Administrative Trustees
shall have none of the powers or the authority of the Property Trustee set forth
in Section 3.8.
(d) Any expenses incurred by the Administrative Trustees
pursuant to this Section 3.6 shall be reimbursed by the Sponsor.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the Property
Trustee) all in their capacities as such and not in their individual capacities
shall not, engage in any activity other than as required or authorized by this
Declaration. The Trust shall not:
(i) invest any proceeds received by the Property Trustee on
behalf of the Trust from holding the Debentures, but shall distribute
all such proceeds (excluding "Additional Sums" (as defined in the
Indenture), which Additional Sums shall be applied by the Property
Trustee as directed by the Administrative Trustees), 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 Debentures;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this Declaration or Annex I,
(A) direct the time, method and place of conducting any proceeding with
respect to any remedy available to the Debenture Trustee, or exercising
any right or power conferred upon the Debenture Trustee with respect to
the Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures shall be due and payable, or
(D) consent to any amendment, modification or termination of the
Indenture or the Debentures, where such consent shall be required,
unless the Trust shall have received an Opinion of Counsel experienced
in such matters to the effect there is no more than an insubstantial
risk that the Trust would not be classified for United States federal
income tax purposes as a trust subject to the provisions of Section 671
through 679 of the Code (a "grantor trust") on account of such
amendment, modification or termination.
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SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders. The right, title and interest of the Property Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.7. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and under
the exclusive control of the Property Trustee on behalf of the Holders
and, upon the receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds into the
Property Trustee Account and make payments to the Holders of the
Securities from the Property Trustee Account in accordance with Section
6.1. Funds in the Property Trustee Account shall be held uninvested
until disbursed in accordance with this Declaration. The Property
Trustee Account shall be an account that is maintained with a banking
institution the rating on whose long-term unsecured indebtedness is at
least equal to the rating assigned to the Capital Securities by a
"nationally recognized statistical rating organization", as that term
is defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Capital
Securities and the Common Securities to the extent the Debentures are
redeemed or mature; and
(iii) upon written notice issued by the Administrative
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect
the distribution of the Debentures to Holders of Securities upon the
occurrence of certain events.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant to
the terms of the Securities.
(e) Subject to Section 3.9(a) and this Section 3.8(e), the
Property Trustee shall have the exclusive right to take any Legal Action which
arises out of or in connection with an Event of Default of which a Responsible
Officer of the Property Trustee has actual knowledge or the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture Act so
require, and if the Property Trustee shall have failed to take such Legal
Action, the foregoing to the contrary notwithstanding, the Holders of the
Capital Securities may take such Legal Action, to the same extent as if such
Holders of Capital Securities held an aggregate principal amount of Debentures
equal to the aggregate Liquidation Amount of such Capital Securities, without
first proceeding against the Property
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Trustee or the Trust; provided, however, that if an Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Debenture Issuer to pay the principal of or premium, if any, or interest on the
Debentures on the date such principal, premium, if any, or interest is otherwise
payable (or in the case of prepayment on the prepayment date), then, the
foregoing to the contrary notwithstanding, a Holder of Capital Securities may
directly institute a proceeding for enforcement of payment to such Holder of the
principal of or premium, if any, or interest on the Debentures having a
principal amount equal to the aggregate Liquidation Amount of the Capital
Securities of such Holder (a "Direct Action") on or after the respective due
date specified in the Debentures. In connection with such Direct Action, the
rights of the Holders of Common Securities will be subrogated to the rights of
Holders of Capital Securities to the extent of any payment made by the Debenture
Issuer to Holders of Capital Securities in such Direct Action. Except as
provided in the preceding sentences, the Holders of Capital Securities will not
be able to exercise directly any other remedy available to the holders of the
Debentures. The Sponsor hereby covenants that, without the consent of the
holders of all the Capital Securities then outstanding, it will not take any
action to impair or affect the right of holders of Capital Securities to bring a
Direct Action.
(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 has
accepted that appointment in accordance with Section 5.7(a).
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Debentures
under the Indenture and, if an Event of Default actually known to a Responsible
Officer of the Property Trustee occurs and is continuing, the Property Trustee
shall, for the benefit of Holders, enforce its rights as holder of the
Debentures subject to the rights of the Holders pursuant to the terms of such
Securities.
(h) The Property Trustee shall be authorized to undertake any
actions set forth in Section 317(a) of the Trust Indenture Act.
(i) Subject to Section 7.4 hereof, for such time as the
Property Trustee is the Paying Agent, the Property Trustee may authorize one or
more Persons to act as additional Paying Agents and to pay Distributions,
redemption payments or liquidation payments on behalf of the Trust with respect
to all Securities and any such Paying Agent shall comply with Section 317(b) of
the Trust Indenture Act. Any such additional Paying Agent may be removed by the
Property Trustee at any time the Property Trustee remains as Paying Agent and a
successor Paying Agent or additional Paying Agents may be (but is not required
to be) appointed at any time by the Property Trustee.
(j) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 3.6.; provided, however, that if
the Administrative Trustees appoint the Property Trustee as Registrar, Exchange
Agent or Paying Agent pursuant to Section 3.6(a)(xii), the Property Trustee
shall have the power hereunder to serve in any such capacity and perform the
duties and obligations related thereto.
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(k) The Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and in the Securities and no implied covenants shall be read
into this Declaration against the Property Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6) of
which a Responsible Officer of the Property Trustee has actual knowledge, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Declaration, and use the same degree of care and skill in their exercise,
as a prudent Person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this
Declaration and 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 in the Securities, and no implied covenants or
obligations shall be read into this Declaration against the
Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished
to the Property Trustee and conforming to the requirements of
this Declaration; provided, however, that in the case of any
such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property Trustee,
the Property Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements
of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee under the
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Indenture with respect to the Debentures, or exercising any right or
power conferred upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Declaration or indemnity reasonably satisfactory to the Property
Trustee against such risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Property Trustee Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for
its own account, subject to the protections and limitations on
liability afforded to the Property Trustee under this Declaration, the
Business Trust Act and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of
the Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
in writing with the Sponsor. Money held by the Property Trustee need
not be segregated from other funds held by it except in relation to the
Property Trustee Account maintained by the Property Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law;
and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the Sponsor
with their respective duties under this Declaration, nor shall the
Property Trustee be liable for any default or misconduct of the
Administrative Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document reasonably
believed by it to be genuine and to have been signed, sent or presented
by the proper party or parties;
(ii) any direction or act of the Sponsor or the Administrative
Trustees contemplated by this Declaration may be sufficiently evidenced
by an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an
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Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Administrative Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion. Such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees. The Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holder, unless such Holder shall
have provided to the Property Trustee security and indemnity,
reasonably satisfactory to the Property Trustee, against the costs,
expenses (including reasonable attorneys' fees and expenses and the
expenses of the Property Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by
the Property Trustee;
(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 rights or
powers hereunder or perform any duties hereunder either directly or by
or through agents, custodians, nominees or attorneys and the Property
Trustee shall not be required to supervise, nor shall it 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 so to 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 (A) may request written instructions
from the Holders of the Securities, which instructions may only be
given by the Holders of the same proportion in Liquidation Amount of
the Securities as would be entitled to direct the Property
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Trustee under the terms of the Securities in respect of such remedy,
right or action, (B) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (C)
shall be protected in conclusively relying on or acting in accordance
with such instructions;
(xi) the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration; and
(xii) the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith, without
negligence, and reasonably believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this
Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
(c) Whether or not therein expressly so provided, every
provision of this Declaration relating to the conduct or affecting the liability
of or affording protection to the Property Trustee shall be subject to the
provisions of this Section.
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 Administrative Trustees or 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. Without limiting the
generality of the foregoing, the Delaware Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees, the Property Trustee
or the Sponsor with their respective duties under this Declaration, nor shall
the Delaware Trustee be liable for any default or misconduct of any of the
Administrative Trustees, the Property Trustee or the Sponsor. In the event the
Delaware Trustee shall at any time be required to take any action or perform any
duty hereunder, the Delaware Trustee shall be entitled to the benefits of
Section 3.9(b)(ii)-(viii) and Section 3.10. No implied covenants or obligations
shall be read into this Declaration against the Delaware Trustee.
SECTION 3.12 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.
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SECTION 3.13 Duration of Trust.
The Trust, unless dissolved pursuant to the provisions of
Article VIII hereof, shall have existence up to February 1, 2042.
SECTION 3.14 Mergers.
(a) The Trust may not merge with or into, consolidate,
amalgamate, or be replaced by, or sell, convey, transfer or lease its properties
and assets as an entirety, or substantially as an entirety, to any Person,
except as described in Section 3.14(b) and (c).
(b) The Trust may, at the request of the Sponsor as the holder
of all the outstanding Common Securities, with the consent of the Administrative
Trustees or, if there are more than two, a majority of the Administrative
Trustees and without the consent of the Holders, the Delaware Trustee or the
Property Trustee, merge with or into, consolidate, amalgamate, or be replaced
by, or sell, convey, transfer or lease its properties and assets as an entirety,
or substantially as an entirety to, a trust organized as such under the laws of
any State; provided that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust with
respect to the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same
as the Securities rank with respect to Distributions and
payments upon liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor
Entity that possesses the same powers and duties as the Property
Trustee with respect to the Debentures;
(iii) the 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 Capital
Securities are then listed or quoted, if any;
(iv) such merger, consolidation, amalgamation, replacement,
sale, conveyance, transfer or lease does not cause the Capital
Securities (including any Successor Securities) to be downgraded by any
two nationally recognized statistical rating organizations;
(v) such merger, consolidation, amalgamation, replacement,
sale, conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the Holders of the Securities
(including any Successor Securities) in any material respect (other
than any dilution of such Holders' interests in the new entity);
(vi) such Successor Entity has a purpose identical to that of
the Trust;
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(vii) prior to such merger, consolidation, amalgamation,
replacement, sale, conveyance, transfer or lease, the Sponsor has
received an opinion of an independent counsel to the Trust experienced
in such matters to the effect that:
(A) such merger, consolidation, amalgamation, replacement,
sale, conveyance, transfer or lease does not adversely affect
the rights, preferences and privileges of the Holders
(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,
replacement, sale, conveyance, transfer or lease, neither the
Trust nor the Successor Entity will be required to register as
an Investment Company; and
(viii) the Sponsor or any permitted successor or assignee owns
all of the common securities of such Successor Entity and guarantees
the obligations of such Successor Entity under the Successor Securities
at least to the extent provided by the Capital Securities Guarantee and
the Common Securities Guarantee.
(c) Notwithstanding Section 3.14(b), the Trust shall not,
except with the consent of the Holders of 100% in Liquidation Amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by, or
sell, convey, transfer or lease its properties and assets as an entirety, or
substantially as an entirety to, any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, sale, conveyance, transfer or
lease would cause the Trust or the Successor Entity not to be classified as a
grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the
Common Securities then issued by the Trust, in a Liquidation Amount equal to at
least 3% of the total capital of the Trust, at the same time as the Initial
Capital Securities are issued and sold.
SECTION 4.2 Responsibilities of the Sponsor.
(a) In connection with the issue and sale of the Capital
Securities and the Common Securities, the Sponsor shall have the exclusive right
and responsibility to engage in the following activities:
(i) to prepare the Offering Memorandum and to prepare for
filing by the Trust with the Commission any Registration Statement,
including any amendments thereto, as contemplated by the Registration
Rights Agreement (or to delegate such preparation to the Administrative
Trustees pursuant to Section 3.6(a)(ii)(A) hereof);
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(ii) to determine the States and foreign jurisdictions in
which to take appropriate action to qualify or register for sale all or
part of the Capital Securities and to do any and all such acts, other
than actions which must be taken by the Trust, and advise the Trust of
actions it must take, and prepare for execution and filing any
documents to be executed and filed by the Administrative Trustees
pursuant to Section 3.6(a)(ii)(B) hereof, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of
any such States or foreign jurisdictions;
(iii) if deemed necessary or advisable by the Sponsor, to
prepare for execution and filing by the Administrative Trustees
pursuant to Section 3.6(a)(ii)(C) hereof, an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
Stock Market's National Market for listing or quotation of the Capital
Securities;
(iv) if required, to prepare for filing by the Administrative
Trustees pursuant to Section 3.6(a)(ii)(E) hereof with the Commission a
registration statement on Form 8-A relating to the registration of the
Capital Securities under Section 12(b) or 12(g) of the Exchange Act,
including any amendments thereto; and
(v) to negotiate the terms and cause the preparation of the
Purchase Agreement and the Registration Rights Agreement providing for
the sale and registration, respectively, of the Capital Securities for
execution by the Administrative Trustees pursuant to Section
3.6(a)(ii)(F) hereof.
SECTION 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders of Capital
Securities, in the event that a failure of the Trust to pay Distributions on the
Capital Securities is attributable to the failure of the Debenture Issuer to pay
interest or principal on the Debentures, to institute a proceeding directly
against the Debenture Issuer for enforcement of its payment obligations on the
Debentures.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
Majority in Liquidation Amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities; provided,
however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a
natural Person, shall be a Person who is a resident of the State of
Delaware or that, if not a natural Person, is an entity which has its
principal place of
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business in the State of Delaware (the "Delaware Trustee"); (2) there
shall be at least one Trustee who is an employee or officer of, or is
affiliated with the Sponsor (an "Administrative Trustee"); and (3) one
Trustee shall be the Property Trustee for so long as this Declaration
is required to qualify as an indenture under the Trust Indenture Act,
and such Trustee may also serve as Delaware Trustee if it meets the
applicable requirements. Notwithstanding the above, unless an Event of
Default shall have occurred and be continuing, for the purpose of
meeting the legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust's property may at the time
be located, the Holders of a Majority in Liquidation Amount of the
Common Securities acting as a class at a meeting of the Holders of the
Common Securities, and the Administrative Trustees, shall have power at
any time or times, to appoint one or more Persons either to act as a
co-trustee, jointly with the Property Trustee, of all or any part of
the Trust's property, or to act as separate trustee of any such
property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in
such capacity any property, title, right or power deemed necessary or
desirable, subject to the provisions of this Declaration. In case an
Event of Default has occurred and is continuing, the Property Trustee
alone shall have power to make any such appointment of a co-trustee.
SECTION 5.2 Delaware Trustee.
As required by the Business Trust Act, the Delaware Trustee
shall be:
(a) a natural Person who is a resident of the State of
Delaware; or
(b) if not a natural Person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law; provided that, if the Property Trustee
has its principal place of business in the State of Delaware and
otherwise meets the requirements of applicable law, then the Property
Trustee may also be the Delaware Trustee in which case Section 3.11
shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the "Property
Trustee") which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; 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 as set forth in its
most recent report of condition so published.
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(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Common Securities (as
if it were the obligor referred to in Section 310(b) of the Trust Indenture Act)
shall in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Corporate Trustee Administration Department
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware
Trustee Generally.
Each Administrative Trustee and the Delaware Trustee (unless
the Property Trustee also acts as Delaware Trustee) shall be either a natural
Person who is at least 21 years of age or a legal entity otherwise satisfying
the provisions of this Declaration that shall act through one or more Authorized
Officers.
SECTION 5.5 Administrative Trustees.
(a) The initial Administrative Trustees shall be:
James F. Billett, Jr.
Alan L. Hunte
Jane T. Wiznitzer
(b) Except as expressly set forth in this Declaration and
except if a meeting of the Administrative Trustees is called with respect to any
matter over which the Administrative Trustees have power to act, any power of
the Administrative Trustees may be exercised by, or with the consent of, any one
Administrative Trustee.
(c) Unless otherwise determined by the Administrative
Trustees, and except as otherwise required by the Business Trust Act or
applicable law, any Administrative Trustee is authorized to execute on behalf of
the Trust any documents which the Administrative Trustees have the power and
authority to cause the Trust to execute pursuant to Section 3.6.
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SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trustee Administration Department
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b), any Trustee may be appointed or
removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor;
(ii) in the case of Administrative Trustees, after the
issuance of any Securities, by vote of the Holders of a Majority in
Liquidation Amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities;
(iii) in the case of the Property Trustee and the Delaware
Trustee, unless an Event of Default shall have occurred and be
continuing after the issuance of any Securities, by vote of the Holders
of a Majority in Liquidation Amount of the Common Securities voting as
a class at a meeting of the Holders of the Common Securities; and
(iv) in the case of the Property Trustee and the Delaware
Trustee, if an Event of Default shall have occurred and be continuing
after the issuance of the Securities, by vote of Holders of a Majority
in Liquidation Amount of the Capital Securities voting as a class at a
meeting of the Holders of the Capital Securities.
The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.7(a) until a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.3 (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Administrative Trustees and the Sponsor.
The Trustee that acts as Delaware Trustee shall not be removed
in accordance with this Section 5.7(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Administrative Trustees and the Sponsor.
(b) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
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(i) No such resignation or removal of the Trustee that acts as
the Property Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the
Sponsor and the resigning Property Trustee; or
(B) until the assets of the Trust have been completely
liquidated and, after complying with the provisions of Section
3808(e) of the Business Trust Act, the proceeds thereof
distributed to the holders of the Securities; and
(ii) no such resignation or removal 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.
(c) The Holders of the Common Securities shall use their best
efforts promptly to appoint a Successor Delaware Trustee or Successor Property
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.7.
(d) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.7 within 30 days after delivery of an instrument of resignation or
removal, the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
appropriate, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
(e) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Administrative
Trustees or, if there are more than two, a majority of the Administrative
Trustees, shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section 5.7.
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SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 5.7, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Declaration.
SECTION 5.10 Meetings.
If there is more than one Administrative Trustee, meetings of
the Administrative Trustees shall be held from time to time as needed upon the
call of any Administrative Trustee. Regular meetings of the Administrative
Trustees may be held at a time and place fixed by resolution of the
Administrative Trustees. Notice of any in-person meeting of the Administrative
Trustees shall be hand delivered or otherwise delivered in writing (including by
facsimile) not less than 24 hours before such meeting. Notice of any telephonic
meeting of the Administrative Trustees or any committee thereof shall be hand
delivered or otherwise delivered in writing (including by facsimile) not less
than 24 hours before such meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of an Administrative Trustee at a meeting shall
constitute a waiver of notice of such meeting except where an Administrative
Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless provided otherwise in this Declaration, any action of
the Administrative Trustees may be taken at a meeting by vote of a majority of
the Administrative Trustees present (whether in person or by telephone) and
eligible to vote with respect to such matter, provided that a Quorum is present,
or without a meeting by the unanimous written consent of the Administrative
Trustees. In the event there is only one Administrative Trustee, any and all
action of such Administrative Trustee shall be evidenced by a written consent of
such Administrative Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural Person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any Registration Statement or amendment
thereto filed with the Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust the doing
of such things and the execution of such instruments either in the name of the
Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of this Declaration
or the Securities.
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SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which any Trustee (excluding any
Administrative Trustee that is a natural Person) may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which such Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of such Trustee, shall be the successor of such Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
SECTION 5.13 Undertaking for Costs
In any suit for the enforcement of any right or remedy under
this Declaration or in any suit against the Property Trustee for any action
taken or omitted by it as a Property Trustee, a court in its discretion may
require the filing by any party litigant in the suit (other than the Property
Trustee) of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorney's fees and
expenses, against any party litigant in the suit (other than the Property
Trustee), having due regard to the merits and good faith of the claims or
defenses made by the party litigant.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Each Holder shall receive Distributions in accordance with the
terms of such Holder's Securities. If and to the extent that the Debenture
Issuer makes a payment of interest (including Compounded Interest (as defined in
the Indenture), Additional Interest, additional Distributions, premium and/or
principal on the Debentures held by the Property Trustee or any other payments
pursuant to the Registration Rights Agreement with respect to the Debentures
held by the Property Trustee (but excluding Additional Sums (as defined in the
Indenture), which Additional Sums shall be applied by the Property Trustee as
directed by the Administrative Trustees) (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 in accordance with the respective terms of the Securities held
by them.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Administrative Trustees shall on behalf of the Trust
issue one class of Subordinated Capital Income Securities representing undivided
beneficial interests in the assets of the Trust, which class may be divided into
no more than two series each having such terms as are set forth in Annex I (the
"Capital Securities"), and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Common Securities"). At such time, if ever, as the
Exchange Debentures are issued, the Administrative Trustees shall on behalf of
the Trust issue one series of capital securities representing undivided
beneficial interests in the Trust having such terms as are set forth in Annex I
(the "Exchange Capital Securities") in exchange for the Initial Capital
Securities accepted for exchange in the Exchange Offer, which Exchange Capital
Securities shall not bear the legends set forth in Section 9.2 unless the Holder
of the Initial Capital Securities is either (i) a broker-dealer who purchased
such Initial Capital Securities directly from the Trust for resale pursuant to
Rule 144A, or any other available exemption, under the Securities Act, (ii) a
Person participating in the distribution of the Initial Capital Securities or
(iii) a Person who is an affiliate (as defined in Rule 144A) of the Trust or
unless the Registration Rights Agreement shall require otherwise. The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Capital Securities and the Common Securities. The definition of
Exchange Capital Securities as used in this Declaration shall be deemed to
include any Capital Securities issued in a Private Exchange (as defined in the
Registration Rights Agreement), and any Capital Securities issued in a Private
Exchange shall be deemed to be of the same series as the Exchange Capital
Securities.
(b) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(c) Upon receipt of the stated consideration in full, and the
subsequent issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(d) Every Person, by virtue of having become a Holder or a
Capital Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
SECTION 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of the Trust by
an Administrative Trustee. In case any Administrative Trustee of the Trust who
shall have signed any of the Securities shall cease to be such Administrative
Trustee before the Securities so signed shall be delivered by the Trust, such
Securities nevertheless may be delivered as though the Person who signed such
Securities had not ceased to be such Administrative Trustee; and any Securities
may be signed on behalf of the Trust by such Persons who, at the actual date of
execution of such Security, shall be the Administrative Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
Person was not such an Administrative Trustee.
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(b) One Administrative Trustee shall sign the Capital
Securities for the Trust by manual or facsimile signature. Unless otherwise
determined by the Trust, such signature shall, in the case of Common Securities,
be a manual signature.
(c) A Capital Security shall not be valid until authenticated
by the manual signature of an authorized officer of the Property Trustee. The
signature shall be conclusive evidence that the Capital Security has been
authenticated under this Declaration.
(d) Upon a written order of the Trust signed by one
Administrative Trustee, the Property Trustee shall authenticate the Capital
Securities for original issue. The aggregate number of Capital Securities
outstanding at any time shall not exceed the number set forth in Annex I hereto
except as provided in Section 7.6.
(e) The Property Trustee may appoint an authenticating agent
acceptable to the Administrative Trustees to authenticate Capital Securities. An
authenticating agent may authenticate Capital Securities whenever the Property
Trustee may do so. Each reference in this Declaration to authentication by the
Property Trustee includes authentication by such agent. An authenticating agent
has the same rights as the Property Trustee to deal with the Sponsor or an
Affiliate.
SECTION 7.3 Form and Dating.
The Capital Securities and the Property Trustee's certificate
of authentication shall be substantially in the form of Exhibit A-1 and the
Common Securities shall be substantially in the form of Exhibit A-2, each of
which is hereby incorporated in and expressly made a part of this Declaration.
Certificates representing the Securities may be printed, typewritten,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Administrative Trustees, as evidenced by their execution
thereof. The Securities may have letters, CUSIP or other numbers, notations or
other marks of identification or designation and such legends or endorsements
required by law, stock exchange rule, agreements to which the Trust is subject,
if any, or usage (provided that any such notation, legend or endorsement is in a
form acceptable to the Trust). The Trust at the direction of the Sponsor shall
furnish any such legend not contained in Exhibit A-1 to the Property Trustee in
writing. Each Capital Security shall be dated the date of its authentication.
The terms and provisions of the Securities set forth in Annex I and the forms of
Securities set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and to the extent applicable, the Property Trustee, Administrative
Trustees and the Sponsor, by their execution and delivery of this Declaration,
expressly agree to be bound thereby.
(a) Global Securities. Securities offered and sold to QIBs in
reliance on Rule 144A or offered and sold outside the United States to
non-U.S. Persons in offshore transactions in reliance on Regulation S,
as provided in the Purchase Agreement, shall be issued in the form of
one or more permanent Global Securities in definitive, fully registered
form without Distribution coupons with the appropriate global legends
and Restricted Securities Legend set forth in Exhibit A-1 hereto
(respectively, a "Rule 144A Global Capital Security" or "Regulation S
Global Capital Security"), which shall be deposited on behalf of the
purchasers of the Capital Securities represented thereby with the
Property Trustee, as custodian for the Clearing Agency, and registered
in the name of the Clearing Agency or a nominee of the Clearing Agency,
duly executed by an Administrative Trustee and authenticated by the
Property Trustee as hereinafter provided. The number of Capital
Securities represented by the
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Rule 144A Global Capital Security and the Regulation S Global Capital
Security may from time to time be increased or decreased by adjustments
made on the records of the Property Trustee and the Clearing Agency or
its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall apply
only to the Rule 144A Global Capital Securities, the Regulation S
Global Capital Securities and such other Capital Securities in global
form as may be authorized by the Trust to be deposited with or on
behalf of the Clearing Agency.
(i) An Administrative Trustee shall execute and the
Property Trustee shall authenticate and, in accordance with
this Section 7.3, make available for delivery initially one or
more Rule 144A Global Capital Securities and one or more
Regulation S Global Capital Securities that (A) shall be
registered in the name of Cede & Co. or another nominee of
such Clearing Agency and (B) shall be delivered by the
Property Trustee to such Clearing Agency or pursuant to such
Clearing Agency's written instructions or held by the Property
Trustee as custodian for the Clearing Agency.
(ii) Members of, or participants in, the Clearing
Agency ("Participants") shall have no rights under this
Declaration with respect to any Rule 144A Global Capital
Security or any Regulation S Global Capital Security held on
their behalf by the Clearing Agency or by the Property Trustee
as the custodian of the Clearing Agency or under such Rule
144A Global Capital Security or such Regulation S Global
Capital Security, and the Clearing Agency may be treated by
the Trust, the Property Trustee and any agent of the Trust or
the Property Trustee as the absolute owner of such Rule 144A
Global Capital Security or such Regulation S Global Capital
Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Trust, the
Property Trustee or any agent of the Trust or the Property
Trustee from giving effect to any written certification, proxy
or other authorization furnished by the Clearing Agency or
impair, as between the Clearing Agency and its Participants,
the operation of customary practices of such Clearing Agency
governing the exercise of the rights of a holder of a
beneficial interest in any Rule 144A Global Capital Security
or any Regulation S Global Capital Security.
(c) Definitive Capital Securities. Except as provided in
Section 7.9, owners of beneficial interests in a Rule 144A Global
Capital Security or a Regulation S Global Capital Security will not be
entitled to receive physical delivery of certificated Capital
Securities ("Definitive Capital Securities"). Purchasers of Securities
who are "accredited investors" (as defined in Rule 501(a)(1), (2), (3)
or (7) of Regulation D under the Securities Act) and did not purchase
Capital Securities in reliance on Rule 144A or Regulation S will
receive Capital Securities in the form of individual certificates in
definitive, fully registered form without Distribution coupons and with
the Restricted Securities Legend set forth in Exhibit A-1 hereto
("Restricted Definitive Capital Securities"); provided, however, that
upon transfer of such Restricted Definitive Capital Securities to a
QIB, such Restricted Definitive Capital Securities will, unless the
Rule 144A Global Capital Security has previously been exchanged, be
exchanged for an interest in a Rule 144A Global Capital Security
pursuant to the provisions of Section 9.2. Restricted Definitive
Capital Securities will bear the Restricted Securities Legend set forth
on Exhibit A-1 unless removed in accordance with this Section 7.3 or
Section 9.2.
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SECTION 7.4 Registrar and Paying Agent.
(a) The Trust shall maintain in The City of New York, (i) an
office or agency where Capital Securities may be presented for registration of
transfer ("Registrar"), (ii) an office or agency where Capital Securities may be
presented for payment ("Paying Agent") and (iii) an office or agency where
Securities may be presented for exchange in connection with the Exchange Offer
(the "Exchange Agent"). The Registrar shall keep a register of the Capital
Securities and of their transfer. The Administrative Trustees shall appoint the
Registrar, the Paying Agent and the Exchange Agent and may appoint one or more
co-Registrars, one or more additional Paying Agents and one or more additional
Exchange Agents in such other locations as they shall determine. The term
"Registrar" includes any additional registrar, the term "Paying Agent" includes
any additional paying agent and the term "Exchange Agent" includes any
additional exchange agent." The Administrative Trustees may change any Registrar
or co-Registrar, Paying Agent or Exchange Agent without prior notice to any
Holder. The Paying Agent shall be permitted to resign as Paying Agent upon 30
days' written notice to the Administrative Trustees. The Administrative Trustees
shall notify the Property Trustee of the name and address of any Agent not a
party to this Declaration. If the Administrative Trustees fail to appoint or
maintain another entity as Registrar, Paying Agent or Exchange Agent, the
Property Trustee shall act as such. The Trust or any of its Affiliates may act
as Paying Agent, Registrar or Exchange Agent. The Trust shall act as Paying
Agent and Registrar for the Common Securities.
(b) The Administrative Trustees initially appoint the Property
Trustee as Registrar and Paying Agent for the Capital Securities.
SECTION 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the
Property Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Property Trustee all money held by the Paying
Agent for the payment of Liquidation Amounts or Distributions on the Securities,
and will notify the Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues or in the event of an Event of
Default, the Property Trustee may require a Paying Agent to pay all money held
by it to the Property Trustee. The Trust at any time may require a Paying Agent
to pay all money held by it to the Property Trustee and to account for any money
disbursed by it. Upon payment over to the Property Trustee, the Paying Agent (if
other than the Trust or an Affiliate of the Trust) shall have no further
liability for the money. If the Trust or the Sponsor or an Affiliate of the
Trust or the Sponsor acts as Paying Agent, it shall segregate and hold in a
separate trust fund or account for the benefit of the Holders all money held by
it as Paying Agent.
SECTION 7.6 Replacement Securities.
If any Holder claims that a Security owned by it has been
lost, destroyed or wrongfully taken or if any Security is mutilated and is
surrendered to the Trust or in the case of the Capital Securities to the
Property Trustee, the Trust shall issue, an Administrative Trustee shall execute
and the Property Trustee shall authenticate a replacement Security if the
requirements of this Section 7.6 are satisfied. An indemnity bond must be
provided by the Holder which, in the judgment of the Property Trustee, is
sufficient to protect the Trustees, the Sponsor or any authenticating agent from
any loss which any of them may suffer if a Security is replaced. The Trust may
charge such Holder for its expenses in replacing a Security.
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Every replacement Security is a substitute beneficial interest
in the Trust to the same extent as the original it replaces.
SECTION 7.7 Outstanding Capital Securities.
(a) The Capital Securities outstanding at any time are all the
Capital Securities authenticated by the Property Trustee except for those
cancelled by it, those delivered to it for cancellation, and those described in
this Section as not outstanding.
(b) If a Capital Security is replaced (pursuant to Section 7.6
hereof), it ceases to be outstanding unless the Property Trustee receives proof
satisfactory to it that the replaced Capital Security is held by a bona fide
purchaser satisfying the conditions of this Declaration, including without
limitation the provisions of Article IX hereof.
(c) If Capital Securities are considered redeemed, including
any and all distributions and liquidation preferences, in accordance with the
terms of this Declaration, they cease to be outstanding and Distributions on
them shall cease to accumulate.
(d) A Capital Security does not cease to be outstanding
because one of the Administrative Trustees, the Sponsor or an Affiliate of the
Sponsor holds the Security.
SECTION 7.8 Capital Securities in Treasury.
In determining whether the Holders of the required amount of
Securities have concurred in any direction, waiver or consent, Capital
Securities owned by the Administrative Trustees, the Sponsor or an Affiliate of
the Sponsor, as the case may be, shall be disregarded and deemed not to be
outstanding, except that for the purposes of determining whether the Property
Trustee shall be fully protected in relying on any such direction, waiver or
consent, only Securities which a Responsible Officer of the Property Trustee
actually knows are so owned shall be so disregarded.
SECTION 7.9 Temporary Securities.
(a) Until definitive Securities are ready for delivery, the
Administrative Trustees may cause to be prepared and execute, and, in the case
of the Capital Securities, the Property Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Administrative Trustees
consider appropriate for temporary Securities. Without unreasonable delay, the
Administrative Trustees shall prepare and, in the case of the Capital
Securities, the Property Trustee shall authenticate definitive Securities in
exchange for temporary Securities.
(b) A Global Capital Security deposited with the Clearing
Agency or with the Property Trustee as custodian for the Clearing Agency
pursuant to Section 7.3 shall be transferred to the beneficial owners thereof in
the form of certificated Capital Securities only if such transfer complies with
Section 9.2 and (i) the Clearing Agency notifies the Company that it is
unwilling or unable to continue as Clearing Agency for such Global Capital
Security or if at any time such Clearing Agency ceases to be a "clearing agency"
registered under the Exchange Act and a clearing agency is not appointed by the
Sponsor within 90 days of such notice, (ii) a Default or an Event of Default has
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occurred and is continuing or (iii) the Administrative Trustees in their sole
discretion elect to cause the issuance of certificated Capital Securities.
(c) Any Global Capital Security that is transferable to the
beneficial owners thereof in the form of certificated Capital Securities
pursuant to this Section 7.9 shall be surrendered by the Clearing Agency to the
Property Trustee located in the City of New York, New York, to be so
transferred, in whole or from time to time in part, without charge, and the
Property Trustee shall authenticate and make available for delivery, upon such
transfer of each portion of such Global Capital Security, an equal aggregate
Liquidation Amount of Securities of authorized denominations in the form of
certificated Capital Securities. Any portion of a Global Capital Security
transferred pursuant to this Section shall be registered in such names as the
Clearing Agency shall direct. Any Capital Security in the form of certificated
Capital Securities delivered in exchange for an interest in the Restricted
Global Capital Security shall, except as otherwise provided by Sections 7.3 and
9.1, bear the Restricted Securities Legend set forth in Exhibit A-1 hereto.
(d) Subject to the provisions of Section 7.9(c), the Holder of
a Global Capital Security may grant proxies and otherwise authorize any Person,
including Participants and Persons that may hold interests through Participants,
to take any action which such Holder is entitled to take under this Declaration
or the Securities.
(e) In the event of the occurrence of any of the events
specified in Section 7.9(b), the Administrative Trustees will promptly make
available to the Property Trustee a reasonable supply of certificated Capital
Securities in fully registered form without Distribution coupons.
SECTION 7.10 Cancellation.
The Administrative Trustees at any time may deliver Capital
Securities to the Property Trustee for cancellation. The Registrar, Paying Agent
and Exchange Agent shall forward to the Property Trustee any Capital Securities
surrendered to them for registration of transfer, redemption, exchange or
payment. The Property Trustee shall promptly cancel all Capital Securities
surrendered for registration of transfer, redemption, exchange, payment,
replacement or cancellation and shall dispose of canceled Capital Securities in
accordance with its customary procedures unless the Administrative Trustees
otherwise direct the Property Trustee in writing. The Trust may not issue new
Capital Securities to replace Capital Securities that it has redeemed or that
have been delivered to the Property Trustee for cancellation or that any Holder
has exchanged.
SECTION 7.11 CUSIP Numbers.
The Trust in issuing the Capital Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders of Capital
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Capital
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Capital
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.
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ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust.
(a) The Trust shall automatically dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or
liquidation or its equivalent with respect to the Sponsor;
(iii) following the distribution of a Like Amount of the
Debentures to the Holders; provided that the Property Trustee has
received a written notice from the Sponsor as the holder of all the
outstanding Common Securities directing it to terminate the Trust
(which direction is at the discretion of the Sponsor, except as
provided below); provided, further, that such distribution is
conditioned on the Administrative Trustees' receipt of an opinion by
independent tax counsel experienced in such matters, which opinion may
rely on published rulings of the Internal Revenue Service, to the
effect that the Holders will not recognize any gain or loss for United
States federal income tax purposes as a result of the dissolution of
the Trust and such distribution of a Like Amount of the Debentures;
(iv) upon the entry of a decree of judicial dissolution of the
Trust by a court of competent jurisdiction;
(v) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the
Securities;
(vi) upon the repayment of the Debentures or at such time as
no Debentures are outstanding;
(vii) the expiration of the term of the Trust provided in
Section 3.13; or
(viii) following the distribution of a Like Amount of the
Debentures to the Holders of the Securities pursuant to the terms
thereof upon receipt of a written notice from the Sponsor that it
intends to effect a Tax Event Maturity Shortening and directing the
Administrative Trustees to dissolve the Trust and distribute a Like
Amount of the Debentures to the Holders of the Securities.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and after satisfaction of all liabilities of the
Trust, the Administrative Trustees shall file a certificate of cancellation with
the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive
the dissolution of the Trust.
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ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Subject to this Article IX, Capital Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration. Any transfer or purported transfer of any
security not made in accordance with this Declaration shall be null and void.
(b) The Sponsor may not transfer the Common Securities, except
as set forth in Section 10.01 of the Indenture.
(c) The Registrar shall provide for the registration of
Securities and of the transfer of Securities, which will be effected without
charge except as provided in Section 7.6 hereof, but only upon payment (with
such indemnity as the Registrar may require) in respect of any tax or other
governmental charges that may be imposed in relation to it. Upon surrender for
registration of transfer of any Securities, the Registrar shall cause one or
more new Securities to be issued in the name of the designated transferee or
transferees. Every Security surrendered for registration of transfer shall be
accompanied by a written instrument of transfer in form satisfactory to the
Registrar duly executed by the Holder or such Holder's attorney duly authorized
in writing. Each Security surrendered for registration of transfer shall be
canceled by the Registrar. A transferee of a Security shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Security. By acceptance of a Security, each transferee
shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.2 Transfer Procedures and Restrictions.
(a) General. Except as otherwise provided in Section 9.2(c),
if Capital Securities are issued upon the registration of transfer, exchange or
replacement of Capital Securities bearing the Restricted Securities Legend set
forth in Exhibit A-1 hereto, or if a request is made to remove such Restricted
Securities Legend on Capital Securities, the Capital Securities so issued shall
bear the Restricted Securities Legend, or the Restricted Securities Legend shall
not be removed, as the case may be, unless there is delivered to the Trust and
the Property Trustee such satisfactory evidence, which shall include an Opinion
of Counsel licensed to practice law in the State of New York, as may be
reasonably required by the Sponsor, that neither the legend nor the restrictions
on transfer set forth therein are required to ensure that transfers thereof are
made pursuant to an exception from the registration requirements of the
Securities Act or, with respect to Restricted Securities, that such Securities
are not "restricted" within the meaning of Rule 144. Upon provision of such
satisfactory evidence, the Property Trustee, at the written direction of the
Administrative Trustees, shall authenticate and deliver Capital Securities that
do not bear the legend.
(b) Transfers After Effectiveness of a Registration Statement.
Upon exchange of any Capital Securities pursuant to a Registration Statement
with respect to the Exchange Offer, except as provided in the Registration
Rights Agreement or by the terms of the Capital Securities, all requirements
pertaining to Securities Act legends on such Capital Securities will cease to
apply, and
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beneficial interests in a Capital Security in global form without legends will
be available to transferees of such Capital Securities, upon exchange of the
transferring holder's Restricted Definitive Capital Security or directions to
transfer such Holder's beneficial interest in the Rule 144A Global Capital
Security or the Regulation S Global Capital Security, as the case may be. No
such transfer or exchange of a Restricted Definitive Capital Security or of an
interest in the Rule 144A Global Capital Security or the Regulation S Global
Capital Security shall be effective unless the transferor delivers to the Trust
a certificate in a form substantially similar to that attached hereto as the
"Form of Assignment" in Exhibit A-1. Except as otherwise provided in Section
9.2(m), after the effectiveness of a Registration Statement, the Trust shall
issue and the Property Trustee, upon a written order of the Trust signed by one
Administrative Trustee, shall authenticate a Capital Security in global form
without the Restricted Securities Legend (the "Unrestricted Global Capital
Security") to deposit with the Clearing Agent to evidence transfers of
beneficial interests from the (i) Rule 144A Global Capital Security or the
Regulation S Global Capital Security and (ii) Restricted Definitive Capital
Securities.
(c) Transfer and Exchange of Definitive Capital Securities.
When Definitive Capital Securities are presented to the Registrar or
co-Registrar:
(x) to register the transfer of such Definitive Capital
securities or
(y) to exchange such Definitive Capital Securities which
became mutilated, destroyed, defaced, stolen or lost, for an equal
number of Definitive Capital Securities,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Capital Securities surrendered for
registration of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Trust and
the Registrar or co-Registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing; and
(ii) in the case of Definitive Capital Securities that are
Restricted Definitive Capital Securities:
(A) if such Restricted Capital Securities are being delivered
to the Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such
Holder to that effect; or
(B) if such Restricted Capital Securities are being delivered
to register a transfer: (x) a certification from the
transferor in a form substantially similar to that attached
hereto as the "Form of Assignment" in Exhibit A-1, and (y) if
the Trust or Registrar so requests, evidence reasonably
satisfactory to the Sponsor as to the compliance with the
restrictions set forth in the Restricted Securities Legend.
(d) Restrictions on Transfer of a Definitive Capital Security
for a Beneficial Interest in a Global Capital Security. A Definitive Capital
Security may not be exchanged for a beneficial interest in a Global Capital
Security except upon satisfaction of the requirements set forth below. Upon
receipt by the Property Trustee of a Definitive Capital Security, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Property Trustee, together with:
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(i) if such Definitive Capital Security is a Restricted
Capital Security, a written certificate (in a form substantially
similar to that attached hereto as the "Form of Assignment" in Exhibit
A-1); provided, however, that such Definitive Capital Security may only
be exchanged for an interest in a Regulation S Global Security where
such Definitive Capital Security is being transferred pursuant to
Regulation S or Rule 144 (if available); and
(ii) whether or not such Definitive Capital Security is a
Restricted Capital Security, written instructions directing the
Property Trustee to make, or to direct the Clearing Agency to make, an
adjustment on its books and records with respect to the appropriate
Global Capital Security to reflect an increase in the number of the
Capital Securities represented by such Global Capital Security,
then the Property Trustee shall cancel such Definitive Capital Security and
cause, or direct the Clearing Agency to cause, the aggregate number of Capital
Securities represented by the appropriate Global Capital Security to be
increased accordingly. If no Global Capital Securities are then outstanding, the
Trust shall issue and the Property Trustee shall authenticate, upon written
order of any Administrative Trustee, an appropriate number of Capital Securities
in global form.
(e) Transfer and Exchange of Global Capital Securities.
Subject to Section 9.2(f), the transfer and exchange of beneficial interests in
Global Capital Securities shall be effected through the Clearing Agency, in
accordance with this Declaration (including applicable restrictions on transfer
set forth herein, if any) and the procedures of the Clearing Agency therefor.
(f) Transfer of a Beneficial Interest in a Global Capital
Security for a Definitive Capital Security.
(i) Any Person having a beneficial interest in a Global
Capital Security may upon request, but only upon 20 days prior notice
to the Property Trustee, and if accompanied by the information
specified below, exchange such beneficial interest for a Definitive
Capital Security representing the same number of Capital Securities.
Upon receipt by the Property Trustee from the Clearing Agency or its
nominee on behalf of any Person having a beneficial interest in a
Global Capital Security of written instructions or such other form of
instructions as is customary for the Clearing Agency or the Person
designated by the Clearing Agency as having such a beneficial interest
in a Restricted Capital Security and a certification from the
transferor (in a form substantially similar to that attached hereto as
the "Form of Assignment" in Exhibit A-1), which may be submitted by
facsimile, then the Property Trustee will cause the aggregate number of
Capital Securities represented by Global Capital Securities to be
reduced on its books and records and, following such reduction, the
Administrative Trustees will execute and the Property Trustee will
authenticate and make available for delivery to the transferee a
Definitive Capital Security.
(ii) Definitive Capital Securities issued in exchange for a
beneficial interest in a Global Capital Security pursuant to this
Section 9.2(f) shall be registered in such names and in such authorized
denominations as the Clearing Agency, pursuant to instructions from its
Participants or indirect participants or otherwise, shall instruct the
Property Trustee in writing. The Property Trustee shall deliver such
Capital Securities to the Persons in whose names such
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Capital Securities are so registered in accordance with such
instructions of the Clearing Agency.
(g) Restrictions on Transfer and Exchange of Global Capital
Securities. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in subsection (h) of this Section 9.2), a Global
Capital Security may not be transferred as a whole except by the Clearing Agency
to a nominee of the Clearing Agency or another nominee of the Clearing Agency or
by the Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.
Prior to the expiration of the restricted period, as
contemplated by Regulation S, beneficial interests in the Regulation S Global
Capital Security may be exchanged for beneficial interests in the Rule 144A
Global Capital Security only if such exchange occurs in connection with a
transfer of the Capital Securities pursuant to Rule 144A and the transferor
first delivers to the Property Trustee a written certificate (in a form
substantially similar to that attached hereto as the "Form of Assignment" in
Exhibit A-1) to the effect that the Capital Securities are being transferred to
a Person whom the transferor reasonably believes to be a QIB, purchasing for its
own account or the account of a QIB in a transaction meeting the requirements of
Rule 144A and in accordance with all applicable securities laws of the states of
the United States and other jurisdictions.
Beneficial interests in the Rule 144A Global Capital Security
may be transferred to a Person who takes delivery in the form of an interest in
the Regulation S Global Capital Security, whether before or after the expiration
of such restricted period, as contemplated by Regulation S, only if the
transferor first delivers to the Property Trustee a written certificate (in a
form substantially similar to that attached hereto as the "Form of Assignment"
in Exhibit A-1) to the effect that such transfer is being made in accordance
with Rule 903 or 904 of Regulation S or Rule 144 (if available) and that, if
such transfer occurs prior to the expiration of such restricted period, the
interest transferred will be held immediately thereafter through Euroclear or
CEDEL.
(h) Authentication of Definitive Capital Securities. If at any
time:
(i) there occurs a Default or an Event of Default which is
continuing, or
(ii) the Administrative Trustees, in their sole discretion,
notify the Property Trustee in writing that they elect to cause the
issuance of Definitive Capital Securities under this Declaration,
then the Administrative Trustees will execute, and the Property Trustee, upon
receipt of a written order of the Trust signed by one Administrative Trustee
requesting the authentication and delivery of Definitive Capital Securities to
the Persons designated by the Trust, will authenticate and make available for
delivery Definitive Capital Securities, equal in number to the number of Capital
Securities represented by the Global Capital Securities, in exchange for such
Global Capital Securities.
(i) Legend.
(i) Except as permitted by the following paragraph (ii), each
Capital Security certificate evidencing the Global Capital Securities
and the Definitive Capital Securities (and all Capital Securities
issued in exchange therefor or substitution thereof, except in the
Exchange
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Offer) shall bear a legend (the "Restricted Securities Legend") in
substantially the following form:
THE CAPITAL SECURITY REPRESENTED HEREBY HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR
ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
THIS CAPITAL SECURITY, PRIOR TO THE DATE WHICH IS THREE YEARS
AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE
LAST DATE ON WHICH THE COMPANY OR ANY "AFFILIATE" OF THE
COMPANY WAS THE OWNER OF THIS CAPITAL SECURITY (OR ANY
PREDECESSOR OF THIS CAPITAL SECURITY) (THE "RESALE RESTRICTION
TERMINATION DATE") ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A") TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
WITHIN THE MEANING OF RULE 501 (A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT, SUBJECT TO THE RIGHT OF THE TRUST AND THE
COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT
TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) PURSUANT TO CLAUSE (E),
TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE TRUST A LETTER
FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A TO
THE OFFERING MEMORANDUM DATED JANUARY 28, 1997.
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THE HOLDER OF THIS CAPITAL SECURITY BY ITS
ACCEPTANCE HEREOF REPRESENTS AND ACKNOWLEDGES THAT IT EITHER
(A) IS NOT A PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE of 1986, AS AMENDED, AND IS NOT
PURCHASING SUCH SECURITIES (OR INTEREST THEREIN) ON BEHALF OF
OR WITH "PLAN ASSETS" OF ANY SUCH PLAN OR (B) IS ELIGIBLE FOR
THE EXEMPTIVE RELIEF AVAILABLE UNDER PTCE 96-23, 95-60, 91-38,
90-1 OR 84-14.
THE HOLDER OF THIS CAPITAL SECURITY FURTHER
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
CAPITAL SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
and in the case of the Regulation S Global Capital Security
THIS CAPITAL SECURITY HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS UNLESS REGISTERED UNDER THE
SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.
(ii) Upon any sale or transfer of a Restricted Capital
Security (including any Restricted Capital Security represented by a
Global Capital Security) pursuant to an effective Registration
Statement under the Securities Act or pursuant to Rule 144 under the
Securities Act after such registration statement ceases to be
effective:
(A) in the case of any Restricted Capital Security that is a
Definitive Capital Security, the Registrar, unless otherwise
notified in writing, shall permit the Holder thereof to
exchange such Restricted Capital Security for a Definitive
Capital Security that does not bear the Restricted Securities
Legend and rescind any restriction on the transfer of such
Restricted Capital Security; and
(B) in the case of any Restricted Capital Security that is
represented by a Global Capital Security, the Registrar,
unless otherwise notified in writing, shall permit the Holder
of such Global Capital Security to exchange such Global
Capital Security for another Global Capital Security that does
not bear the Restricted Securities Legend.
(j) Cancellation or Adjustment of Global Capital Security. At
such time as all beneficial interests in a Global Capital Security have either
been exchanged for Definitive Capital Securities to the extent permitted by this
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Capital Security shall be canceled by the Property
Trustee. At any time prior to such cancellation, if any beneficial interest in a
Global Capital Security is exchanged for Definitive Capital Securities, Capital
Securities represented by such Global Capital Security shall be reduced and an
adjustment shall be made on the books and records of the
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Property Trustee (if it is then the custodian for such Global Capital Security)
with respect to such Global Capital Security, by the Property Trustee or the
Securities custodian, to reflect such reduction.
(k) Obligations with Respect to Transfers and Exchanges of
Capital Securities.
(i) To permit registrations of transfers and exchanges, the
Administrative Trustees shall execute and the Property Trustee shall
authenticate Definitive Capital Securities and Global Capital
Securities at the Registrar's or co-Registrar's request in accordance
with the terms of this Declaration.
(ii) Subject to Section 7.6 hereof, registrations of transfers
or exchanges will be effected without charge, but only upon payment
(with such indemnity as the Trust or the Sponsor may require) in
respect of any tax or other governmental charge that may be imposed in
relation to it.
(iii) The Registrar or co-Registrar shall not be required to
register the transfer of or exchange (a) Capital Securities during a
period beginning at the opening of business 15 days before the day of
mailing of a notice of redemption or any notice of selection of Capital
Securities for redemption and ending at the close of business on the
day of such mailing; or (b) any Capital Security so selected for
redemption in whole or in part, except the unredeemed portion of any
Capital Security being redeemed in part.
(iv) Prior to the due presentation for registration of
transfer of any Capital Security, the Trust, the Property Trustee, the
Paying Agent, the Registrar or any co-Registrar may deem and treat the
Person in whose name a Capital Security is registered as the absolute
Holder of such Capital Security for the purpose of receiving
Distributions on such Capital Security and for all other purposes
whatsoever, and none of the Trust, the Property Trustee, the Paying
Agent, the Registrar or any co-Registrar shall be affected by notice to
the contrary.
(v) All Capital Securities issued upon any registration of
transfer or exchange pursuant to the terms of this Declaration shall
evidence the same security and shall be entitled to the same benefits
under this Declaration as the Capital Securities surrendered upon such
registration of transfer or exchange.
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(l) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Capital Security, a
Participant in the Clearing Agency or other Person with respect to the
accuracy of the records of the Clearing Agency or its nominee or of any
Participant thereof, with respect to any ownership interest in the
Capital Securities or with respect to the delivery to any Participant,
beneficial owner or other Person (other than the Clearing Agency) of
any notice (including any notice of redemption) or the payment of any
amount, under or with respect to such Capital Securities. All notices
and communications to be given to the Holders and all payments to be
made to Holders under the Capital Securities shall be given or made
only to or upon the order of the registered Holders (which shall be the
Clearing Agency or its nominee in the case of a Global Capital
Security). The rights of beneficial owners in any Global Capital
Security shall be exercised only through the Clearing Agency subject to
the applicable rules and procedures of the Clearing Agency. The
Property Trustee may conclusively rely and shall be fully protected in
relying upon information furnished by the Clearing Agency or any agent
thereof with respect to its Participants and any beneficial owners.
(ii) The Property Trustee and Registrar shall have no
obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Declaration or
under applicable law with respect to any transfer of any interest in
any Capital Security (including any transfers between or among Clearing
Agency Participants or beneficial owners in any Global Capital
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if
and when expressly required by, the terms of this Declaration, and to
examine the same to determine substantial compliance as to form with
the express requirements hereof.
(m) Exchange of Initial Capital Securities for Exchange
Capital Securities. The Initial Capital Securities may be exchanged for Exchange
Securities pursuant to the terms of the Exchange Offer. The Property Trustee
shall make the exchange as follows:
(i) The Sponsor shall present the Property Trustee with an
Officers' Certificate certifying the following:
(A) a Registration Statement with respect to the
Exchange Offer has become effective; and
(B) the number of Initial Capital Securities properly
tendered in the Exchange Offer that are represented by a
Global Capital Security and the number of Initial Capital
Securities properly tendered in the Exchange Offer that are
represented by Definitive Capital Securities, the name of each
Holder of such Definitive Capital Securities, the liquidation
amount of Capital Securities properly tendered in the Exchange
Offer by each such Holder and the name and address to which
Definitive Capital Securities for Exchange Capital Securities
shall be registered and sent for each such Holder.
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(ii) The Property Trustee upon receipt of (A) such Officers'
Certificate, (B) an Opinion of Counsel (x) to the effect that the
Exchange Capital Securities have been registered under Section 5 of the
Securities Act and the Indenture, the Declaration and the Capital
Securities Guarantee have each been qualified under the Trust Indenture
Act and (y) with respect to the matters set forth in Section 3(p) of
the Registration Rights Agreement and (C) a Company Order (as defined
in the Indenture), shall authenticate (I) a Global Capital Security for
Exchange Capital Securities in aggregate liquidation amount equal to
the aggregate liquidation amount of Initial Capital Securities
represented by a Global Capital Security indicated in such Officers'
Certificate as having been properly tendered and (II) Definitive
Capital Securities representing Exchange Capital Securities registered
in the names of, and in the liquidation amounts indicated in, such
Officers' Certificate.
(iii) If, upon consummation of the Exchange Offer, less than
all the outstanding Initial Capital Securities shall have been properly
tendered and not withdrawn, the Property Trustee shall make an
endorsement on the Global Capital Security for Initial Capital
Securities indicating the reduction in the number and aggregate
liquidation amount represented thereby as a result of the Exchange
Offer.
(iv) The Trust shall deliver such Definitive Capital
Securities for Exchange Capital Securities to the Holders thereof as
indicated in such Officers' Certificate.
(n) Minimum Transfers. Initial Capital Securities may only be
transferred in minimum blocks of $100,000 aggregate Liquidation Amount until
such Initial Capital Securities are registered pursuant to an effective
registration statement filed under the Securities Act or become "unrestricted"
pursuant to Rule 144 under the Securities Act.
(o) ERISA. Securities may not be acquired by any Person who
is, or who, in acquiring such Securities is using the assets of, an employee
benefit plan subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan subject to Section 4975 of the Code ("ERISA Plan"), unless
the acquisition and holding by the Plan of such Securities is eligible for the
exemptive relief available under one of the following class exemptions: (i)
Prohibited Transaction Class Exemption 90-1 ("PTCE 90-1"), regarding investments
by insurance company pooled separate accounts, (ii) Prohibited Transaction Class
Exemption 91-38 ("PTCE 91-38"), regarding investments by bank collective
investment funds, (iii) Prohibited Transaction Class Exemption 84-14 ("PTCE
84-14"), regarding transactions effected by qualified professional asset
managers, (iv) Prohibited Transaction Class Exemption 96-23 ("PTCE 96-23"),
regarding transactions effected by in-house asset managers, or (v) Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60"), regarding investments by
insurance company general accounts.
Each certificate representing Capital Securities or Exchange
Capital Securities, as the case may be, shall bear a legend to the effect that
the holder of the Capital Security or the Exchange Capital Security or any
interest therein represents and acknowledges that (a) it is not an ERISA Plan
and is not purchasing such securities (or interest therein) on behalf of or with
"plan assets," of any ERISA Plan or (b) its purchase and holding of the Capital
Securities (or interest therein) is eligible for the exemptive relief available
under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14. To avoid Prohibited Transactions,
any ERISA Plan purchasing Capital Securities will be deemed to have directed the
Trust to invest in the Debentures and to have appointed the Trustees.
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SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Security
shall be registered on the books and records of the Trust as the sole Holder of
such Security 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 Security on the part of any Person, whether
or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Book-Entry Interests.
(a) Global Capital Securities shall initially be registered on
the books and records of the Trust in the name of Cede & Co., the nominee of the
Clearing Agency, and no Capital Security Beneficial Owner will receive a
definitive Capital Security Certificate representing such Capital Security
Beneficial Owner's interests in such Global Capital Securities, except as
provided in Section 9.2. Unless and until definitive, fully registered Capital
Securities certificates have been issued to the Capital Security Beneficial
Owners pursuant to Section 9.2:
(i) the provisions of this Section 9.4 shall be in full force
and effect;
(ii) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Capital Securities and receiving
approvals, votes or consents hereunder) as the Holder of the Capital
Securities and the sole holder of the Global Certificates and shall
have no obligation to the Capital Security Beneficial Owners;
(iii) 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
(iv) the rights of the Capital Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such Capital
Security Beneficial Owners and the Clearing Agency and/or the Clearing
Agency Participants. 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 Capital
Security Holders is required under this Declaration, the Trustees shall give all
such notices and communications specified herein to be given to the Holders of
Global Capital Security to the Clearing Agency, and shall have no notice
obligations to the Capital Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities the Administrative
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Capital Securities.
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ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders, which
shall be made solely from assets of the Trust; or
(ii) required to pay to any Holder any deficit upon
dissolution of the Trust or otherwise.
(b) The Sponsor shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Capital Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and 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.
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SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person acting under
this Declaration shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no
duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this
Declaration or by applicable law.
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SECTION 10.4 Indemnification.
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to or otherwise becomes involved in
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an
action by or in the right of the Trust) by reason of the fact that he
is or was a Company Indemnified Person against expenses (including
attorneys' fees and expenses), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did not act in good
faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted
by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to or otherwise becomes involved in any
threatened, pending or completed action or suit by or in the right of
the Trust to procure a judgment in its favor by reason of the fact that
he is or was a Company Indemnified Person, against expenses (including
attorneys' fees and expenses) actually and reasonably incurred by him
in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or
matter as to which such Company Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, such Person is fairly and reasonably entitled to indemnity for
such expenses which such Court of Chancery or such other court shall
deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the
Sponsor only as authorized in the specific case upon a determination
that indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1)
by the Administrative Trustees by a majority vote of a quorum
consisting of such Administrative Trustees who were not parties to such
action, suit or proceeding, (2) if such a quorum is not obtainable, or,
even if obtainable, if a
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quorum of disinterested Administrative Trustees so directs, by
independent legal counsel in a written opinion, or (3) by the Common
Security Holder of the Trust.
(v) Expenses (including attorneys' fees and expenses) incurred
by a Company Indemnified Person in defending or participating in a
civil, criminal, administrative or investigative action, suit or
proceeding referred to in paragraphs (i) and (ii) of this Section
10.4(a) shall be paid by the Sponsor in advance of the final
disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to repay
such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Debenture Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall
be made by the Sponsor if a determination is reasonably and promptly
made (1) by the Administrative Trustees by a majority vote of a quorum
of disinterested Administrative Trustees, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a
written opinion or (3) the Common Security Holder of the Trust, that,
based upon the facts known to the Administrative Trustees, counsel or
the Common Security Holder at the time such determination is made, such
Company Indemnified Person acted in bad faith or in a manner that such
Person did not reasonably believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding,
that such Company Indemnified Person believed or had reasonable cause
to believe his conduct was unlawful. In no event shall any advance be
made in instances where the disinterested Administrative Trustees,
independent legal counsel or Common Security Holder reasonably
determine that such Person deliberately breached his duty to the Trust
or its Common Security Holders or Capital Security Holders.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section
10.4(a) shall not be deemed exclusive of any other rights to which
those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer or Common Security Holders or Capital
Security Holders of the Trust or otherwise, both as to action in their
official capacity and as to action in another capacity while holding
such office. All rights to indemnification under this Section 10.4(a)
shall be deemed to be provided by a contract between the Sponsor and
each Company Indemnified Person who serves in such capacity at any time
while this Section 10.4(a) is in effect. Any repeal or modification of
this Section 10.4(a) shall not affect any rights or obligations then
existing.
(vii) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any Person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or
not the Sponsor would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any Person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect
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to the resulting or surviving entity as he would have with respect to
such constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 10.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a Person
who has ceased to be a Company Indemnified Person and shall inure to
the benefit of the heirs, executors and administrators of such a
Person.
(b) The Sponsor agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee or the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees' representatives, custodians, nominees or agents of the
Property Trustee or the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense including taxes (other than taxes based on the income
of such Fiduciary Indemnified Person) incurred without gross negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 10.4(b) shall survive the resignation or
removal of the Property Trustee or the Delaware Trustee, as the case may be, and
the satisfaction and discharge of this Declaration.
(c) Each Indemnified Person shall give prompt notice to each
indemnifying party from whom indemnification is to be sought hereunder by such
Indemnified Person of any action threatened or commenced against it in respect
of which any indemnity is sought hereunder, enclosing a copy of all papers
served on, and notices and demands delivered to, such Indemnified Person, if
any, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability which it may have under this Section 10.4,
except to the extent that it is materially prejudiced by such failure. The
indemnifying party shall be entitled to assume the defense of any such action or
proceeding with counsel reasonably satisfactory to the Indemnified Person who
shall not, except with the consent of such Indemnified Person, be counsel to the
indemnifying party. Upon assumption by the indemnifying party of the defense of
any such action or proceeding, the Indemnified Person shall have the right to
participate in such action or proceeding and to retain its own counsel, but the
indemnifying party shall not be liable for any legal fees or expenses
subsequently incurred by such Indemnified Person in connection with the defense
thereof unless (i) the indemnifying party has agreed to pay such fees and
expenses, (ii) the indemnifying party shall have failed to employ counsel
reasonably satisfactory to the Indemnified Person in a timely manner, or (iii)
the Indemnified Person shall have been advised by counsel (who shall not be
employed by such Indemnified Person and who shall be reasonably satisfactory to
the indemnifying party) that such representation would constitute an actual or
potential conflict of interests for counsel selected by the indemnifying party.
The indemnifying party shall not consent to the terms of any compromise or
settlement of any action defended by the indemnifying party in accordance with
the foregoing without the prior consent of the Indemnified Person, and the
Indemnified Person shall not consent to the terms of any compromise or
settlement of any action being defended by the indemnifying party in accordance
with the foregoing without the prior consent of the indemnifying party.
Notwithstanding the immediately preceding sentence, if at any time an
Indemnified Person shall have requested an indemnifying party to reimburse the
Indemnified Person for fees and expenses of counsel as contemplated above, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
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entered into more than thirty Business Days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement.
(d) The Sponsor agrees to pay the Property Trustee and the
Delaware Trustee, from time to time, such compensation for all services rendered
by the Property Trustee and the Delaware Trustee hereunder as may be mutually
agreed upon in writing by the Sponsor and the Property Trustee or the Delaware
Trustee, as the case may be, and, except as otherwise expressly provided herein,
to reimburse the Property Trustee and the Delaware Trustee upon its or their
request for all reasonable expenses, disbursements and advances incurred or made
by the Property Trustee or the Delaware Trustee, as the case may be, in
accordance with the provisions of this Declaration, except any such expense,
disbursement or advance as may be attributable to its or their negligence or bad
faith.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, 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 Delaware
Trustee, or the Property Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Property Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for, or act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.
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ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified
accountants selected by the Administrative Trustees.
(b) The Administrative Trustees shall cause to be prepared and
delivered to the Property Trustee and 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 for such Fiscal
Year prepared in accordance with generally accepted accounting principles.
(c) The Administrative 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 and at such time as is required by the Code and the Treasury
Regulations.
(d) The Administrative Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual United
States federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax returns
required to be filed by the Trust with any state or local taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Debentures held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Administrative Trustees; provided, however,
that the Property Trustee shall designate the signatories for the Property
Trustee Account.
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SECTION 11.4 Withholding.
The Trust and the Administrative Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Administrative Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to Distributions or allocations to any Holder, the amount withheld shall
be deemed to be a Distribution in the amount of the withholding to the Holder.
In the event of any claimed over-withholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Administrative Trustees (or if there are more than two
Administrative Trustees a majority of the Administrative Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment is permitted
by, and conforms to, the terms of this Declaration (including the terms
of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Property Trustee, the Property Trustee shall have first received:
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(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the
Securities);
(B) an Opinion of Counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(C) an Opinion of counsel complying with Section 3.7(vii)
hereof,
provided, however, that the Property Trustee shall not be required to
sign any such amendment until it is furnished an Opinion of Counsel to
the effect that such amendment will not:
(1) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(2) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act;
or
(3) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) At such time after the Trust has issued any Securities
that remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be set forth in the terms of such
Securities;
(d) Sections 3.14 (c) and 9.1(b), this Section 12.1 and the
last sentence of Section 3.8(e) shall not be amended without the consent of all
of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in Liquidation Amount of the Common Securities, and;
(f) The rights of the Holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees, shall not be amended without the consent of the Holders of a Majority
in Liquidation Amount of the Common Securities; and
(g) Notwithstanding Section 12.1(c), this Declaration may be
amended by the Property Trustee, the Administrative Trustees and the Sponsor
without the consent of the Holders of the Securities to:
(i) cure any ambiguity, correct or supplement any provision in
this Declaration that may be inconsistent with any other provision of
this Declaration or to make any other provisions with respect to
matters or questions arising under this Declaration which shall not be
inconsistent with the other provisions of the Declaration;
(ii) to modify, eliminate or add to any provisions of this
Declaration to such extent as shall be necessary to ensure that the
Trust will be classified for United States federal income
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tax purposes as a grantor trust at all times that any Securities are
outstanding or to ensure that the Trust will not be required to
register as an Investment Company under the Investment Company Act; or
(iii) to qualify or maintain qualification of this Declaration
of Trust under the Trust Indenture Act;
provided, however, that in each case, such action shall not adversely affect in
any material respect the interests of the Holders of the Securities. Any
amendments of this Declaration shall become effective when notice thereof is
sent to the Holders of the Securities.
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 Administrative Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration, the
terms of the Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading. The Administrative Trustees shall
call a meeting of the Holders of such class if directed to do so by the Holders
of at least 10% in Liquidation Amount of such class of Securities. Such
direction shall be given by delivering to the Administrative Trustees one or
more notices in a writing stating that the signing Holders wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders calling a meeting shall specify in writing the
Security Certificates held by the Holders exercising the right to call a meeting
and only those Securities specified shall be counted for purposes of determining
whether the required percentage set forth in the second sentence of this
paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders:
(i) notice of any such meeting shall be given to all the
Holders having a right to vote thereat at least seven days and not more
than 60 days before the date of such meeting. Whenever a vote, consent
or approval of the Holders is permitted or required under this
Declaration or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders. Any action that may
be taken at a meeting of the Holders may be taken without a meeting if
a consent or consents in writing setting forth the action so taken is
signed by the Holders owning not less than the minimum amount of
Securities in Liquidation Amount that would be necessary to authorize
or take such action at a meeting at which all Holders having a right to
vote thereon were present and voting. Prompt notice of the taking of
action without a meeting shall be given to the Holders entitled to vote
who have not consented in writing. The Administrative Trustees may
specify that any written ballot submitted to the Holder for the purpose
of taking any action without a meeting shall be returned to the Trust
within the time specified by the Administrative Trustees;
(ii) each Holder may authorize any Person to act for it by
proxy on all matters in which a Holder is entitled to participate,
including waiving notice of any meeting, or voting or participating at
a meeting. No proxy shall be valid after the expiration of 11 months
from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the
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pleasure of the Holder executing it. Except as otherwise provided
herein, all matters relating to the giving, voting or validity of
proxies shall be governed by the General Corporation Law of the State
of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Holders
were stockholders of a Delaware corporation;
(iii) each meeting of the Holders shall be conducted by the
Administrative Trustees or by such other Person that the Administrative
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules
of any stock exchange on which the Capital Securities are then listed
or trading, otherwise provides, the Administrative Trustees, in their
sole discretion, shall establish all other provisions relating to
meetings of Holders, including notice of the time, place or purpose of
any meeting at which any matter is to be voted on by any Holders,
waiver of any such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person
or by proxy or any other matter with respect to the exercise of any
such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a New York banking corporation
with trust powers and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
(b) The execution, delivery and performance by the Property
Trustee of this Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. This Declaration
has been duly executed and delivered by the Property Trustee and
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(c) The execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or
constitute a breach of the charter or by-laws of the Property Trustee;
and
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(d) No consent, approval or authorization of, or registration
with or notice to, any New York or federal banking authority is
required for the execution, delivery and performance by the Property
Trustee of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is duly organized, validly existing
and in good standing under the laws of the State of Delaware, with
trust power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration;
(b) The execution, delivery and performance by the Delaware
Trustee of this Declaration has been duly authorized by all necessary
corporate action on the part of the Delaware Trustee. This Declaration
has been duly executed and delivered by the Delaware Trustee and
constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(c) The execution, delivery and performance of this
Declaration by the Delaware Trustee does not conflict with or
constitute a breach of the charter or by-laws of the Delaware Trustee;
(d) The Delaware Trustee is a natural Person who is a resident
of the State of Delaware or, if not a natural Person, an entity which
has its principal place of business in the State of Delaware; and
(e) No consent, approval or authorization of, or registration
with or notice to, any Delaware or federal banking authority is
required for the execution, delivery or performance by the Delaware
Trustee of this Declaration.
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ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.1 Registration Rights Agreement; Additional Interest.
(a) The Holders of the Capital Securities, the Debentures and
the Capital Securities Guarantee (collectively, the "Registrable Securities")
are entitled to the benefits of the Registration Rights Agreement. Pursuant to
the Registration Rights Agreement, the Sponsor and the Trust have agreed for the
benefit of the Holders of Registrable Securities that: (i) they will, at the
Sponsor's cost, within 150 days after January 28, 1997, the date of the Offering
Memorandum, file a registration statement (the "Exchange Registration
Statement") relating to an Exchange Offer pursuant to which each issuer of such
respective Registrable Securities would issue amounts of such Registrable
Securities as are accepted in the Exchange Offer which shall be identical in all
respects to those exchanged, except they will have been registered under the
Securities Act and (except as set forth in the Registration Rights Agreement)
will no longer be subject to transfer restrictions under the Securities Act or
the $100,000 minimum aggregate principal or liquidation amount transfer
restriction and, if required pursuant to the terms of the Registration Rights
Agreement, file a Shelf Registration Statement with the Commission with respect
to resales of the Registrable Securities, (ii) they will use their best efforts
to cause such Exchange Registration Statement and/or Shelf Registration
Statement, as the case requires, to be declared effective by the Commission
within 180 days after the date of the Offering Memorandum and (iii) they will
use their best efforts to maintain the Shelf Registration Statement, if any,
continuously effective under the Securities Act until the third anniversary of
the effectiveness of the Shelf Registration Statement or such earlier date as is
provided in the Registration Rights Agreement (the "Effectiveness Period"). All
references herein to such Registrable Securities shall be deemed to include, as
the context may require, the Registrable Securities into which such Securities
have been exchanged pursuant to the Exchange Registration ("Exchange
Securities") and all reference to numbers or amounts of such Securities shall be
deemed to include, as the context may require, such Exchange Securities.
(b) If (i) (A) neither the Exchange Offer Registration
Statement nor a Shelf Registration Statement is filed with the
Commission on or prior to the 150th day after the date of the Offering
Memorandum, or (B) notwithstanding that the Debenture Issuer and the
Trust have consummated or will consummate an Exchange Offer, the
Debenture Issuer and the Trust are required to file a Shelf
Registration Statement and such Shelf Registration Statement is not
filed on or prior to the date required by the Registration Rights
Agreement, then commencing on the day after either such required filing
date, Additional Interest shall accrue on the principal amount of the
Debentures affected thereby, and additional Distributions shall
accumulate on the Liquidation Amount of the Capital Securities affected
thereby, at a rate of 0.25% per annum; or
(ii) (A) neither the Exchange Offer Registration Statement nor
a Shelf Registration Statement is declared effective by the Commission
on or prior to the 180th day after the date of the Offering Memorandum
or (B) notwithstanding that the Debenture Issuer and the Trust have
consummated or will consummate an Exchange Offer, the Debenture Issuer
and the Trust are required to file a Shelf Registration Statement and
such Shelf Registration Statement is not declared effective by the
Commission on or prior to the 180th day after the date of the Offering
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Memorandum, then, commencing on the 181st day after the date of the
Offering Memorandum. Additional Interest shall accrue on the principal
amount of the Debentures affected thereby, and additional Distributions
shall accumulate on the Liquidation Amount of the Capital Securities
affected thereby, at a rate of 0.25% per annum; or
(iii) (A) the Trust has not exchanged Exchange Capital
Securities for all Capital Securities or the Debenture Issuer has not
exchanged Exchange Guarantees or Exchange Subordinated Debentures for
all Guarantees or Subordinated Debentures validly tendered in
accordance with the terms of the Exchange Offer on or prior to the 30th
day after the date on which the Exchange Offer Registration Statement
was declared effective or (B) if applicable, the Shelf Registration
Statement has been declared effective and such Shelf Registration
Statement ceases to be effective at any time prior to the third
anniversary of the Closing Date or such shorter period as may be
referred to in Rule 144(k) under the Securities Act (other than after
such time as all Capital Securities have been disposed of thereunder or
otherwise cease to be Registrable Securities), then Additional Interest
shall accrue on the principal amount of the Debentures affected
thereby, and additional Distributions shall accumulate on the
Liquidation Amount of the Capital Securities affected thereby, at a
rate of 0.25% per annum commencing on (x) the 31st day after such
effective date, in the case of (A) above, or (y) the day such Shelf
Registration Statement ceases to be effective in the case of (B) above;
provided, however, that neither the Additional Interest rate on the Debentures,
nor the additional Distributions rate on the Liquidation Amount of the Capital
Securities, may exceed in the aggregate 0.25% per annum; provided, further,
however, that (1) upon the filing of the Exchange Offer Registration Statement
or a Shelf Registration Statement (in the case of Section 14.1(b)(i)), (2) upon
the effectiveness of the Exchange Offer Registration Statement or a Shelf
Registration Statement (in the case of Section 14.1(b)(ii)), or (3) upon the
exchange of Exchange Capital Securities, Exchange Guarantees and Exchange
Subordinated Debentures for all Capital Securities, Guarantees and Subordinated
Debentures tendered (in the case of Section 14.1(b)(iii)(A)), or upon the
effectiveness of the Shelf Registration Statement which had ceased to remain
effective (in the case of Section 14.1(b)(iii)(B)), Additional Interest on the
Debentures, and additional Distributions on the Liquidation Amount of the
Capital Securities as a result of this Section 14.1(b) (or the relevant
subclause thereof), as the case may be, shall cease to accumulate.
(c) Any amounts of Additional Interest and additional
Distributions due pursuant to Sections 14.1(b)(i), (ii) or (iii) above will be
payable in cash on February 1 and August 1 of each year to the Holders on the
fifteenth day preceding the relevant Distribution date; provided, however, that
the payment of such amounts may be deferred during any Extension Period.
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ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Notices.
(a) 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, certified or first class mail, as follows:
(i) if given to the Trust, in care of the mailing address set
forth below (or such other address as the Trust may give notice of to
the Property Trustee, the Delaware Trustee and the Holders):
Trenwick Capital Trust I
c/o Trenwick Group Inc.
Metro Center
One Station Place
Stamford, Connecticut 06902
Attention: Chief Financial Officer
Telecopy: (203) 353-5544
(ii) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give
notice of to the Holders):
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trustee Administration Department
Telecopy: (302) 984-4889
(iii) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as the
Property Trustee may give notice of to the Holders):
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The Chase Manhattan Bank
Global Trust Services
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Corporate Trustee Administration Department
Telecopy: (212) 946-8158
(iv) 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 Property
Trustee and the Trust):
Trenwick Group Inc.
Metro Center
One Station Place
Stamford, Connecticut 06902
Attention: Jayne T. Wiznitzer, Esq.
Vice President - Legal Affairs
and Secretary
Telecopy: (203) 353-5544
(v) if given to any other Holder, at the address set forth on
the books and records of the Trust.
(b) All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by registered,
certified or first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address
of which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
SECTION 15.2 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws; provided, however, that the provisions
of 12 Del. C. Sections 3540 and 3561 shall not apply, and, to the fullest
extent possible, it is the intent of the parties hereto the compensation payable
to any Trustee not be subject to review by any Court whether pursuant to 12 Del.
C. Section 3560 or otherwise.
SECTION 15.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
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SECTION 15.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 15.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 15.6 Partial Invalidity.
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 and shall remain in full force and effect and may be enforced
in accordance with the provisions hereof.
SECTION 15.7 Counterparts.
This Declaration may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument.
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IN WITNESS WHEREOF, the undersigned have caused this Amended
and Restated Declaration of Trust to be duly executed as of the day and year
first above written.
______________________________________________________
James F. Billett, Jr., not in his individual capacity
but solely in his capacity as Administrative Trustee
______________________________________________________
Alan L. Hunte, not in his individual capacity but
solely in his capacity as Administrative Trustee
______________________________________________________
Jane T. Wiznitzer, not in her individual capacity but
solely in her capacity as Administrative Trustee
CHASE MANHATTAN BANK DELAWARE, not in its individual
capacity but solely in its capacity as Delaware
Trustee
By:_________________________________________________
Name: John J. Cashin
Title: Senior Trust Officer
THE CHASE MANHATTAN BANK, not in its individual
capacity but solely in its capacity as Property
Trustee
By:________________________________________________
Name: G. McFarlane
Title: Vice President
TRENWICK GROUP INC.,
as Sponsor
By:_______________________________________________
Name: James F. Billett, Jr.
Title: Chairman, President and Chief Executive
Officer
<PAGE> 72
ANNEX I
TERMS OF
8.82% CAPITAL SECURITIES
8.82% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of January 31, 1997 among Trenwick Group Inc., as
Sponsor, the Chase Manhattan Bank, as Property Trustee, Chase Manhattan Bank
Delaware, as Delaware Trustee, and the Administrative Trustees named therein (as
amended from time to time, the "Declaration"), the designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Capital Securities and the Common Securities (collectively, the "Securities")
are set out below and supplement the other rights and obligations of Holders of
Securities contained in the Declaration (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 Indenture.
1. Designation and Number.
(a) Capital Securities. One hundred ten thousand (110,000)
Subordinated Capital Income Securities of the Trust, with an aggregate
Liquidation Amount (as defined in Section 2 hereof) of one hundred ten million
U.S. dollars ($110,000,000), and with a Liquidation Amount of $1,000 per
Security, are hereby designated for the purposes of identification only as
"8.82% Subordinated Capital Income Securities" (the "Capital Securities"). Upon
consummation of the Exchange Offer a second series of the Capital Securities may
be issued which shall be identical in all respects to the series of Capital
Securities issued on the Closing Date except that such Capital Securities (the
"Exchange Capital Securities") will not be subject to (i) the transfer
restrictions under the Securities Act contained in the series of Capital
Securities issued on the Closing Date (except Capital Securities issued pursuant
to a Private Exchange (as defined in the Registration Rights Agreement), which
may be subject to such restrictions, but which shall be deemed to be of the same
series as the Exchange Capital Securities), (ii) the $100,000 minimum
Liquidation Amount transfer restriction set forth in Section 9.2(n) of the
Declaration or (iii) any increase in the Distribution rate thereon under the
Registration Rights Agreement. The certificates evidencing the Capital
Securities to be issued on the Closing Date shall be substantially in the form
of Exhibit A-1 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice or
to conform to the rules of any stock exchange or quotation system on which the
Capital Securities are listed or quoted.
(b) Common Securities. Three thousand four hundred three
(3,403) Common Securities of the Trust with an aggregate Liquidation Amount with
respect to the assets of the Trust of three million four hundred three thousand
U.S. dollars ($3,403,000) and a Liquidation Amount with respect to the assets of
the Trust of $1,000 per security, are hereby designated for the purposes of
identification only as "8.82% Common Securities" (the "Common Securities"). The
certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
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2. Distributions.
(a) Subject to Section 9 hereof, Distributions payable on each
Security will be fixed at a rate per annum of 8.82% (the "Coupon Rate") of the
Liquidation Amount of $1,000 per Security (the "Liquidation Amount"), such rate
being the rate of interest payable on the Debentures to be held by the
Property Trustee. Distributions not due during an Extension Period (including
the first semi-annual period during such period) in arrears for more than one
semi-annual period will bear interest thereon compounded semi-annually at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions," as used herein, includes distributions of any such interest
(including Compounded Interest and Additional Interest, if any) unless otherwise
stated but does not include Additional Sums. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds on hand
legally available therefor.
(b) Subject to Section 9 hereof, Distributions on the
Securities will be cumulative, will accumulate from the most recent date to
which Distributions have been paid or, if no Distributions have been paid, from
January 31, 1997, and will be payable semi-annually in arrears on February 1 and
August 1 of each year, commencing on August 1, 1997, except as otherwise
described below. The amount of Distributions payable for any period will be
computed on the basis of a 360-day year consisting of twelve 30-day months and,
for any period less than 6 months, the actual months elapsed and the actual days
elapsed in a partial month in such period. If any date on which Distributions
are payable on the Securities is not a Business Day, then payment of the
Distribution payable on such date shall be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay), with the same force and effect as if made on such date (each date
on which Distributions are payable in accordance with the foregoing, a
"Distribution Date"). So long as no Event of Default has occurred and is
continuing under the Indenture, the Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period
at any time and from time to time on the Debentures for a period not exceeding
10 consecutive semi-annual periods, including the first semi-annual period
during such period (each an "Extension Period"), provided that no Extension
Period shall extend beyond the Stated Maturity of the Debentures. Upon any such
election, Distributions will be deferred during such Extension Period.
Notwithstanding such deferral, Distributions to which Holders of Securities are
entitled shall continue to accumulate additional Distributions thereon (to the
extent permitted by applicable law but not at a rate greater than the rate at
which interest is then accruing on the Debentures) at the Coupon Rate compounded
semi-annually from the relevant Distribution Dates during any such Extension
Period. Prior to the expiration of any Extension Period and so long as no Event
of Default has occurred and is continuing under the Indebenture, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together with all such
previous and further extensions within such Extension Period, may not exceed 10
consecutive semi-annual periods, including the first semi-annual period during
such Extension Period, or extend beyond the Stated Maturity of the Debentures.
Upon the expiration of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
(c) Subject to Section 9 hereof, Distributions on the
Securities will be payable to the Holders thereof as they appear on the books
and records of the Trust on the fifteenth day preceding the relevant
Distribution Date. Subject to any applicable laws and regulations and the
provisions of the
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Declaration, each such payment in respect of the Capital Securities will be made
as follows: (i) if the Capital Securities are held in global form by a Clearing
Agency (or its nominee), in accordance with the procedures of the Clearing
Agency; and (ii) if the Capital Securities are held in definitive form, by check
mailed to the address of the Holder thereof as reflected in the records of the
Registrar unless otherwise agreed by the Trust. The relevant record dates for
the Common Securities shall be the same as the record dates for the Capital
Securities. Distributions payable on any Securities that are not punctually paid
on any Distribution Date will cease to be payable to the Holder on the relevant
record date, and such defaulted Distribution will instead be payable to the
Person in whose name such Securities are registered on the special record date
or other specified date applicable to the Debentures determined in accordance
with the Indenture.
(d) In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder, such property
shall be distributed on a Pro Rata basis as set forth Section 8 hereof among the
Holders of the Securities, except as otherwise required by Section 9 hereof.
3. Liquidation Distribution Upon Dissolution.
In the event of any dissolution or termination of the Trust,
or the Sponsor otherwise gives notice of its election to liquidate the Trust
pursuant to Section 8.1(a)(iii) of the Declaration, the Trust shall be
liquidated by the Administrative Trustees as expeditiously as the Administrative
Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, and subject
to Section 9 hereof, to the Holders of the Securities a Like Amount (as defined
below) of the Debentures, unless such distribution is determined by the Property
Trustee not to be practicable, in which event such Holders will be entitled to
receive out of the assets of the Trust legally available for distribution to
Holders, after satisfaction of liabilities to creditors of the Trust as provided
by applicable law, an amount equal to the aggregate of the Liquidation Amount of
$1,000 per Security plus accumulated and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the
Securities, Securities having a Liquidation Amount equal to the principal amount
of Debentures to be paid in accordance with their terms and (ii) with respect to
a distribution of Debentures upon the liquidation of the Trust, Debentures
having a principal amount equal to the Liquidation Amount of the Securities of
the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets on hand
legally available to pay in full the aggregate Liquidation Distribution, then
the amounts payable directly by the Trust on the Securities shall be paid on a
Pro Rata basis as set forth in Section 8 hereof among the Holders of the
Securities, except as otherwise required by Section 9 hereof.
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4. Redemption and Distribution.
(a) Upon the repayment of the Debentures on the Stated
Maturity thereof or prepayment thereof (in whole or in part) prior thereto in
accordance with the terms thereof, the proceeds from such repayment or
prepayment shall be simultaneously applied by the Property Trustee (subject to
the Property Trustee having received not less than 45 days written notice to the
repayment date or prepayment date) to redeem a Like Amount of the Securities at
a redemption price equal to (i) in the case of the repayment of the Debentures
on the Stated Maturity, the Maturity Redemption Price (as defined below), (ii)
in the case of the optional prepayment of the Debentures upon the occurrence and
continuation of a Special Event, the Special Event Redemption Price (as defined
below) and (iii) in the case of the optional prepayment of the Debentures other
than as a result of the occurrence and continuance of a Special Event, the
Optional Redemption Price (as defined below). The Maturity Redemption Price, the
Special Event Redemption Price and the Optional Redemption Price are referred to
collectively as the "Redemption Price."
(b) (i) The "Maturity Redemption Price," with respect to a
redemption of Securities, shall mean an amount equal to the principal of and
accrued interest on the Debentures as of the Stated Maturity thereof.
(ii) "Special Event Redemption Price" shall mean a price equal
to the greater of (i) 100% of the Liquidation Amount of Securities to be
redeemed or (ii) the sum, as determined by a Quotation Agent (as defined in the
Indenture), of the present values of the remaining scheduled payments of
principal and interest on the Debentures to February 1, 2007 (the first date on
which the Debentures are subject to optional prepayment), discounted to the
prepayment date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months and, for any period less than 6 months, the actual months
elapsed and the actual days elapsed in a partial month in such period) at the
Adjusted Treasury Rate (as defined in the Indenture), plus, in each case,
accumulated and unpaid Distributions thereon, if any, to the date of such
prepayment.
(iii) "Optional Redemption Price" shall mean a price equal to
the outstanding principal amount of the Debentures to be redeemed, plus accrued
interest thereon to the date of prepayment.
(c) On and from the date fixed by the Administrative Trustees
for any distribution of Debentures and liquidation of the Trust and subject to
Section 9 hereof: (i) the Securities will no longer be deemed to be outstanding,
(ii) each Holder of Securities will receive a registered certificate or
certificates representing the Debentures to be delivered upon such distribution
and (iii) Securities will be deemed to represent beneficial interests in a Like
Amount of Debentures, and bearing accrued and unpaid interest in an amount equal
to the accumulated and unpaid Distributions on such Securities, until such
Securities are presented to the Administrative Trustee or their agent for
cancellation and such Debentures are transferred to the Holders of such
Securities.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accumulated and unpaid Distributions have been paid on all
Securities for all semi-annual Distribution periods that expire on or before the
date of redemption.
(e) The procedure with respect to redemptions or distributions
of Debentures shall be as follows:
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(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution Notice")
will be given by the Trust by mail to each Holder of Securities to be redeemed
or exchanged not fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will be the
date fixed for repayment or prepayment of the Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on which notices
are given pursuant to this Section 4(e)(i), a Redemption/Distribution Notice
shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders 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 allocated
on a Pro Rata basis as set forth in Section 8 hereof among the Holders of
Securities, except as otherwise required by Section 9 hereof, it being
understood that, in respect of Capital Securities registered in the name of and
held of record by a Clearing Agency or its nominee, the distribution of the
proceeds of such redemption will be made to the Clearing Agency and disbursed by
such Clearing Agency 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, such notice shall be irrevocable and (A) with
respect to Capital Securities registered in the name of or held of record by a
Clearing Agency or its nominee, by 12:00 noon, New York City time, on the
redemption date, provided that the Debenture Issuer has paid the Property
Trustee a sufficient amount of cash in connection with the related maturity or
prepayment of the Debentures by 10:00 a.m., New York City time, on the Stated
Maturity of the Debentures or the date of prepayment, as the case may be, the
Property Trustee or the Paying Agent will pay to the Clearing Agency or its
nominee funds sufficient to pay the applicable Redemption Price with respect to
such Capital Securities, and (B) with respect to Capital Securities issued in
certificated form and Common Securities, provided that the Debenture Issuer has
paid the Property Trustee a sufficient amount of cash in connection with the
related maturity or prepayment of the Debentures, the Property Trustee or the
Paying Agent will pay the relevant Redemption Price to the Holders of such
Securities against presentation to the Registrar of the certificates therefor.
If a Redemption/Distribution Notice shall have been given and funds deposited
with the Property Trustee to pay the Redemption Price (including all unpaid
Distributions) with respect to the Securities called for redemption, then
immediately prior to the close of business on the redemption date, Distributions
will cease to accumulate 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, and such Securities shall cease to be
outstanding.
(iv) Payment of accumulated and unpaid Distributions on the
redemption date of any Securities will be subject to the rights of Holders of
such Securities on the close of business on a regular record date in respect of
a Distribution Date occurring on or prior to such Redemption Date.
(v) Neither the Administrative Trustees nor the Trust shall be
required to register or cause to be registered the transfer of (A) any
Securities beginning on the opening of business 15 days
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before the day of mailing of a Redemption/Distribution Notice or (B) any
Securities selected for redemption (except the unredeemed portion of any
Security being redeemed). 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), with the same force and
effect as if made on such date fixed for redemption. If payment of the
Redemption Price in respect of any Securities is improperly withheld or refused
and not paid either by the Property Trustee or the Paying Agent or by the
Sponsor as guarantor pursuant to the relevant Securities Guarantee, or the date
fixed for redemption, Distributions on such Securities will continue to
accumulate from such 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.
(vi) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), the Sponsor or any
of its Affiliates may at any time and from time to time purchase outstanding
Capital Securities by tender, in the open market or by private agreement.
5. Voting Rights - Capital Securities.
(a) Except as provided under Sections 5(b) and 7 hereof and as
otherwise required by law and the Declaration, the Holders of the Capital
Securities will have no voting rights.
(b) So long as any Debentures are held by the Property Trustee
for the benefit of the Holders of the Trust Securities, the Trustees shall not
(i) direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or executing any trust or power
conferred on such Debenture Trustee with respect to the Debentures, (ii) waive
any past default that is waivable under Section 5.07 of the Indenture, (iii)
exercise any right to rescind or annul a declaration of acceleration of the
maturity of the principal of the Debentures or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures, where such
consent shall be required, without, in each case, obtaining the prior approval
of the Holders of a Majority in Liquidation Amount of all outstanding Capital
Securities; provided, however, that where a consent under the Indenture would
require the consent of each holder of Debentures affected thereby, no such
consent shall be given by the Property Trustee without the prior approval of
each Holder of the Capital Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Holders of the Capital
Securities except by subsequent vote of such Holders. The Property Trustee shall
notify each Holder of Capital Securities of any notice of default with respect
to the Debentures. In addition to obtaining the foregoing approvals of such
Holders of the Capital Securities, prior to taking any of the foregoing actions,
the Trustees shall obtain an Opinion of Counsel experienced in such matters to
the effect there is no more than an insubstantial risk that the Trust would not
be classified for United States federal income tax purposes as a trust subject
to the provisions of Sections 671 through 679 of the Code (a "grantor trust") on
account of such action. The foregoing provisions of this Section 5(b) shall be
in lieu of Sections 316(a)(1)(A) and (B) of the Trust Indenture Act, and
such Sections 316(a)(1)(A) and (B) are hereby expressly excluded from this
Trust Agreement.
(c) If an Event of Default under the Declaration has occurred
and is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or premium, if any, or interest on the Debentures on
any due date (including any Interest Payment Date or prepayment date or Stated
Maturity of the Debenture), then a Holder of Capital Securities may directly
institute a proceeding for enforcement of payment to such Holder of the
principal of or premium, if any, or
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interest on a Like Amount of Debentures (a "Direct Action") on or after the
respective due date specified in the Debentures. In connection with such Direct
Action, the rights of the Common Securities Holders will be subrogated to the
rights of the Holder of Capital Securities to the extent of any payment made by
the Debenture Issuer to the Holders of Capital Securities in such Direct Action.
Except as provided in the second preceding sentence, the Holders of Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.
(d) Any required approval of Holders of Capital Securities may
be given at a separate meeting of Holders of Capital Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Administrative Trustees will cause a notice of
any meeting at which Holders of Capital Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Capital Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consent.
(e) No vote or consent of the Holders of the Capital
Securities will be required for the Trust to redeem and cancel Capital
Securities or to distribute the Debentures in accordance with the Declaration
and the terms of the Securities.
(f) Notwithstanding that Holders of Capital Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Capital Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
(g) If a Debenture Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be removed at such
time by the Holders of a Majority in Liquidation Amount of the outstanding
Capital Securities. In no event will the Holders of the Capital Securities have
the right to vote to appoint, remove or replace the Administrative Trustees,
which voting rights are vested exclusively in the Sponsor as the Holder of all
the Common Securities. No resignation or removal of a Trustee and no appointment
of a successor trustee shall be effective until the acceptance of appointment by
the successor trustee in accordance with the provisions of the Declaration.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), 6(c), and 7 and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) Unless a Debenture Event of Default shall have occurred
and be continuing, any Trustee may be removed at any time by the Holder of the
Common Securities. No resignation or removal of a Trustee and no appointment of
a successor trustee shall be effective until the acceptance of appointment by
the successor trustee in accordance with the provisions of the Declaration.
(c) So long as any Debentures are held by the Property Trustee
for the benefit of the Holders of the Trust Securities, the Trustees shall not
(i) direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or execute any trust or
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power conferred on such Debenture Trustee with respect to the Debentures, (ii)
waive any past default that is waivable under Section 5.07 of the Indenture,
(iii) exercise any right to rescind or annul a declaration of acceleration of
the maturity of the principal of the Debentures or (iv) consent to any
amendment, modification or termination of the Indenture or the Debentures, where
such consent shall be required, without, in each case, obtaining the prior
approval of the Holders of a Majority in Liquidation Amount of all outstanding
Common Securities; provided, however, that where a consent under the Indenture
would require the consent of each holder of Debentures affected thereby, no such
consent shall be given by the Property Trustee without the prior approval of
each Holder of the Common Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Holders of the Common
Securities except by subsequent vote of such Holders. The Property Trustee shall
notify each Holder of Common Securities of any notice of default with respect to
the Debentures. In addition to obtaining the foregoing approvals of such Holders
of the Common Securities, prior to taking any of the foregoing actions, the
Trustees shall obtain an Opinion of Counsel experienced in such matters to the
effect there is no more than an insubstantial risk that the Trust would not be
classified for United States federal income tax purposes as a trust subject to
the provisions of Sections 671 through 679 of the Code (a "grantor trust") on
account of such action. The foregoing provisions of this Section 6(c) shall be
in lieu of Sections 316(a)(1)(A) and (B) of the Trust Indenture Act, and such
Sections 316(a)(1)(A) and (B) are hereby expressly excluded from this Trust
Agreement.
(d) If an Event of Default under the Declaration has occurred
and is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or premium, if any, or interest on the Debentures on
the due date (including any Interest Payment Date or prepayment date or Stated
Maturity of the Debenture), then a Holder of Common Securities may institute a
Direct Action for enforcement of payment to such Holder of the principal of or
premium, if any, or interest on a Like Amount of Debentures on or after the
respective due date specified in the Debentures. In connection with such Direct
Action, the rights of the Common Securities Holders will be subrogated to the
rights of the Holders of Capital Securities to the extent of any payment made by
the Debenture Issuer to Holders of Common Securities in such Direct Action.
Except as provided in the second preceding sentence, the Holders of Common
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.
(e) Any required approval of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Administrative Trustees will cause a notice of
any meeting at which Holders of Common Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Common Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
(f) No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
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7. Amendments to Declaration and Indenture.
In addition to the requirements set out in Section 12.1 of the
Declaration, the Declaration may be amended from time to time by the Sponsor as
the Holder of all of the outstanding Common Securities, the Property Trustee and
the Administrative Trustees, without the consent of the Holders of the
Securities (i) to cure any ambiguity, correct or supplement any provisions in
the Declaration that may be inconsistent with any other provisions, or to make
any other provisions with respect to matters or questions arising under the
Declaration which shall not be inconsistent with the other provisions of the
Declaration, (ii) to modify, eliminate or add to any provisions of the
Declaration to such extent as shall be necessary to ensure that the Trust will
be classified for United States federal income tax purposes as a grantor trust
at all times that any Securities are outstanding or to ensure that the Trust
will not be required to register as an Investment Company under the Investment
Company Act, or (iii) to qualify or maintain qualification of the Declaration
under the Trust Indenture Act; provided, however, that in each case, such action
shall not adversely affect in any material respect the interests of any Holder
of Securities. Any amendments of the Declaration pursuant to the foregoing shall
become effective when notice thereof is sent to the Holders of the Securities.
The Declaration also may be amended by the Trustees and the Sponsor as the
Holder of all the outstanding Common Securities (i) with the consent of Holders
representing a Majority in Liquidation Amount of all outstanding Securities and
(ii) upon receipt by the Trustees of an Opinion of Counsel to the effect that
such amendment or the exercise of any power granted to the Trustees in
accordance with such amendment will not affect the Trust's status as a grantor
trust for United States federal income tax purposes or the Trust's exemption
from status as an Investment Company under the Investment Company Act; provided
that, without the consent of each Holder of Securities, the Declaration may not
be amended to (i) change the amount or timing of any Distribution
on the Securities or otherwise adversely affect the amount of any Distribution
required to be made in respect of the Securities as of a specified date or (ii)
restrict the right of a Holder of Securities to institute suit for the
enforcement of any such payment on or after such date.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate Liquidation Amount of the Securities
held by the relevant Holder in relation to the aggregate Liquidation Amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the Capital
Securities pro rata according to the aggregate Liquidation Amount of Capital
Securities held by the relevant Holder relative to the aggregate Liquidation
Amount of all Capital Securities outstanding, and only after satisfaction of all
amounts owed to the Holders of the Capital Securities, to each Holder of Common
Securities pro rata according to the aggregate Liquidation Amount of Common
Securities held by the relevant Holder relative to the aggregate Liquidation
Amount of all Common Securities outstanding.
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9. Ranking.
The Capital Securities rank pari passu with the Common
Securities and payment thereon shall be made Pro Rata with the Common
Securities, except that, if an Event of Default under the Declaration occurs and
is continuing, no payments in respect of Distributions on, or payments upon
liquidation, redemption or otherwise with respect to, the Common Securities
shall be made until the Holders of the Capital Securities shall be paid in full
the Distributions, Redemption Price, Liquidation Distribution and other payments
to which they are entitled at such time.
10. Acceptance of Securities Guarantee and Indenture.
Each Holder of Capital Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
12. Additional Interest.
If the Debenture Issuer fails to comply with its obligations
under the Registration Rights Agreement or if the Exchange Offer Registration
Statement (as defined in the Registration Rights Agreement) or the Shelf
Registration Statement (as defined in the Registration Rights Agreement) fails
to become effective, then Additional Interest shall accrue on the principal
amount of the Debentures affected thereby, and additional Distributions shall
accumulate on the Liquidation Amount of the Trust Securities affected thereby,
each at a rate of 0.25% per annum as more fully set forth in Article XIV of the
Declaration.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Capital Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture (including any supplemental indenture) to a
Holder without charge on written request to the Sponsor at its principal place
of business.
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EXHIBIT D
(to Exhibit 4.5)
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS GLOBAL SECURITY IS A GLOBAL CAPITAL SECURITY, INSERT:
THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS
CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY
THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.]
[IF THIS GLOBAL SECURITY IS A GLOBAL SECURITY, INSERT: UNLESS
THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE TRUST OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
A1-1
<PAGE> 83
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF
REPRESENTS AND ACKNOWLEDGES THAT IT EITHER (A) IS NOT A PLAN SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND IS NOT PURCHASING SUCH
SECURITIES (OR INTEREST THEREIN) ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY SUCH
PLAN OR (B) IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER PTCE 96-23,
95-60, 91-38, 90-1 OR 84-14.
THE HOLDER OF THIS CAPITAL SECURITY FURTHER AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
A1-2
<PAGE> 84
Certificate No. _________ No. of Capital Securities ________
CUSIP NO. _______________
Certificate Evidencing Exchange Subordinated Capital Income Securities
of
TRENWICK CAPITAL TRUST I
8.82% Exchange Subordinated Capital Income Securities
(Liquidation Amount $1,000 per Capital Security)
TRENWICK CAPITAL TRUST I, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
___________________ (the "Holder") is the registered owner of __________________
Exchange Subordinated Capital Income Securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the 8.82%
Subordinated Capital Income Securities (Liquidation Amount $1,000 per Capital
Security) (the "Capital Securities"). The Capital Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed, in proper form for transfer
and otherwise complying with the terms and conditions of the Declaration (as
hereinafter defined). The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities represented
hereby are set forth herein, on the reverse hereof and in the provisions of the
Amended and Restated Declaration of Trust dated as of January 31, 1997, among
Trenwick Group Inc., as Sponsor, The Chase Manhattan Bank, as Property Trustee,
Chase Manhattan Bank Delaware, as Delaware Trustee, and the Administrative
Trustees named therein, as the same may be amended from time to time (the
"Declaration"), and shall in all respects be subject to the provisions thereof,
including the designation of the terms of the Capital Securities as set forth in
Annex I to the Declaration. Each capitalized term used but not defined herein or
in any legend form or certificate hereon shall have the meaning given it in the
Declaration. The Sponsor will provide a copy of the Declaration, the Capital
Securities Guarantee and the Indenture to any Holder without charge upon written
request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Capital Securities Guarantee to the extent provided therein.
By its acceptance hereof, the Holder agrees (i) to treat, for
United States federal income tax purposes, the Debentures as indebtedness and
the Capital Securities as evidence of indirect beneficial ownership in the
Debentures and (ii) to be bound by the terms of the Registration Rights
Agreement.
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<PAGE> 85
IN WITNESS WHEREOF, the Trust has duly executed this
certificate.
Dated: ____________, 1997
TRENWICK CAPITAL TRUST I
By:_________________________________________________
[Name]
Not in his individual capacity but solely in his
capacity as Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the
within-mentioned Declaration.
THE CHASE MANHATTAN BANK,
as Property Trustee
By:_________________________________________________
Authorized Officer
A1-4
<PAGE> 86
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed
at a rate per annum of 8.82% (the "Coupon Rate") of the Liquidation Amount of
$1,000 per Capital Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions not due during an
Extension Period (including the first semi-annual period during such period) in
arrears for more than one semi-annual period will bear interest thereon
compounded semi-annually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions," as used herein, includes such cash
distributions and any such interest payable (including Compounded Interest and
Additional Interest, if any) unless otherwise stated but does not include
Additional Sums. A Distribution is payable only to the extent that payments are
made in respect of the Debentures held by the Property Trustee and to the extent
the Trust has funds on hand legally available therefor.
Distributions on the Capital Securities will be cumulative,
will accumulate from the most recent date to which Distributions have been paid
or, if no Distributions have been paid, from January 31, 1997 and will be
payable semi-annually in arrears on February 1 and August 1 of each year,
commencing on August 1, 1997, except as otherwise described below and in the
Declaration. Distributions will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period less than 6 months, the
actual months elapsed and the actual days elapsed in a partial month in such
period.
As long as no Event of Default has occurred and is continuing,
the Debenture Issuer has the right under the Indenture, at any time and from
time to time during the term of the Debentures, to defer payments of interest by
extending the interest payment period on the Debentures for a period not
exceeding 10 consecutive semi-annual periods, including the first such
semi-annual period during such extension period (an "Extension Period"), during
which Extension Period no interest shall be due and payable, provided that no
Extension Period shall extend beyond the Stated Maturity of the Debentures. Upon
any such election, semi-annual Distributions on the Capital Securities will be
deferred by the Trust during the term of the Extension Period. Distributions
will continue to accumulate interest thereon (to the extent permitted by
applicable law, but not exceeding the rate of interest then accruing on the
Debentures) at the Coupon Rate compounded semi-annually during any such
Extension Period. Before the termination of any such Extension Period, and as
long as no Event of Default has occurred and is continuing under the Indenture,
the Debenture Issuer may further extend such Extension Period, provided that
such Extension Period, together with all such previous and further extensions
within such Extension Period, may not exceed 10 consecutive semi-annual periods
or extend beyond the Stated Maturity of the Debentures. Payments of
Distributions that have accumulated during any Extension Period will be payable
to Holders as they appear on the books and records of the Trust on the record
date for the first scheduled Distribution payment date following the expiration
of such Extension Period. Upon the expiration of any Extension Period and the
payment of all accrued and unpaid interest and any additional amounts then due,
the Debenture Issuer may commence a new Extension Period, subject to the above
requirements.
The Administrative Trustees shall, at the direction of the
Sponsor, at any time dissolve the Trust and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust or,
simultaneously with any redemption of the Debentures, cause a Like Amount of the
Securities to be redeemed by the Trust.
The Capital Securities shall be redeemable as provided in the
Declaration.
A1-5
<PAGE> 87
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Capital Security Certificate to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert assignee's social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
agent to transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:_____________________
Signature:________________
(Sign exactly as your name appears on the other side of this
Capital Security Certificate)
Signature Guarantee:________________________________
______________________
* Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities and Exchange Act of 1934, as amended.
A1-6
<PAGE> 1
EXHIBIT 4.7
TRENWICK GROUP INC.
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EXCHANGE CAPITAL SECURITIES GUARANTEE AGREEMENT
DATED AS OF , 1997
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I DEFINITIONS AND INTERPRETATION................................................ 1
SECTION 1.1 Definitions and Interpretation........................................ 1
ARTICLE II TRUST INDENTURE ACT.......................................................... 4
SECTION 2.1 Trust Indenture Act; Application...................................... 4
SECTION 2.2 List of Holders of Securities......................................... 4
SECTION 2.3 Reports by Exchange Capital Securities Guarantee Trustee.............. 4
SECTION 2.4 Periodic Reports to Exchange Capital Securities Guarantee Trustee..... 4
SECTION 2.5 Evidence of Compliance with Conditions Precedent...................... 5
SECTION 2.6 Events of Default; Waiver............................................. 5
SECTION 2.7 Event of Default; Notice.............................................. 5
SECTION 2.8 Conflicting Interests................................................. 5
ARTICLE III POWERS, DUTIES AND RIGHTS OF THE EXCHANGE CAPITAL SECURITIES GUARANTEE
TRUSTEE............................................................................... 5
SECTION 3.1 Powers and Duties of the Exchange Capital Securities Guarantee
Trustee............................................................... 5
SECTION 3.2 Certain Rights of Exchange Capital Securities Guarantee Trustee....... 7
SECTION 3.3 Not Responsible for Recitals or Issuance of Exchange Capital
Securities Guarantee.................................................. 8
ARTICLE IV EXCHANGE CAPITAL SECURITIES GUARANTEE TRUSTEE................................ 8
SECTION 4.1 Exchange Capital Securities Guarantee Trustee; Eligibility............ 8
SECTION 4.2 Appointment, Removal and Resignation of Exchange Capital Securities
Guarantee Trustee..................................................... 9
ARTICLE V GUARANTEE..................................................................... 9
SECTION 5.1 Guarantee............................................................. 9
SECTION 5.2 Waiver of Notice and Demand........................................... 10
SECTION 5.3 Obligations Not Affected.............................................. 10
SECTION 5.4 Rights of Holders..................................................... 10
SECTION 5.5 Guarantee of Payment.................................................. 11
SECTION 5.6 Subrogation........................................................... 11
SECTION 5.7 Independent Obligations............................................... 11
ARTICLE VI LIMITATION OF TRANSACTION; SUBORDINATION..................................... 11
SECTION 6.1 Limitation of Transactions............................................ 11
SECTION 6.2 Ranking............................................................... 12
ARTICLE VII TERMINATION................................................................. 12
SECTION 7.1 Termination........................................................... 12
ARTICLE VIII INDEMNIFICATION............................................................ 12
SECTION 8.1 Exculpation........................................................... 12
SECTION 8.2 Indemnification....................................................... 13
ARTICLE IX MISCELLANEOUS................................................................ 13
SECTION 9.1 Successors and Assigns................................................ 13
SECTION 9.2 Amendments............................................................ 13
SECTION 9.3 Notices............................................................... 14
SECTION 9.4 Benefit............................................................... 15
SECTION 9.5 Governing Law......................................................... 15
</TABLE>
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<PAGE> 3
EXCHANGE CAPITAL SECURITIES GUARANTEE AGREEMENT
This EXCHANGE CAPITAL SECURITIES GUARANTEE AGREEMENT (the "Exchange Capital
Securities Guarantee"), dated as of , 1997, is executed and delivered
by Trenwick Group Inc., a corporation existing under the laws of the State of
Delaware (the "Guarantor"), and The Chase Manhattan Bank, a New York banking
corporation, as trustee (the "Exchange Capital Securities Guarantee Trustee"),
for the benefit of the Holders (as defined herein) from time to time of the
Exchange Capital Securities (as defined herein) of Trenwick Capital Trust I, a
statutory business trust formed under the laws of the State of Delaware (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of January 31, 1997, executed by and among the Trustees
(as defined therein) and the Guarantor, as Sponsor, the Issuer issued on January
31, 1997, one hundred ten thousand (110,000) 8.82% Subordinated Capital Income
Securities (having an aggregate liquidation amount of one hundred ten million
U.S. dollars ($110,000,000)) (collectively, the "Old Capital Securities") and in
connection with an Exchange Offer (as defined in the Declaration) is executing
and delivering this Exchange Capital Securities Guarantee for the benefit of the
holders of the 8.82% Exchange Subordinated Capital Income Securities
(collectively, the "Exchange Capital Securities"); and
WHEREAS, as incentive for the Holders (as defined herein) to exchange their
Old Capital Securities for an equal aggregate liquidation amount of Exchange
Capital Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Exchange Capital Securities Guarantee, to
pay to the Holders of the Exchange Capital Securities the Guarantee Payments (as
defined below). The Guarantor agrees to make certain other payments on the terms
and conditions set forth herein; and
WHEREAS, the Guarantor executed and delivered on January 31, 1997 a
guarantee agreement (the "Old Capital Securities Guarantee") with substantially
identical terms to this Exchange Capital Securities Guarantee, for the benefit
of the holders of the Old Capital Securities and a guarantee agreement ("Common
Securities Guarantee"), with substantially identical terms to this Exchange
Capital Securities Guarantee, for the benefit of the holders of the Common
Securities (as defined herein), except that if an Event of Default (as defined
in the Declaration) has occurred and is continuing, the rights of holders of the
Common Securities to receive Guarantee Payments under the Common Securities
Guarantee are subordinated, to the extent and in the manner set forth in the
Common Securities Guarantee, to the rights of Holders of Exchange Capital
Securities and the Old Capital Securities to receive Guaranty Payments under
this Exchange Capital Securities Guarantee and the Old Capital Securities
Guarantee, as the case may be.
NOW, THEREFORE, in consideration of the exchange by each Holder of its Old
Capital Securities for Exchange Capital Securities, which exchange the Guarantor
hereby acknowledges shall benefit the Guarantor, the Guarantor executes and
delivers this Exchange Capital Securities Guarantee for the benefit of the
Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Exchange Capital Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Exchange Capital Securities
Guarantee but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) Terms defined in the Declaration as at the date of execution of
this Exchange Capital Securities Guarantee have the same meaning when used
in this Exchange Capital Securities Guarantee unless otherwise defined in
this Exchange Capital Securities Guarantee;
(c) a term defined anywhere in this Exchange Capital Securities
Guarantee has the same meaning throughout;
<PAGE> 4
(d) all references to "the Exchange Capital Securities Guarantee" or
"this Exchange Capital Securities Guarantee" are to this Exchange Capital
Securities Guarantee as modified, supplemented or amended from time to
time;
(e) all references in this Exchange Capital Securities Guarantee to
Articles and Sections are to Articles and Sections of this Exchange Capital
Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act of 1939, as amended
("Trust Indenture Act") has the same meaning when used in this Exchange
Capital Securities Guarantee, unless otherwise defined in this Exchange
Capital Securities Guarantee or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" has the meaning given to that term in Rule 405 under the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday or a Sunday, or a day on
which banking institutions in The City of New York are authorized or required by
law or executive order to close.
"Exchange Capital Securities Guarantee Trustee" means The Chase Manhattan
Bank, a New York banking corporation, until a Successor Exchange Capital
Securities GuaranteeTrustee has been appointed and has accepted such appointment
pursuant to the terms of this Exchange Capital Securities Guarantee and
thereafter means each such Successor Exchange Capital Securities Guarantee
Trustee.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Exchange Capital
Securities Guarantee Trustee at which the corporate trust business of the
Exchange Capital Securities Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution of this
Agreement is located at The Chase Manhattan Bank, 55 Water Street, Room 234,
North Building, New York, New York 10041.
"Covered Person" means any Holder or beneficial owner of Exchange Capital
Securities.
"Debentures" means the series of subordinated debt securities of the
Guarantor designated the 8.82% Junior Subordinated Deferrable Interest
Debentures due February 1, 2037 held by the Property Trustee (as defined in the
Declaration) of the Issuer.
"Exchange Debentures" means the series of subordinated debt securities of
the Guarantor designated the 8.82% Exchange Junior Subordinated Deferrable
Interest Debentures due February 1, 2037 held by the Property Trustee (as
defined in the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its payments
or other obligations under this Exchange Capital Securities Guarantee.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Exchange Capital Securities, to the extent not
paid by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions
(as defined in the Declaration) that are required to be paid on Exchange Capital
Securities to the extent the Issuer has funds on hand legally available therefor
at such time, (ii) the applicable Redemption Price (as defined in Annex I to the
Declaration) with respect to Exchange Capital Securities called for redemption,
to the extent the Issuer has funds on hand legally available therefor at such
time and (iii) upon a voluntary or involuntary termination and liquidation of
the Issuer (other than in connection with the distribution of Debentures to the
Holders in exchange for Exchange Capital Securities as provided in the
Declaration), the lesser of (a) the Liquidation Distribution (as defined in the
Declaration) and (b) the amount of assets of the Issuer remaining available for
distribution to Holders to the extent the Trust has funds on hand legally
available therefore at such time. If an Event of Default (as defined in the
Indenture) has occurred and is continuing, no guarantee payments under the
Common Securities Guarantee with respect to the Common Securities shall be made
until the Holders of Exchange Capital Securities and the Old Capital
2
<PAGE> 5
Securities shall be paid in full the Guarantee Payments to which they are
entitled under this Exchange Capital Securities Guarantee and the Old Capital
Securities Guarantee, as the case may be.
"Holder" means any holder, as registered on the books and records of the
Issuer, of any Exchange Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of all Exchange
Capital Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Exchange Capital Securities Guarantee
Trustee, any Affiliate of the Exchange Capital Securities Guarantee Trustee, or
any officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Exchange Capital
Securities Guarantee Trustee.
"Indenture" means the Indenture, dated as of January 31, 1997, between the
Guarantor (the "Debenture Issuer") and The Chase Manhattan Bank, as trustee,
pursuant to which the Debentures are to be issued to the Property Trustee.
"Majority in Liquidation Amount of the Capital Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of all Exchange Capital
Securities, voting separately as a class, of more than 50% of the aggregate
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all Exchange
Capital Securities.
"Officers' Certificate" means, with respect to any person, a certificate
signed by the Chairman, a Vice Chairman, the Chief Executive Officer, the
President, a Vice President (however designated), the Secretary or an Assistant
Secretary of the Guarantor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Exchange Capital
Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Other Debentures" means only those junior subordinated debentures issued
by the Guarantor from time to time and sold to trusts to be established by the
Guarantor (if any), which are in each case similar to the Issuer.
"Other Guarantees" means any guarantee now or hereafter to be entered into
by the Guarantor in respect to any capital securities or common securities of
any trust similar to the Issuer, or of any trustee of such trust, or of a
partnership or other entity affiliated with the Guarantor that is a financing
vehicle of the Guarantor.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" when used with respect to the Exchange Capital
Securities Guarantee Trustee, means any officer of the Exchange Capital
Securities Guarantee Trustee with direct responsibility for the administration
of this Exchange Capital Securities Guarantee and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
3
<PAGE> 6
"Successor Exchange Capital Securities Guarantee Trustee" means a successor
Exchange Capital Securities Guarantee Trustee possessing the qualifications to
act as Exchange Capital Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
This Exchange Capital Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Exchange Capital
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and if and to the extent that any provision of this Exchange Capital
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 List of Holders of Securities
(a) The Guarantor shall provide the Exchange Capital Securities Guarantee
Trustee (unless the Exchange Capital Securities Guarantee Trustee is otherwise
the registrar of the Exchange Capital Securities) with a list, in such form as
the Exchange Capital Securities Guarantee Trustee may reasonably require, of the
names and addresses of the Holders of the Exchange Capital Securities ("List of
Holders") as of such date, (i) within one Business Day after each record date,
and (ii) at any other time within 30 days of receipt by the Guarantor of a
written request for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Exchange Capital Securities Guarantee
Trustee; provided, that the Guarantor shall not be obligated to provide such
List of Holders at any time when the List of Holders does not differ from the
most recent List of Holders given to the Exchange Capital Securities Guarantee
Trustee by the Guarantor. The Exchange Capital Securities Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Exchange Capital Securities Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by Exchange Capital Securities Guarantee Trustee
Within 60 days after May 15 of each year, commencing May 15, 1997, the
Exchange Capital Securities Guarantee Trustee shall provide to the Holders of
the Exchange Capital 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 Exchange Capital Securities
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Exchange Capital Securities Guarantee Trustee
The Guarantor shall provide to the Exchange Capital Securities Guarantee
Trustee such documents, reports and information as required by Section 314 (if
any) and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act. Delivery of such reports, information and
documents to the Exchange Capital Securities Guarantee Trustee is for
informational purposes only and the Exchange Capital Securities Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Guarantor's compliance with any of its covenants
hereunder (as to which the Exchange Capital Securities Guarantee Trustee is
entitled to rely exclusively on Officers' Certificates).
4
<PAGE> 7
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Exchange Capital Securities Guarantee
Trustee such evidence of compliance with any conditions precedent, if any,
provided for in this Exchange Capital Securities Guarantee that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in Liquidation Amount of Exchange Capital
Securities may, by vote, on behalf of the holders of all of the Exchange Capital
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Exchange Capital Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice
(a) The Exchange Capital Securities Guarantee Trustee shall, within 90 days
after the occurrence of a default with respect to this Exchange Capital
Securities Guarantee known to a Responsible Officer of the Exchange Capital
Securities Guarantee Trustee, mail by first class postage prepaid, to all
Holders of the Exchange Capital Securities, notices of all defaults actually
known to a Responsible Officer of the Exchange Capital Securities Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, except in the case of default in the payment of any Guarantee
Payment, the Exchange Capital Securities Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee, or a trust committee of directors and/or Responsible Officers of the
Exchange Capital Securities Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the holders of the Exchange
Capital Securities.
(b) The Exchange Capital Securities Guarantee Trustee shall not be deemed
to have knowledge of any Event of Default unless the Exchange Capital Securities
Guarantee Trustee shall have received written notice, or a Responsible Officer
of the Exchange Capital Securities Guarantee Trustee charged with the
administration of the Declaration shall have obtained actual knowledge, of such
Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Exchange Capital Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE
EXCHANGE CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Exchange Capital Securities Guarantee
Trustee
(a) This Exchange Capital Securities Guarantee shall be held by the
Exchange Capital Securities Guarantee Trustee for the benefit of the Holders,
and the Exchange Capital Securities Guarantee Trustee shall not transfer this
Exchange Capital Securities Guarantee to any Person except a Holder exercising
his or her rights pursuant to Section 5.4(b) or to a Successor Exchange Capital
Securities Guarantee Trustee upon acceptance by such Successor Exchange Capital
Securities Guarantee Trustee of its appointment to act as Successor Exchange
Capital Securities Guarantee Trustee. The right, title and interest of the
Exchange Capital Securities Guarantee Trustee shall automatically vest in any
Successor Exchange Capital Securities Guarantee Trustee, and such vesting and
succession of title shall be effective whether or not documents have
5
<PAGE> 8
been executed and delivered pursuant to the appointment of such Successor
Exchange Capital Securities Guarantee Trustees.
(b) If an Event of Default actually known to a Responsible Officer of the
Exchange Capital Securities Guarantee Trustee has occurred and is continuing,
the Exchange Capital Securities Guarantee Trustee shall enforce this Exchange
Capital Securities Guarantee for the benefit of the Holders.
(c) The Exchange Capital Securities Guarantee Trustee, before the
occurrence of any Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Exchange Capital Securities Guarantee, and no
implied covenants shall be read into this Exchange Capital Securities Guarantee
against the Exchange Capital Securities Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section 2.6)
and is actually known to a Responsible Officer of the Exchange Capital
Securities Guarantee Trustee, the Exchange Capital Securities Guarantee Trustee
shall exercise such of the rights and powers vested in it by this Exchange
Capital Securities Guarantee, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Exchange Capital Securities Guarantee shall be
construed to relieve the Exchange Capital Securities Guarantee Trustee from
liability for its own negligent action, its own negligent failure to act, to 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 Exchange Capital Securities
Guarantee Trustee shall be determined solely by the express provisions
of this Exchange Capital Securities Guarantee, and the Exchange Capital
Securities Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth
in this Exchange Capital Securities Guarantee, and no implied covenants
or obligations shall be read into this Exchange Capital Securities
Guarantee against the Exchange Capital Securities Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Exchange Capital
Securities Guarantee Trustee, the Exchange Capital Securities Guarantee
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Exchange Capital Securities Guarantee Trustee
and conforming to the requirements of this Exchange Capital Securities
Guarantee; but in the case of any such certificates or opinions that by
any provision hereof are specifically required to be furnished to the
Exchange Capital Securities Guarantee Trustee, the Exchange Capital
Securities Guarantee Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Exchange Capital Securities Guarantee;
(ii) the Exchange Capital Securities Guarantee Trustee shall not be
liable for any error of judgment made in good faith by a Responsible
Officer of the Exchange Capital Securities Guarantee Trustee, unless it
shall be proved that the Exchange Capital Securities Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Exchange Capital Securities Guarantee Trustee shall not be
liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders, of the Majority
in Liquidation Amount of the Exchange Capital Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Exchange Capital Securities Guarantee Trustee, or
exercising any trust or power conferred upon the Exchange Capital
Securities Guarantee Trustee under this Exchange Capital Securities
Guarantee; and
(iv) no provision of this Exchange Capital Securities Guarantee shall
require the Exchange Capital Securities Guarantee Trustee to expend or risk
its own funds or otherwise incur personal financial liability
6
<PAGE> 9
in the performance of any of its duties or in the exercise of any of its
rights or powers, if the Exchange Capital Securities Guarantee Trustee
shall have reasonable grounds for believing that the repayment of such
funds or liability is not reasonably assured to it under the terms of this
Exchange Capital Securities Guarantee or indemnity, reasonably satisfactory
to the Exchange Capital Securities Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Exchange Capital Securities Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Exchange Capital Securities Guarantee Trustee may conclusively
rely, and shall be fully protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or documents reasonably believed by
it to be genuine and to have been signed, sent or presented by the proper
party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Exchange Capital Securities Guarantee may be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Exchange Capital
Securities Guarantee, the Exchange Capital Securities Guarantee Trustee
shall deem it desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the Exchange Capital
Securities Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request evidence
as to such matter from the Guarantor, which evidence shall be promptly
delivered by the Guarantor.
(iv) The Exchange Capital Securities Guarantee Trustee shall have no
duty to see to any recording, filing or registration of any instrument (or
any rerecording, refiling or registration thereof).
(v) The Exchange Capital Securities Guarantee Trustee may consult with
counsel of its selection, and the advise or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion. Such
counsel may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees. The Exchange Capital Securities Guarantee
Trustee shall have the right at any time to seek instructions concerning
the administration of this Exchange Capital Securities Guarantee from any
court of competent jurisdiction.
(vi) The Exchange Capital Securities Guarantee Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by this
Exchange Capital Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Exchange Capital
Securities Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Exchange Capital Securities Guarantee Trustee, against
the costs, expenses (including attorneys' fees and expenses and the
expenses of the Exchange Capital Securities Guarantee Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Exchange Capital Securities Guarantee
Trustee; provided that, nothing contained in this Section 3.2(a)(vi) shall
be taken to relieve the Exchange Capital Securities Guarantee Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Exchange Capital Securities
Guarantee in the case of an Event of Default.
(vii) The Exchange Capital Securities Guarantee Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Exchange Capital
Securities Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
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<PAGE> 10
(viii) The Exchange Capital Securities Guarantee Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees, custodians or attorneys,
and the Exchange Capital Securities Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
(ix) Any action taken by the Exchange Capital Securities Guarantee
Trustee or its agents hereunder shall bind the Holders, and the signature
of the Exchange Capital Securities Guarantee Trustee or its agents alone
shall be sufficient and effective to perform any such action. No third
party shall be required to inquire as to the authority of the Exchange
Capital Securities Guarantee Trustee so to act or as to its compliance with
any of the terms and provisions of this Exchange Capital Securities
Guarantee, both of which shall be conclusively evidence by the Exchange
Capital Securities Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Exchange Capital Securities
Guarantee the Exchange Capital Securities Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Exchange Capital Securities
Guarantee Trustee (i) may request instructions from the Holders of the
Majority in Liquidation Amount of the Exchange Capital Securities, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions.
(xi) The Exchange Capital Securities Guarantee Trustee shall not be
liable for any action taken, suffered, or omitted to be taken by it in good
faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Exchange Capital
Securities Guarantee.
(b) No provision of this Exchange Capital Securities Guarantee shall be
deemed to impose any duty or obligation on the Exchange Capital Securities
Guarantee Trustee to perform any act or acts or exercise any right, power, duty
or obligation conferred or imposed on it in any jurisdiction in which it shall
be illegal, or in which the Exchange Capital Securities Guarantee Trustee shall
be unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Exchange Capital Securities
Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Exchange Capital
Securities Guarantee
The recitals contained in this Exchange Capital Securities Guarantee shall
be taken as the statements of the Guarantor, and the Exchange Capital Securities
Guarantee Trustee does not assume any responsibility for their correctness. The
Exchange Capital Securities Guarantee Trustee makes no representation as to the
validity or sufficiency of this Exchange Capital Securities Guarantee.
ARTICLE IV
EXCHANGE CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Exchange Capital Securities Guarantee Trustee; Eligibility
(a) There shall at all times be an Exchange Capital Securities Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at
8
<PAGE> 11
least annually, pursuant to law or to the requirements of the supervising
or examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Exchange Capital Securities Guarantee Trustee shall
cease to be eligible so to act under Section 4.1(a), the Exchange Capital
Securities Guarantee Trustee shall immediately resign in the manner and with the
effect set out in Section 4.2(c).
(c) If the Exchange Capital Securities Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Exchange Capital Securities Guarantee Trustee and the
Guarantor shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Exchange Capital Securities
Guarantee Trustee
(a) Subject to Section 4.2(b), the Exchange Capital Securities Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor
except during an Event of Default.
(b) The Exchange Capital Securities Guarantee Trustee shall not be removed
in accordance with Section 4.2(a) until a Successor Exchange Capital Securities
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Exchange Capital Guarantee Trustee
and delivered to the Guarantor.
(c) The Exchange Capital Securities Guarantee Trustee shall hold office
until a Successor Exchange Capital Securities Guarantee Trustee shall have been
appointed or until its removal or resignation. The Exchange Capital Securities
Guarantee Trustee may resign from office (without the need for prior or
subsequent accounting) by an instrument in writing executed by the Exchange
Capital Securities Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Exchange Capital Securities
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Exchange Capital Securities
Guarantee Trustee and delivered to the Guarantor and the resigning Exchange
Capital Securities Guarantee Trustee.
(d) If no Successor Exchange Capital Securities Guarantee Trustee shall
have been appointed and accepted appointment as provided in this Section 4.2
within 60 days after delivery of an instrument of removal or resignation, the
Exchange Capital Securities Guarantee Trustee resigning or being removed may
petition any court of competent jurisdiction for appointment of a Successor
Exchange Capital Securities Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Exchange Capital Securities Guarantee Trustee.
(e) No Exchange Capital Securities Guarantee Trustee shall be liable for
the acts or omissions to act of any Successor Exchange Capital Securities
Guarantee Trustee.
(f) Upon termination of this Exchange Capital Securities Guarantee or
removal or resignation of the Exchange Capital Securities Guarantee Trustee
pursuant to this Section 4.2, the Guarantor shall pay to the Exchange Capital
Securities Guarantee Trustee all amounts due to the Exchange Capital Securities
Guarantee Trustee accrued to the date of such termination, removal or
resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor fully, irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert other than
the defense of payment.
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<PAGE> 12
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Exchange Capital
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor under
this Exchange Capital Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Exchange Capital
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Exchange Capital Securities
or the extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Exchange Capital Securities
(other than an extension of time for payment of Distributions, Redemption
Price, Liquidation Distribution of other sum payable that results from the
extension of any interest payment period on the debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Exchange
Capital Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Exchange
Capital Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or to obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of the Majority in Liquidation Amount of the Capital
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Exchange Capital Securities Guarantee
Trustee in respect of this Exchange Capital Securities Guarantee or exercising
any trust or power conferred upon the Exchange Capital Securities Guarantee
Trustee under this Exchange Capital Securities Guarantee.
(b) If the Exchange Capital Securities Guarantee Trustee fails to enforce
this Exchange Capital Securities Guarantee, any Holder of Exchange Capital
Securities may institute a legal proceeding directly against the Guarantor to
enforce the Exchange Capital Securities Guarantee Trustee's rights under this
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<PAGE> 13
Exchange Capital Securities Guarantee, without first instituting a legal
proceeding against the Issuer, the Exchange Capital Securities Guarantee Trustee
or any person or entity. The Guarantor waives any right or remedy to require
that any action be brought first against the Issuer or any other person or
entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Exchange Capital Securities Guarantee creates a guarantee of payment
and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Exchange Capital Securities Guarantee; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any right that it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Exchange Capital
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Exchange Capital Securities Guarantee. If any amount shall
be paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Exchange Capital
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Exchange
Capital Securities Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.3 thereof.
ARTICLE VI
LIMITATION OF TRANSACTION; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Exchange Capital Securities remain outstanding, if at any
time (i) there shall have occurred any event of which the Guarantor has actual
knowledge that (x) is, or with the giving of notice or the lapse of time, or
both, would constitute an Event of Default and (y) in respect of which the
Guarantor shall not have taken reasonable steps to cure, (ii) the Guarantor
shall be in default with respect to its payment of any obligations under this
Exchange Capital Securities Guarantee and the Debentures held by the Property
Trustee, or (iii) the Guarantor shall have given notice of its election of the
exercise of its right to defer payment of interest pursuant to Section 16.01 of
the Indenture and any such extension shall be continuing, then the Guarantor
shall not;
(1) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to any of the
Guarantor's capital stock (which includes common and preferred stock);
(2) make any payment of principal, premium, if any, or interest on or
repay or repurchase or redeem any debt securities of the Guarantor
(including any Other Debentures) that rank pari passu with or junior in
right of payment to the Debentures; or
(3) make any guarantee payments with respect to any guarantee by the
Guarantor of the debt securities of any subsidiary of the Guarantor
(including Other Guarantees) if such guarantee ranks pari passu or junior
in right of payment to the Debentures other than (a) dividends or
distributions in shares of, or options, warrants, rights to subscribe for
or purchase shares of common stock of the Guarantor, (b) any declaration of
a dividend in connection with the implementation of a stockholder's rights
plan, or
11
<PAGE> 14
the issuance of stock under any such plan in the future, or the redemption
or repurchase of any such rights pursuant thereto, (c) payments under the
Exchange Capital Securities Guarantee, (d) as a direct result of, and only
to the extent necessary to avoid the issuance of fractional shares of the
Guarantor's capital stock following, a reclassification of the Guarantor's
capital stock or the exchange or the conversion of one class or series of
the Guarantor's capital stock for another class or series of the
Guarantor's capital stock, (e) the purchase of fractional interests in
shares of the Guarantor's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted
or exchanged, and (f) purchases of common stock related to the issuance of
common stock or rights under any of the Guarantor's benefit plans for its
directors, officers or employees or any of the Guarantor's dividend
reinvestment plans.
SECTION 6.2 Ranking
This Exchange Capital Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor (other than obligations in
respect to Other Guarantees), (ii) pari passu with (A) the most senior preferred
or preference stock now or hereafter issued by the Guarantor, and (B) with any
Other Guarantee, the Old Capital Securities Guarantee and the Common Securities
Guarantee, and (iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Exchange Capital Securities Guarantee shall terminate (i) upon full
payment of the Redemption Price (as defined in the Declaration) of all Exchange
Capital Securities, or (ii) upon liquidation of the Issuer, the full payment of
the amounts payable in accordance with the Declaration or the distribution of
the Debentures to the Holders of all of the Exchange Capital Securities.
Notwithstanding the foregoing, this Exchange Capital Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of Exchange Capital Securities must restore payment of any sums
paid under the Exchange Capital Securities or under this Exchange Capital
Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Exchange Capital
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Exchange Capital Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Guarantor and upon such information, opinion, reports or
statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Exchange Capital Securities might properly be
paid.
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<PAGE> 15
SECTION 8.2 Indemnification
(a) The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its power or duties hereunder. The obligation to indemnify
as set forth in this Section 8.2 shall survive the termination of this Exchange
Capital Securities Guarantee.
(b) Each Indemnified Person shall give prompt notice to the Guarantor of
any action threatened commenced against it in respect of which any indemnity is
sought hereunder, enclosing a copy of all papers served on, and notices and
demands delivered to, such Indemnified Person, if any, but failure so to notify
the Guarantor shall not relieve the Guarantor from any liability which it may
have under this Section 8.2, except to the extent that it is materially
prejudiced by such failure. The Guarantor shall be entitled to assume the
defense of any such action or proceeding with counsel reasonably satisfactory to
the Indemnified Person who shall not, except with the consent of the Indemnified
Person, be counsel to the Guarantor. Upon assumption by the Guarantor of the
defense of any such action or proceeding, the Indemnified Person shall have the
right to participate in such action or proceeding and to retain its own counsel,
but the Guarantor shall not be liable for any legal fees or expenses
subsequently incurred by such Indemnified Person in connection with the defense
thereof unless (i) the Guarantor has agreed to pay such fees and expenses, (ii)
the Guarantor shall have failed to employ counsel reasonably satisfactory to the
Indemnified Person in a timely manner, or (iii) the Indemnified Person shall
have been advised by counsel (who shall not be employed by such Indemnified
Person and who shall be reasonably satisfactory to the Guarantor) that such
representation would constitute an actual or potential conflict of interests for
counsel selected by the Guarantor. The Guarantor shall not consent to the terms
of any compromise or settlement of any action defended by the Guarantor in
accordance with the foregoing without the prior consent of the Indemnified
Person, and the Indemnified Person shall not consent to the terms of any
compromise or settlement of any action being defended by the Guarantor in
accordance with the foregoing without the prior consent of the Guarantor.
Notwithstanding the immediately preceding sentence, if at any time an
Indemnified Person shall have requested the Guarantor to reimburse the
Indemnified Person for fees and expenses of counsel as contemplated above, the
Guarantor agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into more
than 30 business days after receipt by the Guarantor of the aforesaid request
and (ii) the Guarantor shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Exchange Capital Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Exchange Capital Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the rights
of Holders (in which case no consent of Holders will be required), this Exchange
Capital Securities Guarantee may only be amended with the prior approval of the
Holders of at least a Majority in Liquidation Amount of the Exchange Capital
Securities. The provisions of Section 12.2 of the Declaration with respect to
meetings of Holders of the Exchange Capital Securities apply to the giving of
such approval.
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<PAGE> 16
SECTION 9.3 Notices
All notices provided for in this Exchange Capital Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administrative Trustees at
the Issuer's mailing address set forth below (or such other address as to
which the Issuer may give notice to the Holders of the Exchange Capital
Securities):
Trenwick Capital Trust I
Metro Center
One Station Place
Stamford, Connecticut
Attention: Chief Financial Officer
Telecopy: (203) 353-5544
with a copy to:
Baker & McKenzie
805 Third Avenue
New York, New York 10022
Attention: James R. Cameron, Esq.
Telecopy: (212) 759-9133
(b) If given to the Exchange Capital Securities Guarantee Trustee, at
the Exchange Capital Securities Guarantee Trustee's mailing address set
forth below (or such other address as to which the Exchange Capital
Securities Guarantee Trustee may give notice to the Holders of the Exchange
Capital Securities);
The Chase Manhattan Bank
55 Water Street, Room 234
North Building
New York, New York 10041
Attention: Corporate Trust Administration
Telecopy: (212) 638-7380
(c) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as to which the Guarantor may give
notice to the Holders of the Exchange Capital Securities):
Trenwick Group Inc.
Metro Center
One Station Place
Stamford, Connecticut 06902
Attention: Jane T. Wiznitzer
Vice President - Legal Affairs
and Secretary
Telecopy: (203) 353-5544
(d) If given to any Holder of Exchange Capital Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery,
such notice or other document shall be deemed to have been delivered on the date
of such refusal.
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<PAGE> 17
SECTION 9.4 Benefit
This Exchange Capital Securities Guarantee is solely for the benefit of the
Holders of the Exchange Capital Securities and, subject to Section 3.1(a), is
not separately transferable from the Exchange Capital Securities.
SECTION 9.5 Governing Law
THIS EXCHANGE CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
THIS EXCHANGE CAPITAL SECURITIES GUARANTEE is executed as of the day and
year first above written.
TRENWICK GROUP INC.,
as Guarantor
By:
------------------------------------
James F. Billett, Jr.
Chairman, President and Chief
Executive Officer
THE CHASE MANHATTAN BANK, as
Exchange Capital Securities Guarantee
Trustee
By:
------------------------------------
Name:
Title:
15
<PAGE> 1
Exhibit 4.8
REGISTRATION RIGHTS AGREEMENT
Dated as of January 31, 1997
among
TRENWICK GROUP INC.
TRENWICK CAPITAL TRUST I
and
LEHMAN BROTHERS INC.
as Initial Purchaser
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Definitions................................................................................... 1
2. Registration Under the Securities Act......................................................... 5
(a) Exchange Offer....................................................................... 5
(b) Shelf Registration................................................................... 8
(c) Expenses............................................................................. 9
(d) Effective Registration Statement..................................................... 9
(e) Additional Interest.................................................................. 9
(f) Specific Enforcement................................................................. 10
3. Registration Procedures....................................................................... 11
4. Indemnification and Contribution.............................................................. 18
5. Participation in Underwritten Registrations................................................... 21
6. Selection of Underwriters..................................................................... 21
7. Miscellaneous................................................................................. 21
(a) Rule 144 and Rule 144A............................................................... 21
(b) No Inconsistent Agreements........................................................... 22
(c) Amendments and Waivers............................................................... 22
(d) Notices.............................................................................. 22
(e) Successors and Assigns............................................................... 23
(f) Third Party Beneficiary.............................................................. 23
(g) Counterparts......................................................................... 23
(h) Headings............................................................................. 23
(i) GOVERNING LAW........................................................................ 23
(j) Severability......................................................................... 23
(k) Securities Held by the Company, the Trust or its Affiliates.......................... 23
</TABLE>
i
<PAGE> 3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of January 31, 1997 among TRENWICK GROUP INC., a Delaware
corporation (the "Company"), TRENWICK CAPITAL TRUST I, a business trust formed
under the laws of the state of Delaware (the "Trust"), and LEHMAN BROTHERS INC.
("Lehman Brothers" or the "Initial Purchaser").
This Agreement is made pursuant to the Purchase Agreement,
dated January 28, 1997 (the "Purchase Agreement"), among the Company, as issuer
of the 8.82% Junior Subordinated Deferrable Interest Debentures due February 1,
2037 (the "Subordinated Debentures"), the Trust and the Initial Purchaser, which
provides for, among other things, the sale by the Trust to the Initial Purchaser
of 110,000 of the Trust's 8.82% Subordinated Capital Income Securities,
liquidation amount $1,000 per Capital Security (the "Capital Securities"), the
proceeds of which will be used by the Trust to purchase Subordinated Debentures.
The Capital Securities, together with the Subordinated Debentures and the
Company's guarantee of the Capital Securities (the "Capital Securities
Guarantee"), are collectively referred to as the "Securities". In order to
induce the Initial Purchaser to enter into the Purchase Agreement, the Company
and the Trust have agreed to provide to the Initial Purchaser and its direct and
indirect transferees the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the closing under the
Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Additional Interest" shall mean the additional amounts which
shall become payable in respect of the Subordinated Debentures if the Company or
the Trust fails to comply with the Agreement or if the Exchange Offer
Registration Statement or the Shelf Registration Statement fails to become
effective.
"Advice" shall have the meaning set forth in the last
paragraph of Section 3 hereof.
"Applicable Period" shall have the meaning set forth in
Section 3(t) hereof.
"Business Day" shall mean a day that is not a Saturday, a
Sunday, or a day on which banking institutions in New York, New York are
authorized or required to be closed.
"Closing Date" shall mean the Closing Date as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble to
this Agreement and also includes the Company's successors and permitted assigns.
"Declaration" or "Declaration of Trust" shall mean the Amended
and Restated Declaration of Trust, dated as of January 31, 1997, by the trustees
named therein and the
<PAGE> 4
Company as sponsor, as the same may be modified, supplemented or amended from
time to time.
"Depositary" shall mean The Depository Trust Company, or any
other depositary appointed by the Trust; provided, however, that such depositary
must have an address in the Borough of Manhattan, in The City of New York.
"Effectiveness Period" shall have the meaning set forth in
Section 2(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
"Exchange Offer" shall mean the offer by the Company and the
Trust to the Holders to exchange all of the Registrable Securities (other than
Private Exchange Securities) for a like principal amount of Exchange Securities
pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under
the Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section
2(a) hereof.
"Exchange Securities" shall mean (i) with respect to the
Subordinated Debentures, the 8.82% Junior Subordinated Deferrable Interest
Debentures due February 1, 2037 which are to be offered in exchange for the
Subordinated Debentures (the "Exchange Debentures") and which will contain terms
identical to the Subordinated Debentures (except that they will not contain
terms with respect to the transfer restrictions under the Securities Act, will
not require transfers thereof to be in minimum blocks of $100,000 principal
amount and will not provide for any increase in the interest rate thereon), (ii)
with respect to the Capital Securities, the Trust's 8.82% Capital Securities,
liquidation amount $1,000 per Capital Security, which are to be offered in
exchange for the Capital Securities (the "Exchange Capital Securities") and
which will have terms identical to the Capital Securities (except they will not
contain terms with respect to transfer restrictions under the Securities Act,
will not require minimum transfers thereof to be in blocks of $100,000
liquidation amount and will not provide for any increase in the distribution
rate thereon) and (iii) with respect to the Capital Securities Guarantee, the
Company's guarantee (the "Exchange Capital Securities Guarantee") of the
Exchange Capital Securities which will have terms identical to the Capital
Securities Guarantee. Exchange Securities include, where applicable, the Private
Exchange Securities.
"Extension Period" shall have the meaning set forth in the
Indenture.
"Holder" shall mean the Initial Purchaser, for so long as it
owns any Registrable Securities, and each of its respective successors, assigns
and direct and indirect
2
<PAGE> 5
transferees who become registered owners of Registrable Securities under the
Indenture or Declaration of Trust.
"Indenture" shall mean the Indenture relating to the
Subordinated Debentures and the Exchange Debentures dated as of January 31, 1997
among the Company, as issuer, and The Chase Manhattan Bank, as trustee, as the
same may be modified, supplemented or amended from time to time in accordance
with the terms thereof.
"Initial Purchaser" shall have the meaning set forth in the
preamble to this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(n)
hereof.
"Issue Date" shall mean January 31, 1997.
"Majority Holders" shall mean the Holders of a majority of the
aggregate liquidation amount of outstanding Capital Securities.
"Offering Memorandum" means the Offering Memorandum dated
January 28, 1997 relating to the Securities.
"Participating Broker-Dealer" shall have the meaning set forth
in Section 3(t) hereof.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, limited liability Company, or a government
or agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section
2(a) hereof.
"Private Exchange Securities" shall have the meaning set forth
in Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by a Shelf Registration Statement, and by
all other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Records" shall have the meaning set forth in Section 3(n)
hereof.
"Registrable Securities" shall mean the Securities and, if
issued, the Private Exchange Securities; provided, however, that Securities or
Private Exchange Securities, as the case may be, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such Securities or
Private Exchange Securities for the exchange or resale thereof, as
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the case may be, shall have been declared effective under the Securities Act and
such Securities or Private Exchange Securities, as the case may be, shall have
been disposed of pursuant to such Registration Statement, (ii) such Securities
or Private Exchange Securities, as the case may be, may be sold to the public
pursuant to Rule 144(k) (or any similar provision then in force, but not Rule
144A) under the Securities Act, (iii) such Securities or Private Exchange
Securities, as the case may be, shall have ceased to be outstanding or (iv) with
respect to the Securities, such Securities have been exchanged for Exchange
Securities upon consummation of the Exchange Offer and are thereafter freely
transferrable by the holders thereof (other than an affiliate of the Company as
defined in Rule 405 under the Securities Act).
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Company with this Agreement,
including without limitation: (i) all SEC or National Association of Securities
Dealers, Inc. (the "NASD") registration and filing fees, including, if
applicable, the fees and expenses of any "qualified independent underwriter"
(and its counsel) that is required to be retained by any Holder of Registrable
Securities in accordance with the rules and regulations of the NASD, (ii) all
fees and expenses incurred in connection with compliance with state securities
or blue sky laws (including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities) and compliance with the rules of
the NASD, (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus and any amendments or supplements thereto, and in
preparing or assisting in preparing, printing and distributing any underwriting
agreements, securities sales agreements and other documents relating to the
performance of and compliance with this Agreement, (iv) all rating agency fees,
(v) the fees and disbursements of counsel for the Company and of the independent
auditors of the Company, including the expenses of any "cold comfort" letters
required by or incident to such performance and compliance, (vi) the fees and
expenses of the Trustee, and any exchange agent or custodian, (vii) all fees and
expenses incurred in connection with the listing, if any, of any of the
Registrable Securities on any securities exchange or exchanges, and (viii) the
reasonable fees and expenses of any special experts retained by the Company in
connection with any Registration Statement.
"Registration Statement" shall mean any registration statement
of the Company and the Trust which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Rule 144(k) Period" shall mean the period of three years (or
such shorter period as may hereafter be referred to in Rule 144(k) under the
Securities Act (or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble
to this Agreement.
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"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
"Shelf Registration" shall mean a registration effected
pursuant to Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set
forth in Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company and the Trust pursuant to the provisions
of Section 2(b) hereof which covers all of the Registrable Securities or all of
the Private Exchange Securities, as the case may be, on an appropriate form
under Rule 415 under the Securities Act, or any similar rule that may be adopted
by the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"TIA" shall have the meaning set forth in Section 3(1) hereof.
"Trustees" shall mean any and all trustees with respect to (i)
the Capital Securities under the Declaration, (ii) the Subordinated Debentures
under the Indenture and (iii) the Capital Securities Guarantee.
2. Registration Under the Securities Act.
(a) Exchange Offer. To the extent not prohibited by any
applicable law or applicable interpretation of the staff of the SEC, the Company
and the Trust shall, for the benefit of the Holders, at the Company's cost, use
its best efforts to (i) cause to be filed with the SEC within 150 days after the
date of the Offering Memorandum an Exchange Offer Registration Statement on an
appropriate form under the Securities Act covering the Exchange Offer, (ii)
cause such Exchange Offer Registration Statement to be declared effective under
the Securities Act by the SEC not later than the date which is 180 days after
the date of the Offering Memorandum, and (iii) keep such Exchange Offer
Registration Statement effective for not less than 30 calendar days (or longer
if required by applicable law) after the date notice of the Exchange Offer is
mailed to the Holders. Upon the effectiveness of the Exchange Offer Registration
Statement, the Company and the Trust shall promptly commence the Exchange Offer,
it being the objective of such Exchange Offer to enable each Holder eligible and
electing to exchange Registrable Securities for a like principal amount of
Exchange Debentures or a like liquidation amount of Exchange Capital Securities,
together with the Exchange Capital Securities Guarantee, as applicable (assuming
that such Holder (A) is not an affiliate of the Company within the meaning of
Rule 405 under the Securities Act and is not a broker-dealer tendering
Registrable Securities acquired directly from the Company for its own account,
(B) acquires the Exchange Securities in the ordinary course of such Holder's
business and (C) has no arrangements or understandings with any Person to
participate in the Exchange Offer for the purpose of distributing the Exchange
Securities), to transfer such Exchange Securities from
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<PAGE> 8
and after their receipt without any limitations or restrictions under the
Securities Act and under state securities or blue sky laws.
Notwithstanding the foregoing paragraph, the Company and the
Trust may, in lieu of filing an Exchange Offer Registration Statement and
consummating the Exchange Offer, file a Shelf Registration Statement in
accordance with Section 2(b) hereof, if the Company has received an opinion of
counsel, rendered by a law firm experienced in such matters, to the effect that,
as a result of the consummation of the Exchange Offer there is more than an
insubstantial risk that (x) the Trust would be subject to United States federal
income tax with respect to income received or accrued on the Junior Subordinated
Debentures or Exchanges Debentures, (y) interest payable by the Company on such
Junior Subordinated Debentures or Exchange Debentures would not be deductible by
the Company, in whole or in part, for United States federal income tax purposes,
or (z) the Trust would be subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
In connection with the Exchange Offer, the Company and the
Trust shall:
(i) mail to each Holder a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period
of not less than 30 days after the date notice thereof is mailed to the Holders
(or longer if required by applicable law) (such period referred to herein as the
"Exchange Period");
(iii) utilize the services of the Depositary for the Exchange
Offer:
(iv) permit Holders to withdraw tendered Securities at any
time prior to the close of business, New York time, on the last Business Day of
the Exchange Period, by sending to the institution specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Securities delivered for exchange, and a
statement that such Holder is withdrawing his election to have such Securities
exchanged;
(v) notify each Holder that any Security not tendered by such
Holder in the Exchange Offer will remain outstanding and continue to accrue
interest or accumulate distributions, as the case may be, but will not retain
any rights under this Agreement (except in the case of the Initial Purchaser and
Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
If the Initial Purchaser determines upon advice of its outside
counsel that it is not eligible to participate in the Exchange Offer with
respect to the exchange of Securities constituting any portion of an unsold
allotment in the initial distribution, as soon as practicable upon receipt by
the Company and the Trust of a written request from such Initial Purchaser, the
Company and the Trust, as applicable, shall issue and deliver to such Initial
Purchaser in exchange (the "Private Exchange") for the Securities held by such
Initial Purchaser, a like liquidation amount of Capital Securities of the Trust,
together with the Exchange Capital
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<PAGE> 9
Securities Guarantee, or a like principal amount of the Subordinated Debentures
of the Company, as applicable, that are identical (except that such securities
may bear a customary legend with respect to restrictions on transfer pursuant to
the Securities Act) to the Exchange Securities (the "Private Exchange
Securities") and which are issued pursuant to the Indenture or the Declaration
or the agreement pursuant to which the Exchange Capital Securities Guarantee is
issued (which provides that the Exchange Securities, the Private Exchange
Securities and the Securities will vote and consent together on all matters as
one class and that neither the Exchange Securities, the Private Exchange
Securities nor the Securities will have the right to vote or consent as a
separate series or class on any matter). The Private Exchange Securities shall
be of the same series as the Exchange Securities and the Company and the Trust
will seek to cause the CUSIP Service Bureau to issue the same CUSIP Numbers for
the Private Exchange Securities as for the Exchange Securities issued pursuant
to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer
and, if applicable, the Private Exchange, the Company and the Trust, as the case
requires, shall:
(i) accept for exchange all Securities or portions thereof
validly tendered and not validly withdrawn pursuant to the Exchange Offer or the
Private Exchange;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Securities or portions thereof so accepted for exchange by the
Company; and
(iii) issue, and cause the Trustee under the Indenture, the
Declaration or the Capital Securities Guarantee, as applicable, promptly to
authenticate and deliver to each Holder, new Exchange Securities or Private
Exchange Securities, as applicable, equal in principal amount to the principal
amount of the Subordinated Debentures or equal in liquidation amount to the
liquidation amount of the Capital Securities (together with the guarantee
thereof) as are surrendered by such Holder.
Distributions on each Exchange Capital Security and interest
on each Exchange Debenture and Private Exchange Security issued pursuant to the
Exchange Offer and in the Private Exchange will accrue from the last date on
which a distribution or interest was paid on the Capital Security or the
Subordinated Debenture surrendered in exchange therefor or, if no distribution
or interest has been paid on such Capital Security or Subordinated Debenture,
from the Issue Date. To the extent not prohibited by any law or applicable
interpretation of the staff of the SEC, the Company and the Trust shall use
their best efforts to complete the Exchange Offer as provided above, and shall
comply with the applicable requirements of the Securities Act, the Exchange Act
and other applicable laws in connection with the Exchange Offer. The Exchange
Offer shall not be subject to any conditions, other than that the Exchange Offer
does not violate applicable law or any applicable interpretation of the staff of
the SEC. Each Holder of Registrable Securities who wishes to exchange such
Registrable Securities for Exchange Securities in the Exchange Offer will be
required to make certain customary representations in connection therewith,
including, in the case of any Holder of Capital Securities, representations that
(i) it is not an affiliate of the Trust or the Company, (ii) the Exchange
Securities to be received by it were acquired in the ordinary course of its
business and (iii) at the time of the Exchange Offer, it has no arrangement with
any Person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Capital Securities. The Company and the Trust
shall inform the Initial Purchaser, after
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<PAGE> 10
consultation with the Trustee, of the names and addresses of the Holders to whom
the Exchange Offer is made, and the Initial Purchaser shall have the right to
contact such Holders and otherwise facilitate the tender of Registrable
Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with
this Section 2(a), the provisions of this Agreement shall continue to apply
solely with respect to Registrable Securities that are Private Exchange
Securities and Exchange Securities held by Participating Broker-Dealers, and the
Company and the Trust shall have no further obligation to register the
Registrable Securities (other than Private Exchange Securities) pursuant to
Section 2(b) of this Agreement.
(b) Shelf Registration. In the event that (i) the Company, the
Trust or the Majority Holders reasonably determine, after conferring with
counsel (which may be in-house counsel), that the Exchange Offer Registration
provided in Section 2(a) above is not available because of any change in law or
in currently prevailing interpretations of the staff of the SEC, (ii) the
Company has received an opinion of counsel, rendered by a law firm experienced
in such matters, to the effect that, as a result of the consummation of the
Exchange Offer there is more than an insubstantial risk that (x) the Trust would
be subject to United States federal income tax with respect to income received
or accrued on the Junior Subordinated Debentures or Exchanges Debentures, (y)
interest payable by the Company on such Junior Subordinated Debentures or
Exchange Debentures would not be deductible by the Company, in whole or in part,
for United States federal income tax purposes, or (z) the Trust would be subject
to more than a de minimis amount of other taxes, duties or other governmental
charges, and the Company determines not to effect the Exchange Offer, (iii) the
Exchange Offer Registration Statement is not declared effective within 180 days
of the date of the Offering Memorandum or (iv) upon the request of the Initial
Purchaser with respect to any Registrable Securities held by it, if such Initial
Purchaser is not permitted, in the reasonable opinion of Dewey Ballantine,
pursuant to applicable law or applicable interpretations of the staff of the
SEC, to participate in the Exchange Offer and thereby receive securities that
are freely tradeable without restriction under the Securities Act and applicable
blue sky or state securities laws (any of the events specified in (i)-(iv) being
a "Shelf Registration Event" and the date of occurrence thereof, the "Shelf
Registration Event Date"), the Company and the Trust shall, at their cost, use
their best efforts to cause to be filed as promptly as practicable after such
Shelf Registration Event Date, as the case may be, and, in any event, within 45
days after such Shelf Registration Event Date (which shall be not be required to
be earlier than 150 days after the Issue Date), a Shelf Registration Statement
providing for the sale by the Holders of all of the Registrable Securities, and
shall use its best efforts to have such Shelf Registration Statement declared
effective by the SEC as soon as practicable. No Holder of Registrable Securities
shall be entitled to include any of its Registrable Securities in any Shelf
Registration pursuant to this Agreement unless and until such Holder agrees in
writing to be bound by all of the provisions of this Agreement applicable to
such Holder and furnishes to the Company and the Trust in writing, within 15
days after receipt of a request therefor, such information as the Company and
the Trust may, after conferring with counsel with regard to information relating
to Holders that would be required by the SEC to be included in such Shelf
Registration Statement or Prospectus included therein, reasonably request for
inclusion in any Shelf Registration Statement or Prospectus included therein.
Each Holder as to which any Shelf Registration is being effected agrees to
furnish to the Company and the Trust all information with respect to such Holder
necessary to make the information previously furnished to the Company by such
Holder not materially misleading.
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The Company and the Trust agree to use their best efforts to
keep the Shelf Registration Statement continuously effective for the Rule 144(k)
Period (subject to extension pursuant to the last paragraph of Section 3 hereof)
or for such shorter period which will terminate when all of the Registrable
Securities covered by the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement or cease to be outstanding or, if the Shelf
Registration Statement is filed solely as a result of a request made in
accordance with clause (iv) of the preceding paragraph, if the Company shall
have furnished to the Initial Purchaser an opinion of counsel reasonably
acceptable to the Initial Purchaser to the effect that registration is no longer
necessary for resale by the Initial Purchaser (the "Effectiveness Period"). The
Company and the Trust shall not permit any securities other than Registrable
Securities to be included in the Shelf Registration. The Company and the Trust
will, in the event a Shelf Registration Statement is declared effective, provide
to each Holder participating in the Shelf Registration Statement a reasonable
number of copies of the Prospectus which is a part of the Shelf Registration
Statement, notify each such Holder when the Shelf Registration has become
effective and use its best efforts to take certain other actions as are required
to permit certain unrestricted resales of the Registrable Securities. The
Company and the Trust further agree, if necessary, to supplement or amend the
Shelf Registration Statement, if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the Securities Act or by any other rules and
regulations thereunder for shelf registrations, and the Company and the Trust
agree to furnish to the Holders of Registrable Securities copies of any such
supplement or amendment promptly after its being used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration Expenses
in connection with the registration pursuant to Section 2(a) or 2(b) hereof and
will reimburse the Initial Purchaser for the reasonable fees and disbursements
of Dewey Ballantine, counsel for the Initial Purchaser, incurred in connection
with the Exchange Offer and, if applicable, the Private Exchange, and either
Dewey Ballantine or any one other counsel designated in writing by the Majority
Holders to act as counsel for the Holders of the Registrable Securities in
connection with a Shelf Registration Statement, which other counsel shall be
reasonably satisfactory to the Company. Except as provided herein, each Holder
shall pay all expenses of its counsel, underwriting discounts and commissions
and transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration
Statement pursuant to Section 2(b) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC; provided, however,
that if, after it has been declared effective, the offering of Registrable
Securities pursuant to a Shelf Registration Statement is interfered with by any
stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be deemed not to
have been effective during the period of such interference, until the offering
of Registrable Securities pursuant to such Registration Statement may legally
resume. The Company and the Trust will be deemed not to have used their best
efforts to cause the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, to become, or to remain, effective
during the requisite period if either of them voluntarily takes any action that
would result in any such Registration Statement not being declared effective or
in the Holders of Registrable Securities
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<PAGE> 12
covered thereby not being able to exchange or offer and sell such Registrable
Securities during that period unless such action is required by applicable law.
(e) Additional Interest. In the event that (i)(A) neither the
Exchange Offer Registration Statement nor a Shelf Registration Statement is
filed with the SEC on or prior to the 150th day after the date of the Offering
Memorandum or (B) notwithstanding that the Company and the Trust have
consummated or will consummate an Exchange Offer, the Company and the Trust are
required to file a Shelf Registration Statement and such Shelf Registration
Statement is not filed on or prior to the date required by Section 2(b) hereof,
then commencing on the day after either such required filing date, Additional
Interest shall accrue on the principal amount of the Subordinated Debentures
affected thereby, and additional distributions shall accumulate on the
liquidation amount of the Capital Securities affected thereby, each at a rate of
0.25% per annum; or
(ii) (A) neither the Exchange Offer Registration
Statement nor a Shelf Registration Statement is declared effective by the SEC on
or prior to the 180th day after the date of the Offering Memorandum or (B)
notwithstanding that the Company and the Trust have consummated or will
consummate an Exchange Offer, the Company and the Trust are required to file a
Shelf Registration Statement and such Shelf Registration Statement is not
declared effective by the SEC on or prior to the 180th day after the date of the
Offering Memorandum then, commencing on the 181st day after the date of the
Offering Memorandum, Additional Interest shall accrue on the principal amount of
the Subordinated Debentures affected thereby, and additional distributions shall
accumulate on the liquidation amount of the Capital Securities affected thereby,
each at a rate of 0.25% per annum; or
(iii) (A) the Trust has not exchanged Exchange
Capital Securities for all Capital Securities validly tendered, or the Company
has not exchanged the Exchange Capital Securities Guarantee for the Capital
Securities Guarantee or exchanged all the Exchange Subordinated Debentures for
Subordinated Debentures validly tendered, in accordance with the terms of the
Exchange Offer on or prior to the 30th day after the date on which the Exchange
Offer Registration Statement was declared effective or (B) if applicable, the
Shelf Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective at any time prior to the
expiration of the Rule 144(k) Period (other than after such time as all Capital
Securities have been disposed of thereunder or otherwise cease to be Registrable
Securities), then Additional Interest shall accrue on the principal amount of
Subordinated Debentures affected thereby, and additional distributions shall
accumulate on the liquidation amount of the Capital Securities affected thereby,
each at a rate of 0.25% per annum commencing on (x) the 31st day after such
effective date, in the case of (A) above, or (y) the day such Shelf Registration
Statement ceases to be effective in the case of (B) above;
provided, however, that neither the Additional Interest rate on the Subordinated
Debentures, nor the additional distribution rate on the liquidation amount of
the Capital Securities, may exceed in the aggregate 0.25% per annum; provided,
further, however, that (1) upon the filing of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (i) above),
(2) upon the effectiveness of the Exchange Offer Registration Statement or a
Shelf Registration Statement (in the case of clause (ii) above), or (3) upon the
exchange of Exchange Capital Securities, the Exchange Capital Securities
Guarantee and Exchange Subordinated Debentures for all Capital Securities, the
Capital Securities Guarantee and all Subordinated Debentures validly tendered
(in the case of clause (iii)(A) above), or upon the
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effectiveness of the Shelf Registration Statement which had ceased to remain
effective (in the case of clause (iii)(B) above), Additional Interest on the
Subordinated Debentures, and additional distributions on the liquidation amount
of the Capital Securities as a result of such clause (or the relevant subclause
thereof), as the case may be, shall cease to accrue or accumulate, as the case
may be.
Any amounts of Additional Interest and additional
distributions due pursuant to Section 2(e)(i), (ii) or (iii) above will be
payable in cash on the relevant record dates for the payment of interest and
Distributions pursuant to the Indenture and the Declaration respectively;
provided, however, that the payment of such amounts may be deferred during any
Extension Period.
(f) Specific Enforcement. Without limiting the remedies
available to the Holders, the Company and the Trust acknowledge that any failure
by the Company or the Trust to comply with its obligations under Section 2(a)
and Section 2(b) hereof may result in material irreparable injury to the Holders
for which there is no adequate remedy at law, that it would not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, any Holder may obtain such relief as may be required to specifically
enforce the Company's and the Trust's obligations under Section 2(a) and Section
2(b) hereof.
3. Registration Procedures. In connection with the obligations
of the Company and the Trust with respect to the Registration Statements
pursuant to Sections 2(a) and 2(b) hereof, the Company and the Trust shall use
their best efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form (i) shall be
selected by the Company and the Trust, (ii) shall, in the case of a
Shelf Registration, be available for the sale of the Registrable
Securities by the selling Holders thereof and (iii) shall comply as to
form in all material respects with the requirements of the applicable
form and include all financial statements required by the SEC to be
filed therewith; and use its best efforts to cause such Registration
Statement to become effective and remain effective in accordance with
Section 2 hereof; provided, however, that if (1) such filing is
pursuant to Section 2(b), or (2) a Prospectus contained in an Exchange
Offer Registration Statement filed pursuant to Section 2(a) is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Securities, then before filing
any Registration Statement or Prospectus or any amendments or
supplements thereto, the Company and the Trust shall furnish to and
afford the Holders of the Registrable Securities and each such
Participating Broker-Dealer, as the case may be, covered by such
Registration Statement, their counsel and the managing underwriters, if
any, a reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed. The Company and
the Trust shall not file any Registration Statement or Prospectus or
any amendments or supplements thereto in respect of which the Holders
must be afforded an opportunity to review prior to the filing of such
document if the Majority Holders or such Participating Broker-Dealer,
as the case may be, their counsel or the managing underwriters, if any,
shall reasonably object;
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(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
Effectiveness Period or the Applicable Period, as the case may be; and
cause each Prospectus to be supplemented, if so determined by the
Company or the Trust or requested by the SEC, by any required
prospectus supplement and as so supplemented to be filed pursuant to
Rule 424 (or any similar provision then in force) under the Securities
Act, and comply with the provisions of the Securities Act, the Exchange
Act and the rules and regulations promulgated thereunder applicable to
it with respect to the disposition of all securities covered by each
Registration Statement during the Effectiveness Period or the
Applicable Period, as the case may be, in accordance with the intended
method or methods of distribution by the selling Holders thereof
described in this Agreement (including sales by any Participating
Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities included in the Shelf Registration
Statement, at least three Business Days prior to filing, that a Shelf
Registration Statement with respect to the Registrable Securities is
being filed and advising such Holder that the distribution of
Registrable Securities will be made in accordance with the method
selected by the Majority Holders; and (ii) furnish to each Holder of
Registrable Securities included in the Shelf Registration Statement and
to each underwriter of an underwritten offering of Registrable
Securities, if any, without charge, as many copies of each Prospectus,
including each preliminary Prospectus, and any amendment or supplement
thereto and such other documents as such Holder or underwriter may
reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) consent to the use
of the Prospectus or any amendment or supplement thereto by each of the
selling Holders of Registrable Securities included in the Shelf
Registration Statement in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;
(d) in the case of a Shelf Registration, use its best efforts
to register or qualify the Registrable Securities under all applicable
state securities or "blue sky" laws of such jurisdictions by the time
the applicable Registration Statement is declared effective by the SEC
as any Holder of Registrable Securities covered by a Registration
Statement and each underwriter of an underwritten offering of
Registrable Securities shall reasonably request in writing sufficiently
in advance of such date of effectiveness, and do any and all other acts
and things which may be reasonably necessary or advisable to enable
such Holder and underwriter to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder;
provided, however, that the Company and the Trust shall not be required
to (i) qualify as a foreign corporation or as a dealer in securities in
any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d), (ii) file any general consent to service of
process in any jurisdiction where it would not otherwise be subject to
such service of process or (iii) subject itself to taxation in any such
jurisdiction if it is not then so subject;
(e) in the case of (1) a Shelf Registration or (2)
Participating Broker-Dealers from whom the Company or the Trust has
received prior written notice that they will be utilizing the
Prospectus contained in the Exchange Offer Registration
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Statement as provided in Section 3(t) hereof and who are seeking to
sell Exchange Securities and are required to deliver Prospectuses,
notify each Holder of Registrable Securities, or such Participating
Broker-Dealers, as the case may be, their counsel and the managing
underwriters, if any, promptly and promptly confirm such notice in
writing (i) when a Registration Statement has become effective and when
any post-effective amendments and supplements thereto become effective,
(ii) of any request by the SEC or any state securities authority for
amendments and supplements to a Registration Statement or Prospectus or
for additional information after the Registration Statement has become
effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a
Registration Statement or the qualification of the Registrable
Securities or the Exchange Securities to be offered or sold by any
Participating Broker-Dealer in any jurisdiction described in paragraph
3(d) hereof or the initiation of any proceedings for that purpose, (iv)
in the case of a Shelf Registration, if, between the effective date of
a Registration Statement and the closing of any sale of Registrable
Securities covered thereby, the representations and warranties of the
Company and the Trust contained in any purchase agreement, securities
sales agreement or other similar agreement, if any, cease to be true
and correct in all material respects, (v) of the happening of any event
or the failure of any event to occur or the discovery of any facts,
during the Effectiveness Period, which makes any statement made in such
Registration Statement or the related Prospectus untrue in any material
respect or which causes such Registration Statement or Prospectus to
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, and (vi) of the Company and the Trust's reasonable
determination that a post-effective amendment to the Registration
Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at
the earliest possible moment;
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities included within the coverage of such
Shelf Registration Statement, without charge, at least one conformed
copy of each Registration Statement relating to such Shelf Registration
and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless
requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends and in
such denominations (consistent with the provisions of the Indenture and
the Declaration) and registered in such names as the selling Holders or
the underwriters may reasonably request at least two Business Days
prior to the closing of any sale of Registrable Securities pursuant to
such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its best
efforts to prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as
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<PAGE> 16
thereafter delivered to the purchasers of the Registrable Securities,
such Prospectus will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not materially misleading; and to notify each Holder to suspend use of
the Prospectus as promptly as practicable after the occurrence of such
an event, and each Holder hereby agrees to suspend use of the
Prospectus until the Company has amended or supplemented the Prospectus
to correct such misstatement or omission;
(j) in the case of a Shelf Registration, a reasonable time
prior to the filing of any document which is to be incorporated by
reference into a Registration Statement or a Prospectus after the
initial filing of a Registration Statement, provide a reasonable number
of copies of such document to the Holders; and make such of the
representatives of the Company and the Trust as shall be reasonably
requested by the Holders of Registrable Securities or the Initial
Purchaser on behalf of such Holders available for discussion of such
document;
(k) obtain a CUSIP number for all Exchange Capital Securities
and the Capital Securities (and if the Trust has made a distribution of
the Subordinated Debentures to the Holders of the Capital Securities,
the Subordinated Debentures or the Exchange Subordinated Debentures) as
the case may be, not later than the effective date of a Registration
Statement, and provide the Trustee with printed certificates for the
Exchange Securities or the Registrable Securities, as the case may be,
in a form eligible for deposit with the Depositary;
(l) cause the Indenture, the Declaration, the Capital
Securities Guarantee and the Exchange Capital Securities Guarantee to
be qualified under the Trust Indenture Act of 1939 (the "TIA") in
connection with the registration of the Exchange Securities or
Registrable Securities, as the case may be, and effect such changes to
such documents as may be required for them to be so qualified in
accordance with the terms of the TIA and execute, and use its best
efforts to cause the relevant trustee to execute, all documents as may
be required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable such documents to be so
qualified in a timely manner;
(m) in the case of a Shelf Registration, if requested by (x)
the Initial Purchaser, in the case where the Initial Purchaser holds
Securities acquired by it as part of its initial distribution or (y)
Majority Holders of Securities covered thereby, (i) enter into such
agreements (including underwriting agreements) as are customary in
underwritten offerings and take all such other appropriate actions as
are reasonably requested in order to expedite or facilitate the
registration or the disposition of such Registrable Securities; (ii)
make such representations and warranties to Holders of such Registrable
Securities and the underwriters (if any), with respect to the business
of the Trust, the Company and its subsidiaries as then conducted and
the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each
case, as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when requested;
(iii) in the case of an underwritten offering in connection with the
Shelf Registration, obtain opinions of counsel to the Company and the
Trust and updates thereof (which may be in the form of a reliance
letter) in form and substance reasonably satisfactory to
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<PAGE> 17
the managing underwriters and the Majority Holders of Securities being
sold, addressed to each selling Holder and the underwriters covering
the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such
underwriters (it being agreed that the matters to be covered by such
opinion may be subject to customary qualifications and exceptions);
(iv) in the case of an underwritten offering in connection with the
Shelf Registration Statement, obtain "cold comfort" letters and updates
thereof in form and substance reasonably satisfactory to the managing
underwriters from the independent auditors of the Company and the Trust
(and, if necessary, any other independent auditors of any subsidiary of
the Company and the Trust or of any business acquired by the Company
and the Trust for which financial statements and financial data are, or
are required to be, included or incorporated by reference in the
Registration Statement), addressed to each of the underwriters, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as are reasonably
requested by such underwriters in accordance with Statement on Auditing
Standards No. 72; and (v) if an underwriting agreement is entered into,
the same shall contain indemnification provisions and procedures no
less favorable than those set forth in Section 4 hereof (or such other
provisions and procedures acceptable to the Company and Holders of a
majority in aggregate principal amount of Registrable Securities
covered by such Registration Statement and the managing underwriters or
agents) with respect to all parties to be indemnified pursuant to said
Section (including, without limitation, such underwriters and selling
Holders). The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to Section
2(b) or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2(a) is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Securities during the Applicable Period, make
reasonably available for inspection by any selling Holder of such
Registrable Securities being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any
such disposition of Registrable Securities, if any, and any attorney,
accountant or other agent retained by any such selling Holder or each
such Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept,
during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Trust, the Company
and its subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and
employees of the Trust, the Company and its subsidiaries to supply all
relevant information in each case reasonably requested by any such
Inspector in connection with such Registration Statement; provided,
however, that the foregoing inspection and information gathering shall
be conducted on behalf of the Initial Purchaser by itself and Dewey
Ballantine and on behalf of all other selling Holders by one counsel
selected in accordance with Section 2(c) hereof. Records which the
Company and the Trust determine, in good faith, to be confidential and
any records which it notifies the Inspectors are confidential shall not
be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a material misstatement or
omission in such Registration Statement, (ii) the release of such
Records is ordered pursuant to a subpoena or other order from a court
of
15
<PAGE> 18
competent jurisdiction or is necessary in connection with any action,
suit or proceeding or (iii) the information in such Records has been
made generally available to the public. Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will
be required to agree in writing that information obtained by it as a
result of such inspections shall be deemed confidential and shall not
be used by it as the basis for any market transactions in the
securities of the Trust or the Company unless and until such is made
generally available to the public by the Company. Each such Holder of
such Registrable Securities and each such Participating Broker-Dealer
will be required to agree in writing that it will, upon learning that
disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company at its
expense to undertake appropriate action to prevent disclosure of the
Records deemed confidential;
(o) as soon as practicable after the first day of the first
fiscal quarter of the Company beginning after the effective date of a
Registration Statement, but in any event not later than the earliest
required filing date by the Company of a Form 10-K after the end of the
12-month period beginning at the end of the fiscal quarter of the
Company during which the effective date of a Registration Statement
occurs, to make generally available to its securityholders earning
statements satisfying the provisions of Section 11(a) of the Securities
Act covering such 12-month period;
(p) upon consummation of an Exchange Offer or a Private
Exchange, if requested by a Trustee, obtain an opinion of counsel to
the Company addressed to the Trustee for the benefit of all Holders of
Registrable Securities participating in the Exchange Offer or the
Private Exchange, as the case may be, and which includes an opinion
that (i) the Company and the Trust, as the case requires, has duly
authorized, executed and delivered the Exchange Securities and Private
Exchange Securities, and (ii) each of the Exchange Securities or the
Private Exchange Securities, as the case may be, constitute a legal,
valid and binding obligation of the Company or the Trust, as the case
requires, enforceable against the Company or the Trust, as the case
requires, in accordance with its respective terms (in each case, with
customary exceptions);
(q) if an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Securities by Holders to
the Company or the Trust, as applicable (or to such other Person as may
be directed by the Company or the Trust), in exchange for the Exchange
Securities or the Private Exchange Securities, as the case may be, the
Company or the Trust, as applicable, shall mark, or cause to be marked,
on such Registrable Securities delivered by such Holders that such
Registrable Securities are being cancelled in exchange for the Exchange
Securities or the Private Exchange Securities, as the case may be;
(r) cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be
made with the NASD;
(s) use its best efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by a
Registration Statement contemplated hereby;
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<PAGE> 19
(t) (A) in the case of the Exchange Offer Registration
Statement (i) include in the Exchange Offer Registration Statement a
section entitled "Plan of Distribution," which section shall be
reasonably acceptable to the Initial Purchaser or another
representative of the Participating Broker-Dealers, and which shall
contain a summary statement of the positions taken or policies made by
the staff of the SEC with respect to the potential "underwriter" status
of any broker-dealer (a "Participating Broker-Dealer") that holds
Registrable Securities acquired for its own account as a result of
market-making activities or other trading activities and that will be
the beneficial owner (as defined in Rule 13d-3 under the Exchange Act)
of Exchange Securities to be received by such broker-dealer in the
Exchange Offer, whether such positions or policies have been publicly
disseminated by the staff of the SEC or such positions or policies, in
the reasonable judgment of the Initial Purchaser or such other
representative, represent the prevailing views of the staff of the SEC,
including a statement that any such broker-dealer who receives Exchange
Securities for Registrable Securities pursuant to the Exchange Offer
may be deemed a statutory underwriter and must deliver a prospectus
meeting the requirements of the Securities Act in connection with any
resale of such Exchange Securities, (ii) furnish to each Participating
Broker-Dealer who has delivered to the Company the notice referred to
in Section 3(e), without charge, as many copies of each Prospectus
included in the Exchange Offer Registration Statement, including any
preliminary prospectus, and any amendment or supplement thereto, as
such Participating Broker-Dealer may reasonably request (each of the
Company and the Trust hereby consents to the use of the Prospectus
forming part of the Exchange Offer Registration Statement or any
amendment or supplement thereto by any Person subject to the prospectus
delivery requirements of the Securities Act, including all
Participating Broker-Dealers, in connection with the sale or transfer
of the Exchange Securities covered by the Prospectus or any amendment
or supplement thereto), (iii) use its best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
Prospectus contained therein in order to permit such Prospectus to be
lawfully delivered by all Persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as such
Persons must comply with such requirements under the Securities Act and
applicable rules and regulations in order to resell the Exchange
Securities; provided, however, that such period shall not be required
to exceed 90 days (or such longer period if extended pursuant to the
last sentence of Section 3 hereof) (the "Applicable Period"), and (iv)
include in the transmittal letter or similar documentation to be
executed by an exchange offeree in order to participate in the Exchange
Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a
result of market-making activities or other trading
activities, it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any
resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus
in connection with the exchange of Registrable Securities, the
broker-dealer will not be deemed to admit that it is an underwriter
within the meaning of the Securities Act; and
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<PAGE> 20
(B) in the case of any Exchange Offer Registration
Statement, the Company and the Trust agree to deliver to the Initial
Purchaser or to another representative of the Participating
Broker-Dealers, if requested by such Initial Purchaser or such other
representative of the Participating Broker-Dealers, on behalf of the
Participating Broker-Dealers upon consummation of the Exchange Offer
(i) an opinion of counsel in form and substance reasonably satisfactory
to the Initial Purchaser or such other representative of the
Participating Broker-Dealers, covering the matters customarily covered
in opinions requested in connection with Exchange Offer Registration
Statements and such other matters as may be reasonably requested (it
being agreed that the matters to be covered by such opinion may be
subject to customary qualifications and exceptions), (ii) an officers'
certificate containing certifications substantially similar to those
set forth in Section 5(d) of the Purchase Agreement and such additional
certifications as are customarily delivered in a public offering of
debt securities and (iii) as well as upon the effectiveness of the
Exchange Offer Registration Statement, a comfort letter, in each case,
in customary form if permitted by Statement on Auditing Standards No.
72.
The Company or the Trust may require each seller of
Registrable Securities as to which any registration is being effected to furnish
to the Company or the Trust, as applicable, such information regarding such
seller as may be required by the staff of the SEC to be included in a
Registration Statement. The Company or the Trust may exclude from such
registration the Registrable Securities of any seller who unreasonably fails to
furnish such information within a reasonable time after receiving such request.
The Company shall have no obligation to register under the Securities Act the
Registrable Securities of a seller who so fails to furnish such information.
In the case of (1) a Shelf Registration Statement or (2)
Participating Broker-Dealers who have notified the Company and the Trust that
they will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(t) hereof and who are seeking to
sell Exchange Securities and are required to deliver Prospectuses, each Holder
agrees that, upon receipt of any notice from the Company or the Trust of the
happening of any event of the kind described in Section 3(e)(ii), 3(e)(iii),
3(e)(v) or 3(e)(vi) hereof, such Holder will forthwith discontinue disposition
of Registrable Securities pursuant to a Registration Statement until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(i) hereof or until it is advised in writing (the
"Advice") by the Company and the Trust that the use of the applicable Prospectus
may be resumed, and, if so directed by the Company and the Trust, such Holder
will deliver to the Company or the Trust (at the Company's or the Trust's
expense, as the case requires) all copies in such Holder's possession, other
than permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities or Exchange Securities, as the case may be,
current at the time of receipt of such notice. If the Company or the Trust shall
give any such notice to suspend the disposition of Registrable Securities or
Exchange Securities, as the case may be, pursuant to a Registration Statement,
the Company and the Trust shall use their best efforts to file and have declared
effective (if an amendment) as soon as practicable an amendment or supplement to
the Registration Statement and shall extend the period during which such
Registration Statement shall be maintained effective pursuant to this Agreement
by the number of days in the period from and including the date of the giving of
such notice to and including the date when the Company and the Trust shall have
18
<PAGE> 21
made available to the Holders (x) copies of the supplemented or amended
Prospectus necessary to resume such dispositions or (y) the Advice.
4. Indemnification and Contribution. (a) In connection with
any Registration Statement, the Company and the Trust shall, jointly and
severally, indemnify and hold harmless the Initial Purchaser, each Holder who
participates in an offering of Registrable Securities, each underwriter who
participates in an offering of the Registrable Securities, each Participating
Broker-Dealer, each Person, if any, who controls any of such parties within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
and each of their respective directors, officers, employees and agents, as
follows:
(i) from and against any and all loss, liability, claim, damage and
expense whatsoever, joint or several, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto), covering Registrable
Securities or Exchange Securities, including all documents incorporated therein
by reference, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue statement of
a material fact contained in any Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) from and against any and all loss, liability, claim, damage and
expense whatsoever, joint or several, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any investigation or
proceeding by any court or governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or omission
referred to in clause (i) above, or any such alleged untrue statement or
omission referred to in clause (i) above, if such settlement is effected with
the prior written consent of the Company; and
(iii) from and against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of counsel chosen by such Holder,
such Participating Broker-Dealer, or any underwriter (except to the extent
otherwise expressly provided in Section 4(c) hereof)), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any court or governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission referred to in clause (i) above, or any such alleged
untrue statement or omission referred to in clause (i) above, to the extent that
any such expense is not paid under subparagraph (i) or (ii) of this Section
4(a);
provided, however, that (i) this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished in writing to the
Company or the Trust by such Holder, such Participating Broker-Dealer or any
underwriter with respect to such Holder, Participating Broker-Dealer or any
underwriter, as the case may be, expressly for use in the Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) and (ii) the Company and the Trust shall not be liable to any such
Holder, Participating Broker-Dealer, any underwriter or controlling person, with
respect to any untrue statement or alleged untrue
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<PAGE> 22
statement or omission or alleged omission in any preliminary Prospectus to the
extent that any such loss, liability, claim, damage or expense of any Holder,
Participating Broker-Dealer, any underwriter or controlling person results from
the fact that such Holder, Participating Broker-Dealer, underwriter or
controlling person sold Securities to a Person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a copy of the final
Prospectus as then amended or supplemented if the Company had previously
furnished copies thereof to such Holder, Participating Broker-Dealer,
underwriter or controlling person and the loss, liability, claim, damage or
expense of such Holder, Participating Broker-Dealer, underwriter or controlling
person results from an untrue statement or omission of a material fact contained
in the preliminary Prospectus which was corrected in the final Prospectus. Any
amounts advanced by the Company or the Trust to an indemnified party pursuant to
this Section 4 as a result of such losses shall be returned to the Company or
the Trust if it shall be finally determined by such a court in a judgment not
subject to appeal or final review that such indemnified party was not entitled
to indemnification by the Company or the Trust.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Trust, any underwriter and the
other selling Holders and each of their respective directors, officers
(including each officer of the Company and the Trust who signed the Registration
Statement), employees, trustees and agents and each Person, if any, who controls
the Company, the Trust, any underwriter or any other selling Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all loss, liability, claim, damage and expense
whatsoever described in the indemnity contained in Section 4(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company or the Trust by such selling Holder with respect to such Holder
expressly for use in the Registration Statement (or any amendment thereto), or
any such Prospectus (or any amendment or supplement thereto); provided, however,
that, in the case of a Shelf Registration Statement, no such Holder shall be
liable for any claims hereunder in excess of the amount of net proceeds received
by such Holder from the sale of Registrable Securities pursuant to such Shelf
Registration Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action threatened or commenced against it in respect
of which any indemnity is sought hereunder, enclosing a copy of all papers
served on, and notices and demands delivered to, such indemnified party, if any,
but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability which it may have under this Section 4,
except to the extent that it is materially prejudiced by such failure. The
indemnifying party shall be entitled to assume the defense of any such action or
proceeding with counsel reasonably satisfactory to the indemnified party who
shall not, except with the consent of such indemnified party, be counsel to the
indemnifying party. Upon assumption by the indemnifying party of the defense of
any such action or proceeding, the indemnified party shall have the right to
participate in such action or proceeding and to retain its own counsel, but the
indemnifying party shall not be liable for any legal fees or expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnifying party has agreed to pay such fees and
expenses, (ii) the indemnifying party shall have failed to employ counsel
reasonably satisfactory to the indemnified party in a timely manner, or (iii)
the indemnified party shall have been advised by counsel (who shall not be
employed by such
20
<PAGE> 23
indemnified party and who shall be reasonably satisfactory to the indemnifying
party) that such representation would constitute an actual or potential conflict
of interests for counsel selected by the indemnifying party or that the
indemnified party shall have significant separate defenses available to it or
them. The indemnifying party shall not consent to the terms of any compromise or
settlement of any action defended by the indemnifying party in accordance with
the foregoing without the prior consent of the indemnified party, and the
indemnified party shall not consent to the terms of any compromise or settlement
of any action being defended by the indemnifying party in accordance with the
foregoing without the prior consent of the indemnifying party.
(d) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Trust and the
Holders shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement incurred by
the Company, the Trust and the Holders, as incurred; provided that no Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any Person that was not
guilty of such fraudulent misrepresentation. As between the Company, the Trust
and the Holders, such parties shall contribute to such aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement in such proportion as shall be appropriate to reflect the
relative fault of the Company and Trust, on the one hand, and the Holders, on
the other hand, with respect to the statements or omissions which resulted in
such loss, liability, claim, damage or expense, or action in respect thereof, as
well as any other relevant equitable considerations. The relative fault of the
Company and the Trust, on the one hand, and of the Holders, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Trust, on the one hand, or by or on behalf of the Holders, on the other, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Trust and the
Holders of the Registrable Securities agree that it would not be just and
equitable if contribution pursuant to this Section 4 were to be determined by
pro rata allocation or by any other method of allocation that does not take into
account the relevant equitable considerations. For purposes of this Section 4,
each affiliate of a Holder, and each director, officer, employee, agent and
Person, if any, who controls a Holder or such affiliate within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution from the Trust or the Company, as the case may
be, as such Holder, and each director of each of the Company and the Trust, each
officer of each of the Company and the Trust who signed the Registration
Statement, and each Person, if any, who controls each of the Company and the
Trust within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, shall have the same rights to contribution from the Holders as
each of the Company or the Trust.
5. Participation in Underwritten Registrations. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Securities on the basis provided in any
underwriting arrangements provided for herein and (b) completes and executes all
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents reasonably required under the
terms of such underwriting arrangements.
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<PAGE> 24
6. Selection of Underwriters. The Holders of Registrable
Securities covered by a Shelf Registration Statement who desire to do so may
sell the securities covered by such Shelf Registration in an underwritten
offering. In any such underwritten offering, the underwriter or underwriters and
manager or managers that will administer the offering will be selected by the
Holders of a majority in aggregate principal amount of the Registrable
Securities included in such offering; provided, however, that such underwriters
and managers must be satisfactory to the Company and the Trust and any fees of
such underwriters and managers must be paid by the Holders.
7. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the Company or the
Trust is subject to the reporting requirements of Section 13 or 15 of the
Exchange Act and any Registrable Securities remain outstanding, the Company and
the Trust, as the case may be, will each use its best efforts to file the
reports required to be filed by it under the Securities Act and Section 13(a) or
15(d) of the Exchange Act and the rules and regulations adopted by the SEC
thereunder, that if it ceases to be so required to file such reports, it will,
upon the request of any Holder of Registrable Securities (a) make publicly
available such information as is necessary to permit sales of their securities
pursuant to Rule 144 under the Securities Act, (b) deliver such information to a
prospective purchaser as is necessary to permit sales of their securities
pursuant to Rule 144A under the Securities Act and it will take such further
action as any Holder of Registrable Securities may reasonably request, and (c)
take such further action that is reasonable in the circumstances, in each case,
to the extent required from time to time to enable such Holder to sell its
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144 under the Securities Act,
as such rule may be amended from time to time, (ii) Rule 144A under the
Securities Act, as such rule may be amended from time to time, or (iii) any
similar rules or regulations hereafter adopted by the SEC. Upon the request of
any Holder of Registrable Securities, the Company and the Trust will deliver to
such Holder a written statement as to whether it has complied with such
requirements.
(b) No Inconsistent Agreements. The Company or the Trust has
not entered into nor will the Company or the Trust on or after the date of this
Agreement enter into any agreement which is inconsistent with the rights granted
to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not conflict with and are not inconsistent with the rights granted
to the holders of the Company's or the Trust's other issued and outstanding
securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company and the Trust have obtained the written
consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or departure; provided no amendment, modification,
supplement, waiver or consent to the departure with respect to the provisions of
Section 4 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder of Registrable
Securities. Notwithstanding the
22
<PAGE> 25
foregoing sentence, (i) this Agreement may be amended, without the consent of
any Holder of Registrable Securities, by written agreement signed by the
Company, the Trust and Lehman Brothers, to cure any ambiguity, correct or
supplement any provision of this Agreement that may be inconsistent with any
other provision of this Agreement or to make any other provisions with respect
to matters or questions arising under this Agreement which shall not be
inconsistent with other provisions of this Agreement, (ii) this Agreement may be
amended, modified or supplemented, and waivers and consents to departures from
the provisions hereof may be given, by written agreement signed by the Company,
the Trust and Lehman Brothers to the extent that any such amendment,
modification, supplement, waiver or consent is, in their reasonable judgment,
necessary or appropriate to comply with applicable law (including any
interpretation of the Staff of the SEC) or any change therein and (iii) to the
extent any provision of this Agreement relates to the Initial Purchaser, such
provision may be amended, modified or supplemented, and waivers or consents to
departures from such provisions may be given, by written agreement signed by
Lehman Brothers, the Company and the Trust.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company or the Trust by means of a notice given in accordance with the
provisions of this Section 7(d), which address initially is, with respect to the
Initial Purchaser, the address set forth in the Purchase Agreement; and (ii) if
to the Company or the Trust, initially at the Company's address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 7(d).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee, at
the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Initial Purchaser, including, without limitation and without the need for an
express assignment, subsequent Holders; provided, however, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement or
the Indenture. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiary. Each of the Holders shall be a
third party beneficiary of the agreements made hereunder between the Company and
the Trust, on the one
23
<PAGE> 26
hand, and the Initial Purchaser, on the other hand, and shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Securities Held by the Company, the Trust or its
Affiliates. Whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Company, the Trust or its affiliates (as such term is
defined in Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
24
<PAGE> 27
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
TRENWICK GROUP INC.
By: /s/ James F. Billett, Jr.
-----------------------------------
James F. Billett, Jr.
Chairman, President and Chief
Executive Officer
TRENWICK CAPITAL TRUST I
By: /s/ Alan L. Hunte
-----------------------------------
Alan L. Hunte
Vice President, Chief Financial
Officer and Treasurer
Confirmed and accepted as of
the date first above written:
LEHMAN BROTHERS INC.
By: /s/ James J. Stewart
-----------------------------------
James J. Stewart
Managing Director
<PAGE> 1
EXHIBIT 5.1
June 6, 1997
Trenwick Group Inc.
Metro Center
One Station Place
Stamford, Connecticut 06902
Re: Trenwick Group Inc.
Registration Statement on Form S-4
Filed With the Securities and Exchange
Commission on June 6, 1997
Ladies and Gentlemen:
We have acted as special counsel to Trenwick Group Inc., a Delaware
corporation (the "Company"), in connection with the registration by the Company
and Trenwick Capital Trust I, a statutory business trust formed under the laws
of the State of Delaware (the "Trust") of (i) one hundred ten thousand (110,000)
8.82% Exchange Subordinated Capital Income Securities (Liquidation Amount $1,000
per Capital Security) of the Trust (the "Capital Securities"), (ii) $110,000,000
in aggregate principal amount of 8.82% Exchange Junior Subordinated Deferrable
Interest Debentures due February 1, 2037 (the "Junior Subordinated Debentures")
to be issued under the Indenture dated as of January 31, 1997 (the "Indenture")
between the Company and The Chase Manhattan Bank, as trustee, and (iii) the
Exchange Capital Securities Guarantee Agreement to be entered into between the
Company as guarantor, and The Chase Manhattan Bank, as trustee (the "Capital
Securities Guarantee," together, with the Capital Securities and the Junior
Subordinated Debentures, the "Securities"), under the Registration Statement on
Form S-4, as filed with the Securities and Exchange Commission on the date
hereof (the "Registration Statement").
We are familiar with the proceedings of the Company relating to the
authorization of the Securities and the Indenture filed as an Exhibit to the
Registration Statement. In addition, we have made such further examinations of
law and fact as we have deemed appropriate in connection with the opinion
hereinafter set forth.
Based on the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that:
(i) The execution and delivery of the Capital Securities Guarantee
have been duly authorized by all necessary corporate action of the Company
and, when the Capital Securities Guarantee is authorized, executed and
delivered by all other parties thereto in accordance with the terms
thereof, will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general
equitable principles (regardless of whether considered in a proceeding in
equity or at law).
(ii) The execution and delivery of the Junior Subordinated Debentures
have been duly authorized by all necessary corporate action of the Company,
and the Junior Subordinated Debentures, when executed, authenticated and
delivered in accordance with the Indenture, will be entitled to the
benefits of the Indenture, and will constitute the valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
or other similar laws relating to or affecting creditors' rights generally
or by general equitable principles (regardless of whether considered in a
proceeding in equity or at law).
We express no opinion as to any laws other than the Federal laws of the
United States, the laws of the State of New York and the General Corporation Law
of the State of Delaware.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the references to our firm as set forth under the
caption "Legal Matters" in the Prospectus constituting part of the Registration
Statement. In giving such consent, we do not hereby admit that we are within the
category of persons whose consent is required by Section 7 of the Securities Act
of 1933, as amended, and the rules and regulations thereunder.
Very truly yours,
/s/ BAKER & MCKENZIE
<PAGE> 1
EXHIBIT 5.2
June 6, 1997
To Each of the Persons Listed
on Schedule I Attached Hereto
RE: TRENWICK CAPITAL TRUST I
8.82% Exchange Subordinated Capital Income Securities
Ladies and Gentlemen:
We have acted as special Delaware counsel for Trenwick Capital Trust
I, a Delaware business trust (the "Trust") in connection with the issuance of
its 8.82% Subordinated Income Capital Securities(TM) (SKIS(TM)) (the "Capital
Securities") and common securities (the "Common Securities") in connection with
the Amended and Restated Declaration of Trust (the "Declaration") entered into
as of January 31, 1997, by and among Trenwick Group Inc., as Sponsor, Chase
Manhattan Bank Delaware, as Delaware Trustee, The Chase Manhattan Bank, as
Property Trustee, and the Administrative Trustees named therein. Initially
capitalized terms used herein and not otherwise defined are used herein as
defined in the Declaration.
For purposes of giving the opinions hereinafter set forth, we have
examined only the following documents and have conducted no independent factual
investigations of our own:
1. The Certificate of Trust for the Trust, dated as of January 21,
1997 (the "Trust Certificate"), as filed in the Office of the Secretary of State
of the State of Delaware (the "Secretary of State") on January 21, 1997;
<PAGE> 2
2. The original declaration of trust of the Trust, dated as of
January 21, 1997, by and between Trenwick Group Inc., as Sponsor and Chase
Manhattan Bank Delaware, as Delaware Trustee (the "Original Declaration");
3. The Declaration;
4. A Certificate of Good Standing for the Trust, dated June 6,
1997, obtained from the Secretary of State; and
5. The form of Registration Statement on Form S-4 to be filed on the
date hereof (the "Registration Statement"), including a prospectus with respect
to the Trust (the "Prospectus"), relating to, among other things, an Exchange
Offer (the "Exchange Offer") involving the 8.82% Exchange Capital Securities of
the Trust representing preferred, undivided beneficial interests in the assets
of the Trust (each, an "Exchange Security" and collectively, the "Exchange
Securities" to be offered in exchange for the presently outstanding 8.82%
Subordinated Income Capital Securities(TM) (SKIS(TM)) of the Trust (the "Old
Securities"), filed by the Sponsor and the Trust with the Securities and
Exchange Commission.
As to certain facts material to the opinions expressed herein, we
have relied upon the representations and warranties contained in the documents
examined by us all of which we have assumed to be true, complete and accurate in
all material respects. The documents referred to in paragraphs 1, 2, 3 and 5
above are collectively referred to as the "Agreements."
Based upon the foregoing, and upon an examination of such questions
of law of the State of Delaware as we have considered necessary or appropriate,
and subject to the assumptions, qualifications, limitations and exceptions set
forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Business Trust Act.
2. The Exchange Securities will represent valid, and, subject to the
qualifications set forth in number 3 below,
<PAGE> 3
fully paid and non-assessable undivided beneficial interests in the assets of
the Trust.
3. The Holders of Exchange Securities, as beneficial owners of
Exchange Securities of the Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware, except
that the Holders of Exchange Securities may be obligated to (a) provide
indemnity and/or security in connection with and pay taxes or governmental
charges arising from transfers or exchanges of certificates representing
Exchange Securities and the issuance of replacement certificates representing
Exchange Securities, (b) provide security or indemnity in connection with
requests of or directions to the Property Trustee to exercise its rights and
powers under the Declaration, and (c) provide indemnity in connection with
violations of the Declaration or federal or state securities laws arising from
transfers or exchanges of certificates representing Exchange Securities and the
issuance of replacement certificates representing Exchange Securities.
All of the foregoing opinions contained herein are subject to the
following assumptions, qualifications, limitations and exceptions:
a. The foregoing opinions are limited to the laws of the State
of Delaware presently in effect, excluding the securities laws thereof. We have
not considered and express no opinion on the laws of any other jurisdiction,
including, without limitation, federal laws and rules and regulations relating
thereto.
b. We have assumed the due execution and delivery by each
party listed as a party to each document examined by us. We have assumed further
the due authorization by each party thereto (exclusive of the Trust) of each
document examined by us, and that each of such parties (exclusive of the Trust)
has the full corporate, or trust or banking, power, authority, and legal right
to execute, deliver and perform each such document. We also have assumed that
each of the parties to each of the Agreements (exclusive of the Trust and the
Administrative Trustees) is a corporation, bank, national banking association or
trust company, validly existing and in good standing under the laws of their
respective jurisdictions
<PAGE> 4
of organization and that the Agreements to which they are a party do not result
in the breach of the terms of, and do not contravene their respective
constituent documents, any contractual restriction binding on them or any law,
rule or regulation applicable to them. In addition, we have assumed the legal
capacity of any natural persons who are parties to any of the documents examined
by us.
c. We have assumed that all signatures on documents examined
by us are genuine, that all documents submitted to us as originals are authentic
and that all documents submitted to us as copies conform with the originals.
d. We have assumed that the Original Declaration and the
Declaration collectively, constitute the entire agreement among each of the
respective parties thereto with respect to the subject matter thereof, including
with respect to the creation, operation, dissolution and winding up of the Trust
and that the Declaration and the Certificate are in full force and effect.
e. We have assumed that no event set forth in Article 9 of the
Declaration has occurred.
f. We have assumed that the Exchange Securities will be issued
and exchanged in accordance with the Declaration and the Prospectus. We have
further assumed the receipt of each Person to whom a Exchange Security is to be
issued by the Trust of a Certificate for such Exchange Security and the exchange
by it of an equivalent liquidation amount of Old Securities in accordance with
the Declaration and the Prospectus.
g. We note that we have not participated in the preparation,
and do not assume responsibility for the contents, of the Registration Statement
or the Prospectus.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Validity of Exchange
Securities" in the Prospectus. In giving the foregoing consents, we do not
thereby admit that we come within the category of Persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and
<PAGE> 5
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Potter Anderson & Corroon
--------------------------------
259849
<PAGE> 6
SCHEDULE I
TRENWICK GROUP INC.
<PAGE> 1
EXHIBIT 8
June 6, 1997
Trenwick Group Inc.
Metro Center
One Station Place
Stamford, Connecticut 06902
Trenwick Capital Trust I
Metro Center
One Station Place
Stamford, Connecticut 06902
Re: Trenwick Group Inc.
Registration Statement on Form S-4
Filed with the Securities and Exchange
Commission on June 6, 1997
Dear Ladies and Gentlemen:
We have acted as special tax counsel to Trenwick Group Inc., a Delaware
corporation (the "Company"), and Trenwick Capital Trust I, a statutory business
trust formed under the laws of the State of Delaware (the "Trust"), in
connection with the transactions contemplated by the Purchase Agreement, dated
January 28, 1997 by and among Lehman Brothers Inc., the Company, and the Trust.
We also have acted as special tax counsel to the Company in connection with
the registration by the Company and the Trust under the Securities Act of 1933,
as amended (the "Securities Act"), of (i) one hundred ten thousand (110,000)
8.82% Exchange Subordinated Capital Income Securities (Liquidation Amount $1,000
per Exchange Capital Security) of the Trust, (ii) one hundred ten thousand
(110,000) 8.82% Exchange Junior Subordinated Deferrable Interest Debentures due
February 1, 2037, issued under the Indenture, dated as of January 31, 1997, as
amended and supplemented from time to time, between the Company and The Chase
Manhattan Bank, as trustee, and (iii) the Exchange Capital Securities Guarantee
Agreement to be entered into between the Company, as guarantor, and The Chase
Manhattan Bank, as trustee, under the Registration Statement on Form S-4, as
filed with the Securities and Exchange Commission on the date hereof (the
"Registration Statement").
In rendering the opinion set forth below, we have examined and are relying
upon, without independent investigation, the representations contained in an
Officer's Certificate, dated June 6, 1997.
Based upon the foregoing, we are of the opinion that the discussion set
forth in the Registration Statement under the caption "Certain Federal Income
Tax Consequences" is, in all material respects, a fair and accurate summary of
the United States federal income tax consequences of the purchase, ownership and
disposition of the Capital Securities under current law, subject to the
qualifications set forth in the Registration Statement to the effect that it
does not purport to discuss all possible United States federal income tax
consequences of the purchase, ownership and disposition of the Capital
Securities. We assume no obligation to update our opinion.
No other opinions are expressed as to any tax consequences under United
States federal, state or local or other law relating to, or affecting, the
Company, the Trust, any shareholder of the Company or any holder of Trust
Securities, as a result of the activities of the Company or the Trust.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the references to our firm as set forth under the
caption "Legal Matters" in the Prospectus constituting part of the Registration
Statement. In giving such consent, we do not hereby admit that we are within the
category of persons whose consent is required by Section 7 of the Securities Act
and the rules and regulations thereunder.
Very truly yours,
/s/ BAKER AND MCKENZIE
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The Company's ratios of earnings to fixed charges for the three months
ended March 31, 1997 and for the five years ended December 31, 1996 were as
follows:
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED
MARCH
31, YEARS ENDED DECEMBER 31,
------- -------------------------------------------------------
1997 1996 1995 1994 1993 1992
------- ------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net income..................... $ 8,764 $33,848 $29,841 $20,282 $23,739 $18,539
Extraordinary loss on debt, net
of tax....................... 1,037 -- -- -- -- --
Cumulative effect of change in
accounting for income
taxes........................ -- -- -- -- -- (1,697)
Income tax expense............. 3,080 9,980 8,572 2,753 4,220 2,622
------- ------- ------- ------- ------- -------
Pretax earnings................ $12,881 $43,828 $38,413 $23,035 $27,959 $19,464
------- ------- ------- ------- ------- -------
Fixed charges:
Interest on borrowed funds and
amortization of debt issuance
costs........................ 2,507 6,503 6,496 6,469 6,454 1,668
Portion of rental expense which
approximates the interest
factor....................... $ 83 $ 323 $ 309 $ 316 $ 251 $ 240
------- ------- ------- ------- ------- -------
Total fixed charges............ $ 2,590 $ 6,826 $ 6,805 $ 6,785 $ 6,705 $ 1,908
------- ------- ------- ------- ------- -------
Earnings (for ratio
calculation)................. $15,471 $50,654 $45,218 $29,820 $34,664 $21,372
======= ======= ======= ======= ======= =======
Ratio of earnings to fixed
charges...................... 6.0 7.4 6.6 4.4 5.2 11.2
======= ======= ======= ======= ======= =======
</TABLE>
For purposes of computing the consolidated ratio of earnings to fixed
charges, "earnings" represent net income before extraordinary item plus
applicable income taxes, cumulative effect of accounting change and fixed
charges. "Fixed charges" include gross interest expense (other than on deposits)
and the proportion deemed representative of the interest factor of rent expense.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of our report dated
January 27, 1997, which appears on page 43 of the 1996 Annual Report to
Stockholders of Trenwick Group Inc., which is incorporated by reference in its
Annual Report on Form 10-K for the year ended December 31, 1996. We also consent
to the incorporation by reference of our report on the Financial Statement
Schedules, which appears on page S-3 of such Annual Report on Form 10-K. We also
consent to the reference to us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
New York, New York
June 6, 1997
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Power of Attorney has been signed by the following persons in the
capacities and on the dates indicated. By so signing, each of the undersigned,
in his capacity as a director of Trenwick Group Inc. (the "Company"), does
hereby appoint James F. Billett, Jr. and Alan L. Hunte, and each of them
severally, his true and lawful attorneys or attorney to execute in his name,
place and stead, in his capacity as a director of the Company, the Registration
Statement on Form S-4 to be filed with the Securities and Exchange Commission
(the "Commission") registering $110,000,000 principal amount of 8.82% Exchange
Subordinated Capital Income Securities of Trenwick Capital Trust I (the
"Capital Securities"), the 8.82% Exchange Junior Subordinated Deferrable
Interest Debentures of the Company and the Exchange Guarantee of the Company
with respect to the Capital Securities, and any and all amendments to said
Registration Statement and all instruments necessary or incidental in
connection therewith, and to file the same with the Commission. Each of said
attorneys shall have full power and authority to do and perform in the name and
on behalf of each of the undersigned, in his capacity as a director of the
Company, every act whatsoever requisite or necessary to be done in the premises
as fully and to all intents and purposes as each of the undersigned might or
could do in person, hereby ratifying and approving the acts of said attorneys
and each of them.
Signature Title Date
/s/ W. Marston Becker Director May 22, 1997
-------------------
W. Marston Becker
/s/ Anthony S. Brown Director May 22, 1997
-------------------
Anthony S. Brown
/s/ Neil Dunn Director May 22, 1997
-------------------
Neil Dunn
/s/ P. Anthony Jacobs Director May 22, 1997
-------------------
P. Anthony Jacobs
<PAGE> 2
/s/ Herbert Palmberger Director May 22, 1997
--------------------
Herbert Palmberger
/s/ Joseph D. Sargent Director May 22, 1997
--------------------
Joseph D. Sargent
/s/ Frederick D. Watkins Director May 22, 1997
--------------------
Frederick D. Watkins
/s/ Stephen R. Wilcox Director May 22, 1997
--------------------
Stephen R. Wilcox
<PAGE> 1
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
TRENWICK GROUP INC.
(Exact name of obligor as specified in its charter)
DELAWARE 06-1152790
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
METRO CENTER
ONE STATION PLACE
STAMFORD, CONNECTICUT 06092
(Address of principal executive offices) (Zip Code)
8.82% JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURES DUE FEBRUARY 1, 2037
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New
York 12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now
in effect, including the Organization Certificate and the Certificates of
Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September
9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to
Commence Business (see Exhibit 2 to Form T-1 filed in connection with
Registration Statement No. 33-50010, which is incorporated by reference. On July
14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan
Bank (National Association), Chemical Bank, the surviving corporation, was
renamed The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers
being contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit
4 to Form T-1 filed in connection with Registration Statement No. 333-06249,
which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of
the Act (see Exhibit 6 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939
the Trustee, The Chase Manhattan Bank, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York and State of New York, on the 16TH day
of MAY, 1997.
THE CHASE MANHATTAN BANK
By /s/ R. Lorenzen
--------------------------
R. Lorenzen
Senior Trust Officer
- 3 -
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business
December 31, 1996, in accordance with
a call made by the Federal Reserve
Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .................................................. $ 11,509
Interest-bearing balances .......................................... 8,457
Securities: ...............................................................
Held to maturity securities................................................. 3,128
Available for sale securities............................................... 40,534
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold ................................................. 9,222
Securities purchased under agreements to resell .................... 422
Loans and lease financing receivables:
Loans and leases, net of unearned income............................ $133,935
Less: Allowance for loan and lease losses........................... 2,789
Less: Allocated transfer risk reserve .............................. 16
--------
Loans and leases, net of unearned income,
allowance, and reserve ............................................. 131,130
Trading Assets ............................................................. 49,876
Premises and fixed assets (including capitalized
leases)............................................................. 2,877
Other real estate owned .................................................... 290
Investments in unconsolidated subsidiaries and
associated companies................................................ 124
Customer's liability to this bank on acceptances
outstanding ........................................................ 2,313
Intangible assets .......................................................... 1,316
Other assets ............................................................... 11,231
--------
TOTAL ASSETS ............................................................... $272,429
========
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices ..................................................... $ 87,006
Noninterest-bearing ..................................................... $ 35,783
Interest-bearing ........................................................ 51,223
--------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ............................................................... 73,206
Noninterest-bearing ..................................................... $ 4,347
Interest-bearing ........................................................ 68,859
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased ................................................. 14,980
Securities sold under agreements to repurchase .......................... 10,125
Demand notes issued to the U.S. Treasury ........................................ 1,867
Trading liabilities ............................................................. 34,783
Other Borrowed money:
With a remaining maturity of one year or less ........................... 14,639
With a remaining maturity of more than one year ......................... 425
Mortgage indebtedness and obligations under capitalized
leases .................................................................. 40
Bank's liability on acceptances executed and outstanding 2,267
Subordinated notes and debentures ............................................... 5,471
Other liabilities ............................................................... 11,343
TOTAL LIABILITIES ............................................................... 256,152
--------
Limited-Life Preferred stock and related surplus................................. 550
EQUITY CAPITAL
Common stock .................................................................... 1,251
Surplus ......................................................................... 10,243
Undivided profits and capital reserves .......................................... 4,526
Net unrealized holding gains (Losses)
on available-for-sale securities ................................................ (309)
Cumulative foreign currency translation adjustments ............................. 16
TOTAL EQUITY CAPITAL ............................................................ 15,727
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL ................................................ $272,429
========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
- 5 -
<PAGE> 1
Exhibit 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
TRENWICK CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
DELAWARE 06-6442139
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
METRO CENTER
ONE STATION PLACE
STAMFORD, CONNECTICUT 06092
(Address of principal executive offices) (Zip Code)
CAPITAL SECURITIES
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
New York State Banking Department, State House, Albany, New
York 12110.
Board of Governors of the Federal Reserve System,
Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C.,
20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now
in effect, including the Organization Certificate and the Certificates of
Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September
9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to
Commence Business (see Exhibit 2 to Form T-1 filed in connection with
Registration Statement No. 33-50010, which is incorporated by reference. On July
14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan
Bank (National Association), Chemical Bank, the surviving corporation, was
renamed The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers
being contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit
4 to Form T-1 filed in connection with Registration Statement No. 333-06249,
which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of
the Act (see Exhibit 6 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939
the Trustee, The Chase Manhattan Bank, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York and State of New York, on the 16TH day
of MAY, 1997.
THE CHASE MANHATTAN BANK
By /s/ R. Lorenzen
-----------------------
R. Lorenzen
Senior Trust Officer
- 3 -
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business
December 31, 1996, in accordance with
a call made by the Federal Reserve
Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .................................................. $ 11,509
Interest-bearing balances .......................................... 8,457
Securities: ...............................................................
Held to maturity securities................................................. 3,128
Available for sale securities............................................... 40,534
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold ................................................. 9,222
Securities purchased under agreements to resell .................... 422
Loans and lease financing receivables:
Loans and leases, net of unearned income............................ $133,935
Less: Allowance for loan and lease losses........................... 2,789
Less: Allocated transfer risk reserve .............................. 16
--------
Loans and leases, net of unearned income,
allowance, and reserve ............................................. 131,130
Trading Assets ............................................................. 49,876
Premises and fixed assets (including capitalized
leases)............................................................. 2,877
Other real estate owned .................................................... 290
Investments in unconsolidated subsidiaries and
associated companies................................................ 124
Customer's liability to this bank on acceptances
outstanding ........................................................ 2,313
Intangible assets .......................................................... 1,316
Other assets ............................................................... 11,231
--------
TOTAL ASSETS ............................................................... $272,429
========
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices .................................................... $ 87,006
Noninterest-bearing .................................................... $ 35,783
Interest-bearing ....................................................... 51,223
--------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's .............................................................. 73,206
Noninterest-bearing .................................................... $ 4,347
Interest-bearing ....................................................... 68,859
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased ................................................ 14,980
Securities sold under agreements to repurchase ......................... 10,125
Demand notes issued to the U.S. Treasury ....................................... 1,867
Trading liabilities ............................................................ 34,783
Other Borrowed money:
With a remaining maturity of one year or less .......................... 14,639
With a remaining maturity of more than one year ........................ 425
Mortgage indebtedness and obligations under capitalized
leases ................................................................. 40
Bank's liability on acceptances executed and outstanding 2,267
Subordinated notes and debentures .............................................. 5,471
Other liabilities .............................................................. 11,343
TOTAL LIABILITIES .............................................................. 256,152
--------
Limited-Life Preferred stock and related surplus 550
EQUITY CAPITAL
Common stock ................................................................... 1,251
Surplus ........................................................................ 10,243
Undivided profits and capital reserves ......................................... 4,526
Net unrealized holding gains (Losses)
on available-for-sale securities ............................................... (309)
Cumulative foreign currency translation adjustments ............................ 16
TOTAL EQUITY CAPITAL ........................................................... 15,727
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL ............................................... $272,429
========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
- 5 -
<PAGE> 1
Exhibit 25.3
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
TRENWICK GROUP INC.
(Exact name of obligor as specified in its charter)
DELAWARE 06-1152790
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
METRO CENTER
ONE STATION PLACE
STAMFORD, CONNECTICUT 06092
(Address of principal executive offices) (Zip Code)
EXCHANGE CAPITAL SECURITIES GUARANTEE
TRENWICK CAPITAL TRUST I
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
New York State Banking Department, State House, Albany, New
York 12110.
Board of Governors of the Federal Reserve System,
Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C.,
20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now
in effect, including the Organization Certificate and the Certificates of
Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September
9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to
Commence Business (see Exhibit 2 to Form T-1 filed in connection with
Registration Statement No. 33-50010, which is incorporated by reference. On July
14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan
Bank (National Association), Chemical Bank, the surviving corporation, was
renamed The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers
being contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit
4 to Form T-1 filed in connection with Registration Statement No. 333-06249,
which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of
the Act (see Exhibit 6 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939
the Trustee, The Chase Manhattan Bank, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York and State of New York, on the 16TH day
of MAY, 1997.
THE CHASE MANHATTAN BANK
By /s/ R. Lorenzen
-----------------------
R. Lorenzen
Senior Trust Officer
- 3 -
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business
December 31, 1996, in accordance with
a call made by the Federal Reserve
Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................................. $ 11,509
Interest-bearing balances ......................................... 8,457
Securities: ..............................................................
Held to maturity securities................................................ 3,128
Available for sale securities.............................................. 40,534
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold ................................................ 9,222
Securities purchased under agreements to resell ................... 422
Loans and lease financing receivables:
Loans and leases, net of unearned income........................... $133,935
Less: Allowance for loan and lease losses.......................... 2,789
Less: Allocated transfer risk reserve ............................. 16
--------
Loans and leases, net of unearned income,
allowance, and reserve ............................................ 131,130
Trading Assets ............................................................ 49,876
Premises and fixed assets (including capitalized
leases)............................................................ 2,877
Other real estate owned ................................................... 290
Investments in unconsolidated subsidiaries and
associated companies............................................... 124
Customer's liability to this bank on acceptances
outstanding ....................................................... 2,313
Intangible assets ......................................................... 1,316
Other assets .............................................................. 11,231
------
TOTAL ASSETS .............................................................. $272,429
=========
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices .................................................. $ 87,006
Noninterest-bearing .................................................. $ 35,783
Interest-bearing ..................................................... 51,223
--------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ............................................................ 73,206
Noninterest-bearing .................................................. $ 4,347
Interest-bearing ..................................................... 68,859
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased .............................................. 14,980
Securities sold under agreements to repurchase ....................... 10,125
Demand notes issued to the U.S. Treasury ..................................... 1,867
Trading liabilities .......................................................... 34,783
Other Borrowed money:
With a remaining maturity of one year or less ........................ 14,639
With a remaining maturity of more than one year ...................... 425
Mortgage indebtedness and obligations under capitalized
leases ............................................................... 40
Bank's liability on acceptances executed and outstanding 2,267
Subordinated notes and debentures ............................................ 5,471
Other liabilities ............................................................ 11,343
TOTAL LIABILITIES ............................................................ 256,152
--------
Limited-Life Preferred stock and related surplus 550
EQUITY CAPITAL
Common stock ................................................................. 1,251
Surplus ...................................................................... 10,243
Undivided profits and capital reserves ....................................... 4,526
Net unrealized holding gains (Losses)
on available-for-sale securities ............................................. (309)
Cumulative foreign currency translation adjustments .......................... 16
TOTAL EQUITY CAPITAL ......................................................... 15,727
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL ............................................. $272,429
========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
- 5 -
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
TRENWICK CAPITAL TRUST I
Offer to Exchange its
8.82% Exchange Subordinated Capital Income Securities
(Liquidation Amount $1,000 per Capital Security)
which have been registered under the Securities Act of 1933, as amended
for any and all of its outstanding
8.82% Subordinated Capital Income Securities
(Liquidation Amount $1,000 per Capital Security)
Pursuant to the Prospectus
dated , 1997
------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON JULY , 1997, UNLESS THE OFFER IS EXTENDED.
------------------------
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE CHASE MANHATTAN BANK
By Registered or Certified Mail, Hand Or Overnight Delivery:
The Chase Manhattan Bank
55 Water Street, Room 234
North Building
New York, New York 10041
Attention: Sharon Lewis
Confirm by Telephone:
(212) 638-0454
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 638-7380
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMITTAL VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Old Capital
Securities (as defined below) either if Old Capital Securities are to be
forwarded herewith or if tenders of Old Capital Securities are to be made by
book-entry transfer to an account maintained by The Chase Manhattan Bank (the
"Exchange Agent") at The Depository Trust Company ("DTC") pursuant to the
procedures set forth in "The Exchange Offer -- Procedures for Tendering Old
Capital Securities" in the Prospectus and an Agent's Message (as defined herein)
is not delivered.
Holders of Old Capital Securities whose certificates (the "Certificates")
for such Old Capital Securities are not immediately available or who cannot
deliver their Certificates and all other required documents to the Exchange
Agent on or prior to the Expiration Date (as defined in the Prospectus) or who
cannot complete the procedures for book-entry transfer on a timely basis must
tender their Old Capital Securities according to the guaranteed delivery
procedures set forth in "The Exchange Offer -- Procedures for Tendering Old
Capital Securities" in the Prospectus.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
<PAGE> 2
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
ALL TENDERING HOLDERS COMPLETE THIS BOX:
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF OLD CAPITAL SECURITIES TENDERED
- -----------------------------------------------------------------------------------------------------------
IF BLANK, PLEASE PRINT NAME AND ADDRESS OLD CAPITAL SECURITIES TENDERED
OF REGISTERED HOLDER. (ATTACH ADDITIONAL LIST IF NECESSARY)
- -----------------------------------------------------------------------------------------------------------
AGGREGATE LIQUIDATION AMOUNT
LIQUIDATION AMOUNT OF OLD CAPITAL
CERTIFICATE OF OLD CAPITAL SECURITIES TENDERED
NUMBER(S)* SECURITIES (IF LESS THAN ALL)**
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
TOTAL
AMOUNT
TENDERED:
</TABLE>
- --------------------------------------------------------------------------------
* Need not be completed by book-entry holders.
** Old Capital Securities may be tendered in whole or in part in any
integral multiples of $1,000 (one Old Capital Security) not withstanding
the requirement, applicable to all other transfers of Old Capital
Securities, of minimum transfer amount of $100,000 in Liquidation
Amount. For purposes of tenders of Old Capital Securities in the
Exchange Offer, the requirement for minimum transfers of $100,000
Liquidation Amount will be waived. All Old Capital Securities held shall
be deemed tendered unless a lesser number is specified in this column.
See Instruction 4.
- --------------------------------------------------------------------------------
2
<PAGE> 3
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
<TABLE>
<S> <C>
[ ] CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY BOOK- ENTRY TRANSFER MADE
TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
DTC Account Number
Transaction Code Number
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED OLD CAPITAL
SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO
THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s)
Window Ticket Number (if any)
Date of Execution of Notice of Guaranteed Delivery
Name of Institution which Guaranteed Delivery
If Guaranteed Delivered is to be made By Book-Entry Transfer:
Name of Tendering Institution
DTC Account Number
Transaction Code Number
[ ] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD CAPITAL SECURITIES ARE TO BE
RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE.
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL SECURITIES FOR ITS OWN
ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING
BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
Address:
</TABLE>
Ladies and Gentlemen:
The undersigned hereby tenders to Trenwick Capital Trust I, a statutory
business trust formed under the laws of the State of Delaware (the "Trust"), and
Trenwick Group Inc., a Delaware corporation (the "Company"), the above described
aggregate Liquidation Amount of the Trust's 8.82% Subordinated Capital Income
Securities (the "Old Capital Securities") in exchange for a like aggregate
Liquidation Amount of the Trust's 8.82% Exchange Subordinated Capital Income
Securities (the "Exchange Capital Securities") which have been registered under
the Securities Act of 1933, as amended (the "Securities Act"), upon the terms
and subject to the conditions set forth in the Prospectus dated ,
1997 (as the same may be amended or supplemented from time to time, the
"Prospectus"), receipt of which is acknowledged, and in this Letter of
Transmittal (which, together with the Prospectus, constitute the "Exchange
Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Capital Securities tendered herewith in accordance with the
terms and conditions of the Exchange Offer (including, if the Exchange Offer is
extended
3
<PAGE> 4
or amended, the terms and conditions of any such extension or amendment), the
undersigned hereby sells, assigns and transfers to or upon the order of the
Trust all right, title and interest in and to such Old Capital Securities as are
being tendered herewith. The undersigned hereby irrevocably constitutes and
appoints the Exchange Agent as its agent and attorney-in-fact (with full
knowledge that the Exchange Agent is also acting as agent of the Company and the
Trust in connection with the Exchange Offer) with respect to the tendered Old
Capital Securities, with full power of substitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest), subject only
to the right of withdrawal described in the Prospectus, to (i) deliver
Certificates for Old Capital Securities to the Company or the Trust together
with all accompanying evidences of transfer and authenticity to, or upon the
order of, the Trust, upon receipt by the Exchange Agent, as the undersigned's
agent, of the Exchange Capital Securities to be issued in exchange for such Old
Capital Securities, (ii) present Certificates for such Old Capital Securities
for transfer, and to transfer the Old Capital Securities on the books of the
Trust, and (iii) receive for the account of the Trust all benefits and otherwise
exercise all rights of beneficial ownership of such Old Capital Securities, all
in accordance with the terms and conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS
FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD
CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE OLD CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE TRUST OR THE EXCHANGE AGENT TO BE
NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, SALE, ASSIGNMENT AND TRANSFER
OF THE OLD CAPITAL SECURITIES TENDERED HEREBY, AND THE UNDERSIGNED WILL COMPLY
WITH ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS AGREEMENT (AS DEFINED IN THE
PROSPECTUS). THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE
EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the Old Capital
Securities tendered hereby should be printed above, if they are not already set
forth above, as they appear on the Certificates representing such Old Capital
Securities. The Certificate number(s) and the Old Capital Securities that the
undersigned wishes to tender should be indicated in the appropriate boxes above.
If any tendered Old Capital Securities are not exchanged pursuant to the
Exchange Offer for any reason, or if Certificates are submitted for more Old
Capital Securities than are tendered or accepted for exchange, Certificates for
such nonexchanged or nontendered Old Capital Securities will be returned (or, in
the case of Old Capital Securities tendered by book-entry transfer, such Old
Capital Securities will be credited to an account maintained at DTC), without
expense to the tendering holder, promptly following the expiration or
termination of the Exchange Offer.
The undersigned understands that tenders of Old Capital Securities pursuant
to any one of the procedures described in "The Exchange Offer -- Procedures for
Tendering Old Capital Securities" in the Prospectus and in the instructions
will, upon the Trust's acceptance for exchange of such tendered Old Capital
Securities, constitute a binding agreement between the undersigned and the Trust
upon the terms and subject to the conditions of the Exchange Offer. The
undersigned recognizes that under certain circumstances set forth in the
Prospectus, the Trust may not be required to accept for exchange any of the Old
Capital Securities tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below the undersigned hereby directs that the Exchange Capital
Securities be issued in the name(s) of the undersigned or, in the case of a
book-entry transfer of Old Capital Securities that such Exchange Capital
Securities be credited to the account indicated above maintained at DTC. If
applicable, substitute Certificates representing Old Capital Securities not
exchanged or not accepted for exchange will be issued to the undersigned or, in
the case of a book-entry transfer of Old Capital Securities will be credited to
the account indicated above maintained at DTC. Similarly unless otherwise
indicated under "Special Delivery Instructions" below, please deliver Exchange
Capital Securities to the undersigned at the address shown below the
undersigned's signature.
By tendering Old Capital Securities and executing this Letter of
Transmittal, the undersigned hereby represents and agrees that (i) the
undersigned is not an "affiliate" of the Company or the Trust within the meaning
of Rule 405 under the Securities Act, (ii) any Exchange Capital Securities to be
received by the undersigned are being acquired in the ordinary course of its
business, (iii) the undersigned has no arrangement or understanding with any
person to participate in a distribution (within the meaning of the Securities
Act) of Exchange Capital Securities to be received in the Exchange Offer, and
(iv) if the undersigned is not a broker-dealer, the undersigned is not engaged
in, and does not intend to engage in, a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities. By tendering Old Capital
Securities pursuant to the Exchange Offer and executing this Letter of
Transmittal, a holder of Old Capital Securities which is a broker-dealer
represents and agrees, consistent with certain interpretive letters issued by
the staff of the Division of Corporation Finance of the Securities and Exchange
Commission to third parties, that (a) such Old Capital Securities held by the
broker-dealer are held only as a nominee, or (b) such Old Capital Securities
were acquired by such broker-dealer for its own account as a result of
market-making activities or other trading activities and it will
4
<PAGE> 5
deliver a prospectus (as amended or supplemented from time to time) meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Capital Securities (provided that, by so acknowledging and by
delivering a prospectus, such broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act).
THE COMPANY AND THE TRUST HAVE AGREED THAT, SUBJECT TO THE PROVISIONS OF
THE REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER (AS
DEFINED BELOW) IN CONNECTION WITH RESALES OF EXCHANGE CAPITAL SECURITIES
RECEIVED IN EXCHANGE FOR OLD CAPITAL SECURITIES, WHERE SUCH OLD CAPITAL
SECURITIES WERE ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS OWN ACCOUNT
AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR A
PERIOD ENDING 90 DAYS AFTER THE EXPIRATION DATE (SUBJECT TO EXTENSION UNDER
CERTAIN LIMITED CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS) OR, IF EARLIER, WHEN
ALL SUCH EXCHANGE CAPITAL SECURITIES HAVE BEEN DISPOSED OF BY SUCH PARTICIPATING
BROKER-DEALER. IN THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING
ACTIVITIES (A "PARTICIPATING BROKERDEALER"), BY TENDERING SUCH OLD CAPITAL
SECURITIES AND EXECUTING THIS LETTER OF TRANSMITTAL OR DELIVERING AN AGENT'S
MESSAGE IN LIEU THEREOF, AGREES THAT, UPON RECEIPT OF NOTICE FROM THE COMPANY OR
THE TRUST OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH
MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS
UNTRUE IN ANY MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT TO STATE A
MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR
INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH
THEY WERE MADE, NOT MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS
SPECIFIED IN THE REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER
WILL SUSPEND THE SALE OF EXCHANGE CAPITAL SECURITIES (OR THE EXCHANGE GUARANTEE
OR THE EXCHANGE JUNIOR SUBORDINATED DEBENTURES, AS APPLICABLE) PURSUANT TO THE
PROSPECTUS UNTIL THE COMPANY OR THE TRUST HAS AMENDED OR SUPPLEMENTED THE
PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAS FURNISHED COPIES OF
THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING BROKER-DEALER OR THE
COMPANY OR THE TRUST HAS GIVEN NOTICE THAT THE SALE OF THE EXCHANGE CAPITAL
SECURITIES (OR THE EXCHANGE GUARANTEE OR THE EXCHANGE JUNIOR SUBORDINATED
DEBENTURES, AS APPLICABLE) MAY BE RESUMED, AS THE CASE MAY BE. IF THE COMPANY OR
THE TRUST GIVES SUCH NOTICE TO SUSPEND THE SALE OF THE EXCHANGE CAPITAL
SECURITIES, IT SHALL EXTEND THE 90-DAY PERIOD REFERRED TO ABOVE DURING WHICH
PARTICIPATING BROKERDEALERS ARE ENTITLED TO USE THE PROSPECTUS IN CONNECTION
WITH THE RESALE OF EXCHANGE CAPITAL SECURITIES BY THE NUMBER OF DAYS DURING THE
PERIOD FROM AND INCLUDING THE DATE OF THE GIVING OF SUCH NOTICE TO AND INCLUDING
THE DATE WHEN PARTICIPATING BROKER-DEALERS SHALL HAVE RECEIVED COPIES OF THE
SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO PERMIT RESALES OF THE EXCHANGE
CAPITAL SECURITIES OR TO AND INCLUDING THE DATE ON WHICH THE COMPANY OR THE
TRUST HAS GIVEN NOTICE THAT THE SALE OF EXCHANGE CAPITAL SECURITIES (OR THE
EXCHANGE GUARANTEE OR THE EXCHANGE JUNIOR SUBORDINATED DEBENTURES, AS
APPLICABLE) MAY BE RESUMED, AS THE CASE MAY BE.
As a result, a Participating Broker-Dealer who intends to use the
Prospectus in connection with resales of Exchange Capital Securities received in
exchange for Old Capital Securities pursuant to the Exchange Offer must notify
the Company or the Trust, or cause the Company or the Trust to be notified, on
or prior to the Expiration Date, that it is a Participating Broker-Dealer. Such
notice may be given in the space provided above or may be delivered to the
Exchange Agent at the address set forth in the Prospectus under "The Exchange
Offer -- Exchange Agent."
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive Distributions on such Old Capital Securities and
the undersigned waives the right to receive any Distribution on such Old Capital
Securities accumulated from and including January 31, 1997. Accordingly, holders
of Exchange Capital Securities as of the record date for the payment of
Distributions on August 1, 1997 will be entitled to Distributions accumulated
from and including January 31, 1997.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Trust or the Exchange Agent to be necessary or desirable
to complete the exchange, sale, assignment and transfer of the Old Capital
Securities tendered hereby. All authority herein conferred or agreed to be
conferred in this Letter of Transmittal shall survive the death or incapacity of
the undersigned and any obligation of the undersigned hereunder shall be binding
upon the heirs, executors, administrators, personal representatives, trustees in
bankruptcy, legal representatives, successors and assigns of the undersigned.
Except as stated in the Prospectus, this tender is irrevocable.
5
<PAGE> 6
HOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 2, 5 AND 6)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificates(s) for the Old Capital Securities hereby tendered or on a security
position listing, or by any person(s) authorized to become the registered
holder(s) by endorsements and documents transmitted herewith (including such
opinions of counsel, certificates and other information as may be required by
the Trust or the Exchange Agent to comply with the restrictions on transfer
applicable to the Old Capital Securities). If signature is by an
attorney-in-fact, executor, administrator, trustee, guardian, officer of a
corporation or another acting in a fiduciary capacity or representative
capacity, please set forth the signer's full title. See Instruction 5.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Signature(s) of Holder(s))
Date , 1997
Name(s)
(Please Print)
- --------------------------------------------------------------------------------
Area Code(s) and Telephone Number
- --------------------------------------------------------------------------------
(Tax Identification or Social Security Number(s))
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 2 AND 5)
Authorized Signature
Name
(Please Print)
Date , 1997
Capacity or Title
Name of Firm
Address
(Include Zip Code)
Area Code(s) and Telephone Number
6
<PAGE> 7
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if Exchange Capital Securities and/or any Old Capital
Securities that are not tendered are to be issued in the name of someone other
than the registered holder of the Old Capital Securities whose name(s) appear(s)
above.
Issue:
[ ] Exchange Capital Securities to:
[ ] Old Capital Securities not tendered to:
Name
(PLEASE TYPE OR PRINT)
Address
- ---------------------------------------------------------
- ---------------------------------------------------------
(INCLUDE ZIP CODE)
- ---------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if Exchange Capital Securities and/or any Old Capital
Securities that are not tendered are to be sent to someone other than the
registered holder of the Old Capital Securities whose name(s) appear(s) above,
or to the registered holder(s) at an address other than that shown above.
Mail:
[ ] Exchange Capital Securities to:
[ ] Old Capital Securities not tendered to:
Name
(PLEASE TYPE OR PRINT)
Address
- ---------------------------------------------------------
- ---------------------------------------------------------
(INCLUDE ZIP CODE)
- ---------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
7
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed either if (a) tenders
are to be made pursuant to the procedures for tender by book-entry transfer set
forth in "The Exchange Offer -- Procedures for Tendering Old Capital Securities"
in the Prospectus and an Agent's Message is not delivered or (b) Certificates
are to be forwarded herewith. Timely confirmation of a book-entry transfer of
such Old Capital Securities into the Exchange Agent's account at DTC (a
"book-entry confirmation"), or Certificates as well as this Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, and any other documents required by this
Letter of Transmittal, must be received by the Exchange Agent at its addresses
set forth herein on or prior to the Expiration Date. Tenders by book-entry
transfer may also be made by delivering an Agent's Message in lieu of this
Letter of Transmittal. The term "Agent's Message" means a message, transmitted
by DTC to and received by the Exchange Agent and forming a part of a book-entry
confirmation, which states that DTC has received an express acknowledgment from
the DTC participant, which acknowledgment states that such participant has
received and agrees to be bound by the Letter of Transmittal (including the
representations contained herein) and that the Trust and the Company may enforce
the Letter of Transmittal against such participant. Old Capital Securities may
be tendered in whole or in part in any integral multiples of $1,000 Liquidation
Amount (one Capital Security) notwithstanding the requirement, applicable to all
other transfers of Old Capital Securities, of a minimum transfer amount of
$100,000 in Liquidation Amount. For purposes of tenders of Old Capital
Securities in the Exchange Offer, the requirement for minimum transfers of
$100,000 Liquidation Amount will be waived.
Holders who wish to tender their Old Capital Securities and (i) who cannot
complete the procedures for delivery by book-entry transfer on a timely basis,
(ii) who cannot deliver their Old Capital Securities, this Letter of Transmittal
and all other required documents to the Exchange Agent on or prior to the
Expiration Date or (iii) whose Old Capital Securities are not immediately
available may tender their Old Capital Securities by properly completing and
duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed
delivery procedures set forth in "The Exchange Offer -- Procedures for Tendering
Old Capital Securities" in the Prospectus. Pursuant to such procedures: (a) such
tender must be made by or through an Eligible Institution (as defined below);
(b) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form accompanying this Letter of Transmittal, must be
received by the Exchange Agent on or prior to the Expiration Date; and (c) the
Certificates (or a book-entry confirmation) representing tendered Old Capital
Securities, in proper form for transfer, together with a Letter of Transmittal
(or facsimile thereof or Agent's Message in lieu thereof), properly completed
and duly executed, with any required signature guarantees and any other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent within three (3) Nasdaq Stock Market trading days after the date
of execution of such Notice of Guaranteed Delivery, all as provided in "The
Exchange Offer -- Procedures for Tendering Old Capital Securities" in the
Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile or mail to the Exchange Agent, and must include a guarantee by an
Eligible Institution in the form set forth in such Notice. For Old Capital
Securities to be properly tendered pursuant to the guaranteed delivery
procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on or
prior to the Expiration Date. As used herein and in the Prospectus, "Eligible
Institution" means a firm or other entity identified in Rule 17Ad-15 under the
Exchange Act as "an eligible guarantor institution," including (as such terms
are defined therein) (i) a bank; (ii) a broker, dealer, municipal securities
broker or dealer or government securities broker or dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Neither the Company nor the Trust will accept any alternative, conditional
or contingent tenders. Each tendering holder, by execution of a Letter of
Transmittal (or facsimile thereof), or an Agent's Message in lieu thereof,
waives any right to receive any notice of the acceptance of such tender.
8
<PAGE> 9
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder
(which term, for purposes of this document, shall include any participant
in DTC whose name appears on a security position listing as the owner of
the Old Capital Securities) of Old Capital Securities tendered herewith,
unless such holder(s) has completed either the box entitled "Special
Issuance Instructions" or the box entitled "Special Delivery Instructions"
above, or
(ii) such Old Capital Securities are tendered for the account of a
firm that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the signature(s)
on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Old Capital Securities" is inadequate, the Certificate number(s)
and/or the Liquidation Amount of Old Capital Securities and any other required
information should be listed on a separate signed schedule which is attached to
this Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Capital Securities
will be accepted in whole or in part in any integral multiples of $1,000
Liquidation Amount (one Capital Security) notwithstanding the requirement,
applicable to all other transfers of Old Capital Securities, of a minimum
transfer amount of $100,000 in Liquidation Amount. For purposes of tenders of
Old Capital Securities in the Exchange Offer, the requirement for minimum
transfers of $100,000 Liquidation Amount will be waived. If less than all the
Old Capital Securities evidenced by any Certificate submitted are to be
tendered, fill in the Liquidation Amount of Old Capital Securities which are to
be tendered in the box entitled "Liquidation Amount of Old Capital Securities
Tendered." In such case, new Certificate(s) for the remainder of the Old Capital
Securities that were evidenced by your old Certificate(s) will be sent to the
holder of the Old Capital Securities, promptly after the Expiration Date, unless
the appropriate boxes on this Letter of Transmittal are completed. All Old
Capital Securities represented by Certificates delivered to the Exchange Agent
will be deemed to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Capital Securities may
be withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written, telegraphic,
telex or facsimile transmission of such notice of withdrawal must be timely
received by the Exchange Agent at one of its addresses set forth above or in the
Prospectus on or prior to the Expiration Date. Any such notice of withdrawal
must specify the name of the person who tendered the Old Capital Securities to
be withdrawn, the aggregate Liquidation Amount of Old Capital Securities to be
withdrawn, and (if Certificates for Old Capital Securities have been tendered)
the name of the registered holder of the Old Capital Securities as set forth on
the Certificates for the Old Capital Securities, if different from that of the
person who tendered such Old Capital Securities. If Certificates for the Old
Capital Securities have been delivered or otherwise identified to the Exchange
Agent, then prior to the physical release of such Certificates for the Old
Capital Securities, the tendering holder must submit the serial numbers shown on
the particular Certificates for the Old Capital Securities to be withdrawn and
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Old Capital Securities tendered for the
account of an Eligible Institution. If Old Capital Securities have been tendered
pursuant to the procedures for book-entry transfer set forth in "The Exchange
Offer -- Procedures for Tendering Old Capital Securities," the notice of
withdrawal must specify the name and number of the account at DTC to be credited
with the withdrawal of Old Capital Securities, in which case a notice of
withdrawal will be effective if delivered to the Exchange Agent by written,
telegraphic, telex or facsimile transmission on or prior to the Expiration Date.
Withdrawals of tenders of Old Capital Securities may not be rescinded. Old
Capital Securities properly withdrawn will not be deemed validly tendered for
purposes of the Exchange Offer, but may be retendered at any subsequent time on
or prior to the Expiration Date by following any of the procedures described in
the Prospectus under "The Exchange Offer -- Procedures for Tendering Old Capital
Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Trust, in its sole
discretion, whose determination shall be final and binding on all parties.
Neither the Company, the Trust, any affiliates or assigns of the Company or the
Trust, the Exchange Agent nor any other person shall be under any duty to give
any notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification. Any Old Capital Securities
which have been tendered but which are withdrawn will be returned to the holder
thereof without cost to such holder promptly after withdrawal.
9
<PAGE> 10
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Old
Capital Securities tendered hereby, the signature(s) must correspond exactly
with the name(s) as written on the face of the Certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Old Capital Securities tendered hereby are owned of record by
two or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Old Capital Securities are registered in different name(s)
on several Certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles thereof) as there are
different registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and must submit proper evidence
satisfactory to the Company and the Trust, in their sole discretion, of such
persons' authority to so act.
When this Letter of Transmittal is signed by the registered owner(s) of the
Old Capital Securities listed and transmitted hereby, no endorsement(s) of
Certificate(s) or separate bond power(s) are required unless Exchange Capital
Securities are to be issued in the name of a person other than the registered
holder(s). Signature(s) on such Certificate(s) or bond power(s) must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Old Capital Securities listed, the Certificates must
be endorsed or accompanied by appropriate bond powers, signed exactly as the
name or names of the registered owner(s) appear(s) on the Certificates, and also
must be accompanied by such opinions of counsel, certifications and other
information as the Trust or the Exchange Agent may require in accordance with
the restrictions on transfer applicable to the Old Capital Securities.
Signatures on such Certificates or bond powers must be guaranteed by an Eligible
Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If Exchange Capital
Securities are to be issued in the name of a person other than the signer of
this Letter of Transmittal, or if Exchange Capital Securities are to be sent to
someone other than the signer of this Letter of Transmittal or to an address
other than that shown above, the appropriate boxes on this Letter of Transmittal
should be completed. Certificates for Old Capital Securities not exchanged will
be returned by mail or, if tendered by book-entry transfer, by crediting the
account indicated above maintained at DTC unless the appropriate boxes on this
Letter of Transmittal are completed. See Instruction 4.
7. IRREGULARITIES. The Company and the Trust will determine, in their sole
discretion, all questions as to the form of documents, validity, eligibility
(including time of receipt) and acceptance for exchange of any tender of Old
Capital Securities, which determination shall be final and binding on all
parties. The Company and the Trust reserve the absolute right, in their sole and
absolute discretion, to reject any and all tenders determined by them not to be
in proper form or the acceptance of which, or exchange for, may, in the view of
counsel to the Company and the Trust, be unlawful. The Company and the Trust
also reserve the absolute right, subject to applicable law, to waive any of the
conditions of the Exchange Offer set forth in the Prospectus under "The Exchange
Offer -- Conditions to the Exchange Offer" or any conditions or irregularity in
any tender of Old Capital Securities of any particular holder whether or not
similar conditions or irregularities are waived in the case of other holders.
The Company's and the Trust's interpretation of the terms and conditions of the
Exchange Offer (including this Letter of Transmittal and the instructions
hereto) will be final and binding. No tender of Old Capital Securities will be
deemed to have been validly made until all irregularities with respect to such
tender have been cured or waived. Neither the Company, the Trust, any affiliates
or assigns of the Company, the Trust, the Exchange Agent, nor any other person
shall be under any duty to give notification of any irregularities in tenders or
incur any liability for failure to give such notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Exchange Agent at its address and
telephone number set forth on the front of this Letter of Transmittal.
Additional copies of the Prospectus, this Letter of Transmittal and the Notice
of Guaranteed Delivery may be obtained from the Exchange Agent or from your
broker, dealer, commercial bank, trust company or other nominee.
9. WAIVER OF CONDITIONS. The Company and the Trust reserve the absolute
right, subject to applicable law, to waive satisfaction of any or all conditions
enumerated in the Prospectus.
10
<PAGE> 11
10. NO CONDITIONAL TENDERS. No alternative, conditional or contingent
tenders will be accepted. All tendering holders of Old Capital Securities, by
execution of this Letter of Transmittal, shall waive any right to receive notice
of the acceptance of Old Capital Securities for exchange.
Neither the Company, the Trust, the Exchange Agent nor any other person is
obligated to give notice of any defect or irregularity with respect to any
tender of Old Capital Securities nor shall any of them incur any liability for
failure to give any such notice.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s)
representing Old Capital Securities have been lost, destroyed or stolen, the
holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
Certificate(s) have been followed.
12. SECURITY TRANSFER TAXES. Holders who tender their Old Capital
Securities for exchange will not be obligated to pay any transfer taxes in
connection therewith. If, however, Exchange Capital Securities are to be
delivered to, or are to be issued in the name of, any person other than the
registered holder of the Old Capital Securities tendered, or if a transfer tax
is imposed for any reason other than the exchange of Old Capital Securities in
connection with the Exchange Offer, then the amount of any such transfer tax
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE
EXPIRATION DATE.
11
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
8.82% SUBORDINATED CAPITAL INCOME SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
OF
TRENWICK CAPITAL TRUST I
FULLY AND UNCONDITIONALLY GUARANTEED,
TO THE EXTENT SET FORTH IN THE PROSPECTUS HEREINAFTER REFERRED TO,
BY
TRENWICK GROUP INC.
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the Trust's (as defined below) 8.82% Capital Securities due
February 1, 2037 (the "Old Capital Securities") are not immediately available,
(ii) Old Capital Securities, the Letter of Transmittal and all other required
documents cannot be delivered to The Chase Manhattan Bank (the "Exchange Agent")
on or prior to 5:00 P.M. New York City time, on the Expiration Date (as defined
in the Prospectus referred to below) or (iii) the procedures for delivery by
book-entry transfer cannot be completed on a timely basis. This Notice of
Guaranteed Delivery may be delivered by hand, overnight courier or mail, or
transmitted by facsimile transmission, to the Exchange Agent. See "The Exchange
Offer -- Procedures for Tendering Old Capital Securities" in the Prospectus. In
addition, to utilize the guaranteed delivery procedure to tender Old Capital
Securities pursuant to the Exchange Offer, a completed, signed and dated Letter
of Transmittal relating to the Old Capital Securities (or facsimile thereof)
must also be received by the Exchange Agent prior to 5:00 P.M. New York City
time, on the Expiration Date. Capitalized terms not defined herein have the
meanings assigned to them in the Prospectus.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE CHASE MANHATTAN BANK
By Registered or Certified Mail, Hand Or Overnight Delivery:
55 Water Street, Room 234
North Building
New York, New York 10041
Attention: Sharon Lewis
Confirm by Telephone:
(212) 638-0454
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 638-7380
Delivery of this Notice of Guaranteed Delivery to an address other than as
set forth above, or transmission of this Notice of Guaranteed Delivery via
facsimile to a number other than as set forth above, will not constitute a valid
delivery.
This notice of guaranteed delivery is not to be used to guaranty
signatures. If a signature on a letter of transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Trenwick Group Inc., a Delaware
corporation, and to Trenwick Capital Trust I, a statutory business trust formed
under Delaware law (the "Trust"), upon the terms and subject to the conditions
set forth in the Prospectus dated , 1997 (as the same may be amended
or supplemented from time to time, the "Prospectus"), and the related Letter of
Transmittal (which together constitute the "Exchange Offer"), receipt of which
is hereby acknowledged, the aggregate principal amount of Old Capital Securities
set forth below pursuant to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer -- Procedures for Tendering Old
Capital Securities."
<TABLE>
<S> <C>
Aggregate Liquidation Name(s) of Registered Holder(s):
Amount Tendered: $ *
Certificate No(s). Address(es):
(if available):
Total Liquidation Amount Represented by
Old Capital Securities Certificate(s):
If Old Capital Securities will be tendered by Signature(s):
book-entry transfer, provide the following information:
DTC Account Number:
Date:
Area Code and Telephone Number(s):
</TABLE>
THE GUARANTEE ON THE NEXT PAGE MUST BE COMPLETED
- ---------------
* Old Capital Securities may be tendered in whole or in part in any integral
multiples of $1,000 Liquidation Amount (one Old Capital Security)
notwithstanding the requirement, applicable to any other transfers of Old
Capital Securities, of a minimum transfer amount of $100,000 in Liquidation
Amount. For purposes of tenders of Old Capital Securities in the Exchange
Offer, the requirement for minimum transfers of $100,000 Liquidation Amount
will be waived.
2
<PAGE> 3
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
PLEASE SIGN HERE
<TABLE>
<S> <C>
x
x
Signature(s) of Owner(s) or Date
Authorized Signatory
Area Code and Telephone Number: ______________________________
</TABLE>
Must be signed by the holder(s) of the Old Capital Securities as their
name(s) appear(s) on certificates for Old Capital Securities or on a security
position listing, or by person(s) authorized to become registered holder(s) by
endorsement and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title below.
<TABLE>
<S> <C>
Please Print name(s) and address(es)
Name(s):
Capacity:
Address(es):
</TABLE>
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
3
<PAGE> 4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
learning agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
Exchange Agent, at one of its addresses set forth above, either the Old Capital
Securities tendered hereby in proper form for transfer, or confirmation of the
book-entry transfer of such Old Capital Securities to the Exchange Agent's
account at The Depositary Trust Company ("DTC"), pursuant to the procedures for
book-entry transfer set forth in the Prospectus, in either case together with
one or more properly completed and duly executed Letter(s) of Transmittal (or
facsimile thereof) and any other required documents within three (3) Nasdaq
Stock Market trading days after the date of execution of this Notice of
Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Old Capital Securities tendered hereby to the Exchange Agent
within the time period set forth above and that failure to do so could result in
a financial loss to the undersigned.
<TABLE>
<S> <C>
- --------------------------------------- ---------------------------------------
Name of Firm Authorized Signature
- --------------------------------------- ---------------------------------------
Address Title
- --------------------------------------- ---------------------------------------
Zip Code (Please Type or Print)
Area Code and Telephone No. Dated:
</TABLE>
NOTE: DO NOT SEND OLD CAPITAL SECURITIES WITH THIS NOTICE OF GUARANTEED
DELIVERY. ACTUAL SURRENDER OF OLD CAPITAL SECURITIES MUST BE MADE PURSUANT TO,
AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL.
4
<PAGE> 1
EXHIBIT 99.3
, 1997
EXCHANGE AGENT AGREEMENT
(the "Agreement")
The Chase Manhattan Bank
55 Water Street, Room 234
North Building
New York, New York 10041
Ladies and Gentlemen:
Trenwick Capital Trust I, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), proposes to make an offer (the "Exchange
Offer") to exchange its 8.82% Subordinated Capital Income Securities (the "Old
Capital Securities") for its registered 8.82% Exchange Subordinated Capital
Income Securities (the "Exchange Capital Securities"). The terms and conditions
of the Exchange Offer, as currently contemplated are set forth in a prospectus,
dated , 1997 (the "Prospectus"), proposed to be distributed to all
record holders of the Old Capital Securities. The Old Capital Securities and the
Exchange Capital Securities collectively are referred to herein as the "Capital
Securities" or the "Securities".
The Trust hereby appoints The Chase Manhattan Bank to act as exchange agent
(the "Exchange Agent") in connection with the Exchange Offer. References
hereinafter to "you" shall refer to The Chase Manhattan Bank.
The Exchange Offer is expected to be commenced by the Trust on or about
, 1997. The Letter of Transmittal accompanying the Prospectus is to
be used by the holders of the Old Capital Securities to accept the Exchange
Offer, and contains instructions with respect to the delivery of certificates
for Old Capital Securities tendered.
The Exchange Offer shall expire at 5:00 p.m., New York City time, on
, 1997 or on such later date or time to which the Trust may extend
the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions
set forth in the Prospectus, the Trust and Trenwick Group Inc. (the "Company")
expressly reserve the right to extend the Exchange Offer from time to time and
may extend the Exchange Offer by given oral (confirmed in writing) or written
notice to you before 9:00 a.m., New York City time, on the business day
following the previously scheduled Expiration Date.
The Trust and the Company expressly reserve the right to delay, amend or
terminate the Exchange Offer, and not to accept for exchange any Old Capital
Securities not theretofore accepted for exchange, upon the occurrence of any of
the conditions of the Exchange Offer specified in the Prospectus under the
captions "The Exchange Offer -- Terms of the Exchange Offer" and "-- Conditions
to the Exchange Offer". The Trust or the Company will give to you as promptly as
practicable oral (confirmed in writing) or written notice of any delay,
amendment, termination or nonacceptance.
In carrying out your duties as Exchange Agent, you are to act in accordance
with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth herein and such duties which are necessarily
incidental thereto.
2. You will establish an account with respect to the Old Capital
Securities at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Exchange Offer within two (2) business days
after the date of the Prospectus, and any financial institution that is a
participant in the Book-Entry Transfer Facility's systems may make
book-entry delivery of the Old Capital Securities by causing the Book-Entry
Transfer Facility to transfer such Old Capital Securities into your account
in accordance with the Book-Entry Transfer Facility's procedure for such
transfer.
3. You are to examine each of the Letters of Transmittal and
certificates for Old Capital Securities (or confirmation of book-entry
transfer into your account at the Book-Entry Transfer Facility) and any
<PAGE> 2
other documents delivered or mailed to you by or for holders of the Old
Capital Securities to ascertain whether: (i) the Letters of Transmittal and
any such other documents are duly executed and properly completed in
accordance with instructions set forth therein and (ii) the Old Capital
Securities have otherwise been properly tendered. In each case where the
Letter of Transmittal or any other document has been improperly completed
or executed or any of the certificates for Old Capital Securities are not
in proper form for transfer or some other irregularity in connection with
the acceptance of the Exchange Offer exists you will endeavor to inform the
presenters of the need for fulfillment of all requirements and to take any
other action as may be necessary or advisable to cause such irregularity to
be corrected.
4. With the approval of the Chairman of the Board or the Vice
President and Treasurer of the Company (such approval, if given orally,
promptly to be confirmed in writing) or any other party designed by such
officer in writing, you are authorized to waive any irregularities in
connection with any tender of Old Capital Securities pursuant to the
Exchange Offer.
5. Tenders of Old Capital Securities may be made only as set forth in
the Letter of Transmittal and Old Capital Securities shall be considered
properly tendered to you only when tendered in accordance with the
procedures set forth therein.
Notwithstanding the provisions of this paragraph 5 above, Old Capital
Securities which the Chairman of the Board or the Vice President and Treasurer
of the Company or any other party designated by any such officer in writing
shall approve as having been properly tendered shall be considered to be
properly tendered (such approval, if given orally, promptly shall be confirmed
in writing).
6. You shall advise the Company with respect to any Old Capital
Securities delivered subsequent to the Expiration Date and accept its
instructions with respect to disposition of such Old Capital Securities.
7. You shall accept tenders:
(a) in cases where the Old Capital Securities are registered in two
(2) or more names only if signed by all named holders; and
(b) in cases where the signing person (as indicated on the Letter
of Transmittal) is acting in a fiduciary or a representative capacity
only when proper evidence of his or her authority so to act is
submitted; and
(c) from persons other than the registered holder of Old Capital
Securities provided that customary transfer requirements, including any
applicable transfer taxes, are fulfilled.
You shall accept partial tenders of Old Capital Securities where so
indicated and as permitted in the Letter of Transmittal and deliver certificates
for Old Capital Securities to the transfer agent for split-up and return any
indentured Old Capital Securities to the holder (or such other person as may be
designated in the Letter of Transmittal) as promptly as practicable after
expiration or termination of the Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Trust will notify you (such notice if given orally,
promptly to be confirmed in writing) of its acceptance, promptly after the
Expiration Date, of all Old Capital Securities properly tendered and you,
on behalf of the Trust, will exchange such Old Capital Securities for
Exchange Capital Securities and cause such Old Capital Securities to be
cancelled. Delivery of Exchange Capital Securities will be made on behalf
of the Trust by you at the rate of $1,000 Liquidation Amount (as defined in
the Prospectus) of Exchange Capital Securities for each $1,000 Liquidation
Amount of the Old Capital Securities tendered promptly after notice (such
notice if given orally, promptly to be confirmed in writing) of acceptance
of said Old Capital Securities by the Trust; provided, however, that in all
cases, Old Capital Securities tendered pursuant to the Exchange Offer will
be exchanged only after timely receipt by you of certificates for such Old
Capital Securities (or confirmation of book-entry transfer into your
account at the Book-Entry Transfer Facility), a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees and any other required document. You shall issue
Exchange Capital Securities only in aggregate liquidation amounts of $1,000
or any integral multiple thereof.
-2-
<PAGE> 3
9. Tenders pursuant to the Exchange Offer are irrevocable, except
that, subject to the terms and upon the conditions set forth in the
Prospectus and the Letter of Transmittal, Old Capital Securities tendered
pursuant to the Exchange Offer may be withdrawn at any time prior to the
Expiration Date.
10. The Trust shall not be required to exchange any Old Capital
Securities tendered if any of the conditions set forth in the Exchange
Offer are not met. Notice of any decision by the Trust not to exchange any
Old Capital Securities tendered shall be given (such notices if given
orally, promptly shall be confirmed in writing) by the Trust or the Company
to you.
11. If, pursuant to the Exchange Offer, the Trust does not accept for
exchange all or part of the Old Capital Securities tendered because of an
invalid tender, the occurrence of certain other events set forth in the
Prospectus under the captions "The Exchange Offer -- Terms of the Exchange
Offer" and "-- Conditions to the Exchange Offer" or otherwise, you shall as
soon as practicable after the expiration or termination of the Exchange
Offer return those certificates for unaccepted Old Capital Securities (or
effect appropriate book-entry transfer), together with any related required
documents and the Letters of Transmittal relating thereto that are in your
possession, to the persons who deposited them.
12. All certificates for reissued Old Capital Securities, unaccepted
Old Capital Securities or for Exchange Capital Securities shall be
forwarded by (a) first-class mail, postage pre-paid under a blanket surety
bond protecting you and the Trust from loss or liability arising out of the
non-receipt or non-delivery of such certificates or (b) by registered mail
insured separately for the replacement value of each of such certificates.
13. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or other
persons or to engage or utilize any persons to solicit tenders.
14. As Exchange Agent hereunder you:
(a) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness
of any of the certificates or the Old Capital Securities represented
thereby deposited with you pursuant to the Exchange Offer, and will not
be required to and will make no representation as to the validity, value
or genuineness of the Exchange Offer;
(b) shall not be obligated to take any legal action hereunder which
might in your reasonable judgment involve any expense or liability,
unless you shall have been furnished with reasonable indemnity;
(c) shall not be liable to the Trust or the Company for any action
taken or omitted by you, or any action suffered by you to be taken or
omitted, without negligence, misconduct or bad faith on your part, by
reason of or as a result of the administration of your duties hereunder
in accordance with the terms and conditions of this Agreement or by
reason of your compliance with the instructions set forth herein or with
any written or oral instructions delivered to you pursuant hereto, and
may reasonably rely on and shall be protected in acting in good faith in
reliance upon any certificate, instrument, opinion, notice, letter,
facsimile or other document or security delivered to you and reasonably
believed by you to be genuine and to have been signed by the proper
party or parties;
(d) may reasonably act upon any tender, statement, request,
comment, agreement or other instrument whatsoever not only as to its due
execution and validity and effectiveness of its provisions, but also as
to the truth and accuracy of any information contained therein, which
you shall in good faith reasonably believe to be genuine or to have been
signed or represented by a proper person or persons;
(e) may rely on and shall be protected in acting upon written
notice or oral instructions from any officer of the Company or any
trustee of the Trust with respect to the Exchange Offer;
-3-
<PAGE> 4
(f) shall not advise any person tendering Old Capital Securities
pursuant to the Exchange Offer as to the wisdom of making such tender or
as to the market value or decline or appreciation in market value of any
Old Capital Securities;
(g) may consult with counsel and the written advice or opinion of
such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by you hereunder in
good faith and in reliance thereon.
15. You shall send to all holders of Old Capital Securities a copy of
the Prospectus, the Letter of Transmittal, the Notice of Guaranteed
Delivery, as defined in the Prospectus, and such other documents
(collectively, the "Exchange Offer Documents") as may be furnished by the
Trust or the Company to commence the Exchange Offer and take such other
action as may from time to time be requested by the Trust or the Company or
its counsel (and such other action as you may reasonably deem appropriate)
to furnish copies of the Exchange Offer Documents or such other forms as
may be approved from time to time by the Trust or the Company, to all
holders of Old Capital Securities and to all persons requesting such
documents and to accept and comply with telephone requests for information
relating to the Exchange Offer, provided that such information shall relate
only to the procedures for accepting (or withdrawing from) the Exchange
Offer. The Company will furnish you with copies of such documents at your
request. All other requests for information relating to the Exchange Offer
shall be directed to: Trenwick Group Inc., Metro Center, One Station Place,
Stamford, Connecticut 06902, Attention: Jane T. Wiznitzer, Vice
President -- Legal Affairs and Secretary. Telephone requests may be
directed to (203) 353-5500.
16. You shall advise by facsimile transmission or telephone, and
promptly thereafter confirm in writing to Jane T. Wiznitzer of the Company,
and such other person or persons as the Trust may request in writing, not
later than 7:00 p.m., New York City time, each business day, and more
frequently if reasonably requested, up to and including the Expiration
Date, as to the number of Old Capital Securities which have been tendered
pursuant to the Exchange Offer and the items received by you pursuant to
this Agreement, separately reporting and giving cumulative totals as to
items properly received and items improperly received. In addition, you
will also inform, and cooperate in making available to, the Trust or any
such other person or persons as the Company requests in writing from time
to time prior to the Expiration Date of such other information as it
reasonably requests. Such cooperation shall include, without limitation,
the granting by you to the Company and such person as the Company may
request of access to those persons on your staff who are responsible for
receiving tenders, in order to ensure that immediately prior to the
Expiration Date the Company shall have received information in sufficient
detail to enable it to decide whether to extend the Exchange Offer. You
shall prepare a final list of all persons whose tenders were accepted, the
aggregate principal amount of Old Capital Securities tendered and the
aggregate principal amount of Old Capital Securities accepted and deliver
said list to the Company.
17. Letters of Transmittal and Notices of Guaranteed Delivery shall be
stamped by you as to the date and the time of receipt thereof and shall be
preserved by you for a period of time at least equal to the period of time
you customarily preserve other records pertaining to the transfer of
securities. You shall dispose of unused Letters of Transmittal and other
surplus materials in accordance with your customary procedures.
18. You hereby expressly waive any lien, encumbrance or right of
set-off whatsoever that you may have with respect to funds deposited with
you for the payment of transfer taxes by reasons of amounts, if any,
borrowed by the Company, or any of its subsidiaries or affiliates pursuant
to any loan or credit agreement with you or for compensation owed to you
hereunder.
19. For services rendered as Exchange Agent hereunder you shall be
entitled to such compensation and reimbursement of out-of-pocket expenses
as set forth on Schedule I attached hereto.
20. You hereby acknowledge receipt of the Prospectus, the Letter of
Transmittal and the other documents associated with the Exchange Offer
attached hereto and further acknowledge that you have examined each of
them. Any inconsistency between this Agreement, on the one hand, and the
-4-
<PAGE> 5
Prospectus, the Letter of Transmittal and such other forms (as they may be
amended from time to time), on the other hand, shall be resolved in favor
of the latter two documents, except with respect to the duties, liabilities
and indemnification of you as Exchange Agent which shall be controlled by
this Agreement.
21. Each of the Trust and the Company, jointly and severally, agrees
to indemnify and hold you harmless in your capacity as Exchange Agent
hereunder against any liability, cost or expense, including reasonable
attorneys' fees and expenses, arising out of or in connection with your
appointment as Exchange Agent and the performance of your duties hereunder,
including, without limitation, any act, omission, delay or refusal made by
you in reasonable reliance upon any signature, endorsement, assignment,
certificate, order, request, notice, instruction or other instrument or
document reasonably believed by you to be valid, genuine and sufficient and
in accepting any tender or effecting any transfer of Old Capital Securities
reasonably believed by you in good faith to be authorized, and in delaying
or refusing in good faith to accept any tenders or effect any transfer of
Old Capital Securities; provided, however, that neither the Trust nor the
Company shall be liable for indemnification or otherwise for any loss,
liability, cost or expense to the extent arising out of your negligence,
willful misconduct or bad faith.
22. You shall deliver or cause to be delivered, in a timely manner, to
each governmental authority to which any transfer taxes are payable in
respect of the exchange of Old Capital Securities your check in the amount
of all transfer taxes so payable, and the Company shall reimburse you for
the amount of any and all transfer taxes payable in respect of the exchange
of Old Capital Securities; provided, however, that you shall reimburse the
Trust for amounts refunded to you in respect of your payment of any such
transfer taxes, at such time as such refund is received by you.
23. This Agreement and your appointment as Exchange Agent hereunder
shall be construed and enforced in accordance with the laws of the State of
New York applicable to agreements made and to be performed entirely within
such state, and without regard to conflicts of law principles, and shall
insure to the benefit of, and the obligations created hereby shall be
binding upon, the successors and assigns of each of the parties hereto.
24. This Agreement may be executed in two (2) or more counterparts,
each of which shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
25. In case any provision of this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
26. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, cancelled or waived, in whole or in part, except by a
written instrument signed by a duly authorized representative of the party
to be charged. This Agreement may not be modified orally.
27. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including
facsimile) and shall be given to such party, addressed to it, as its
address or telecopy number set forth below:
If to the Trust or the Company:
Trenwick Group Inc.
Metro Center
One Station Place
Stamford, Connecticut 06902
Facsimile: (203) 353-5544
Attention: Jane T. Wiznitzer
-5-
<PAGE> 6
If to the Exchange Agent:
The Chase Manhattan Bank
55 Water Street, Room 234
North Building
New York, New York 10041
Facsimile: (212) 638-7380
Attention: Sharon Lewis
28. Unless terminated earlier by the parties hereto, this Agreement
shall terminate ninety (90) days follow the Expiration Date.
Notwithstanding the foregoing, Paragraphs 18, 19 and 21 shall survive the
termination of this Agreement. Upon any termination of this Agreement, you
shall promptly deliver to the Company any certificates for Old Capital
Securities, funds or property (including, without limitation, Letters of
Transmittal and any other documents relating to the Exchange Offer) then
held by you as Exchange Agent under this Agreement.
29. This Agreement shall be binding and effective as of the date
hereof.
Please acknowledge receipt of this Agreement and confirm the arrangements
herein provided by signing and returning the enclosed copy.
TRENWICK CAPITAL TRUST I
By:
--------------------------------------
Name:
Title: Administrative Trustee
By:
--------------------------------------
Name:
Title: Administrative Trustee
By:
--------------------------------------
Name:
Title: Administrative Trustee
TRENWICK GROUP INC.
By:
--------------------------------------
James F. Billett, Jr.
Chairman, President and Chief
Executive Officer
Accepted as the date
first above written:
THE CHASE MANHATTAN BANK
By:
- --------------------------------------
Name:
Title:
-6-
<PAGE> 7
TRENWICK CAPITAL TRUST I
EXCHANGE AGENCY
FEE SCHEDULE
<TABLE>
<S> <C>
Flat Fee...................................... Five Thousand U.S. Dollars ($5,000.00)
</TABLE>
Out-Of-Pocket Expenses
Fees quoted do not include out-of-pocket expenses including, but not
limited to, reasonable legal fees and expenses, facsimile, stationary, postage,
telephone, overnight courier and messenger costs, all of which shall be paid by
the Trust.
-7-
