SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
April 20, 1999
LEHMAN BROTHERS HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-9466 13-3216325
(Commission File Number) (IRS Employer Identification No.)
3 World Financial Center
New York, New York 10285
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including
area code: (212) 526-7000
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Item 7. Financial Statements and Exhibits
(c) Exhibits
The following Exhibits are incorporated by reference into two
Registration Statements on Form S-3 (Registration Nos. 333-50197 and 333-76339)
as exhibits thereto and are filed as part of this Report.
4.01 Third Supplemental Indenture, dated as of April 20, 1999, between Lehman
Brothers Holdings Inc. (the "Corporation") and The Chase Manhattan Bank, as
trustee.
4.02 7.875% Subordinated Deferrable Interest Debenture due 2048.
4.03 Amended and Restated Trust Agreement, dated as of April 20, 1999, among the
Corporation, The Chase Manhattan Bank, as Property Trustee, The Chase
Manhattan Bank Delaware, as Delaware Trustee, and the Regular Trustees
named therein.
4.04 Certificates Evidencing Preferred Securities.
4.05 Guarantee Agreement, dated as of April 20, 1999, between the Corporation
and The Chase Manhattan Bank, as trustee.
8.01 Opinion and consent of Simpson Thacher & Bartlett regarding certain tax
matters.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
LEHMAN BROTHERS HOLDINGS INC.
By: /s/ Jennifer Marre
Jennifer Marre
Vice President
Date: April 20, 1999
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EXHIBIT INDEX
Exhibit No. Exhibit
4.01 Third Supplemental Indenture, dated as of April 20, 1999, between Lehman
Brothers Holdings Inc. (the "Corporation") and The Chase Manhattan Bank, as
trustee.
4.02 7.875% Subordinated Deferrable Interest Debenture due 2048.
4.03 Amended and Restated Trust Agreement, dated as of April 20, 1999, among the
Corporation, The Chase Manhattan Bank, as Property Trustee, The Chase
Manhattan Bank Delaware, as Delaware Trustee, and the Regular Trustees
named therein.
4.04 Certificates Evidencing Preferred Securities.
4.05 Guarantee Agreement, dated as of April 20, 1999, between the Corporation
and The Chase Manhattan Bank, as trustee.
8.01 Opinion and consent of Simpson Thacher & Bartlett regarding certain tax
matters.
Exhibit 4.01
THIS THIRD SUPPLEMENTAL INDENTURE, dated as of April 20, 1999,
is between LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and
existing under the laws of the State of Delaware (the "Company"), and THE CHASE
MANHATTAN BANK, a banking corporation duly organized and existing under the laws
of the State of New York, acting as Trustee under the Indenture referred to
below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has duly authorized the execution and
delivery of an Indenture dated as of February 1, 1996 (the "Indenture"), as
amended and supplemented, to provide for the issuance from time to time of its
unsecured notes or other evidences of indebtedness to be issued in one or more
series (the "Securities"), as in the Indenture provided, up to such principal
amount or amounts as may from time to time be authorized in or pursuant to one
or more resolutions of the Board of Directors;
WHEREAS, the Company will sell on the date hereof to Lehman
Brothers Holdings Capital Trust II, a Delaware statutory business trust ("Trust
II"), a series of Securities entitled the "7.875% Subordinated Deferrable
Interest Debentures due 2048" (the "Subordinated Debentures");
WHEREAS, the Company has duly authorized the execution and
delivery of this Third Supplemental Indenture in order to provide for certain
supplements to the Indenture which shall only be applicable to the Subordinated
Debentures;
WHEREAS, all acts and things necessary to make this Third
Supplemental Indenture a valid agreement of the Company according to its terms
have been done and performed, and the execution and delivery of this Third
Supplemental Indenture have in all respects been duly authorized;
NOW, THEREFORE, in consideration of the premises, of the
purchase and acceptance of the Securities by the Holders thereof, and of the sum
of one dollar duly paid to it by the Trustee at the execution and delivery of
these presents, the receipt whereof is hereby acknowledged, the Company
covenants and agrees with the Trustee to supplement the Indenture, only for
purposes of the Subordinated Debentures, as follows:
SECTION 1. AMENDMENTS TO THE INDENTURE
1.1 Amendment to Section 101 of the Indenture. Section 101 of
the Indenture is hereby amended solely with respect to the Subordinated
Indentures by adding the following new definitions thereto, in the appropriate
alphabetical sequence:
"Debentures" means the Company's 7.875% Subordinated
Deferrable Interest Debentures due 2048.
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"Declaration" means the Amended and Restated Declaration of
Trust, dated as of April 20, 1999 among the Company and the
trustees named therein.
"Trust II" means Lehman Brothers Capital Trust II, a
Delaware statutory business trust.
1.2 Amendment to Section 501 of the Indenture. Section 501 is
amended by deleting the "or" at the end of paragraph (6) and inserting "; or" at
the end of paragraph (7) in place of the period and adding the following at the
end thereof:
"(8) Trust II shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its
existence except in connection with (i) distribution of the
Securities held by Trust II to holders of its securities in
liquidation of such holders' interests in Trust II, (ii)
redemption of all of the securities issued by Trust II, or
(iii) mergers, consolidations or amalgamations, each as
permitted by Section 3.15 of the Declaration."
1.3 Amendment to Section 902 of the Indenture. Section
902 is amended to add the following at the end thereof:
"For purposes of this Section 902, if the Debentures are held
by Trust II, the consent of not less than 66 2/3% of the
aggregate liquidation amount of the securities issued by Trust
II shall be required in order for such supplemental indenture
to be effective."
1.4 Amendment to Section 1007 of the Indenture. Section
1007 is amended to add the following at the end thereof:
"For purposes of this Section 1007, if the Debentures are held
by Trust II, the consent of not less than a majority of the
aggregate liquidation amount of the securities issued by Trust
II shall be required in order to waive a covenant."
1.5 Amendment to Section 513 of the Indenture. Section
513 is amended to add the following at the end thereof:
"For purposes of this Section 513, if the Debentures are held
by Trust II, the consent of not less than a majority of the
aggregate liquidation amount of the securities issued by Trust
II shall be required in order to waive such default."
1.6 Amendment to Article Ten of the Indenture. Article Ten of
the Indenture is amended to add the following covenant at the end of such
Article:
"SECTION 1010. Trust Covenants.
The Company shall, for so long as Trust II is in existence:
(i) maintain directly or indirectly 100% ownership of the
common securities of Trust II, (ii) cause Trust II to remain a
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statutory business trust and not to be voluntarily dissolved,
wound-up, liquidated or terminated, except as provided for in
the Declaration, (iii) use its commercially reasonable efforts
to assure that Trust II will not be an "investment company"
for purposes of the Investment Company Act of 1940, (iv) take
no action that would be reasonably likely to cause Trust II to
be classified as an association in a publicly traded
partnership taxable as a corporation for United States federal
income tax purposes, and (v) agree to pay all debts and
obligations (other than with respect to the securities issued
by Trust II) and all costs and expenses of Trust II
(including, but not limited to, all costs and expenses
relating to the organization of Trust II, the fees and
expenses of the trustees and all costs and expenses relating
to the operation of Trust II ) and to pay any and all taxes,
duties, assessments or governmental charges of whatever nature
(other than withholding taxes) imposed on Trust II by the
United States, or any other taxing authority, so that the net
amounts received and retained by Trust II after paying such
expenses will be equal to the amounts Trust II would have
received had no such costs or expenses been incurred by or
imposed on the Trust II. The foregoing obligations of the
Company are for the benefit of, and shall be enforceable by,
any Person to whom any such debts, obligations, costs,
expenses and taxes are owed (each, a "Creditor") whether or
not such Creditor has received notice thereof. Any such
Creditor may enforce such obligations of the Company directly
against the Company, and the Company irrevocable waives any
right or remedy to require that any such Creditor take any
action against Trust II or any other Person before proceeding
against the Company.
SECTION 2. MISCELLANEOUS
2.1 Debentures. Attached hereto as Exhibit A is a form of the
Subordinated Debenture.
2.2 Separability. In case any provision in this Third
Supplemental Indenture 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.
2.3 Continuance of Indenture. This Third Supplemental
Indenture supplements the Indenture and shall be a part of and subject to all
the terms thereof. The Indenture, as supplemented by this Third Supplemental
Indenture, shall continue in full force and effect.
2.4 The Trustee. The Trustee shall not be responsible in any
manner for or in respect of the validity or sufficiency of this Third
Supplemental Indenture, or for or in respect of the recitals contained herein,
all of which recitals are made by the Company solely.
2.5 Governing Law. This Third Supplemental Indenture shall be
governed by and construed in accordance with the laws of the State of New York.
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2.6 Defined Terms. All capitalized terms used in this Third
Supplemental Indenture which are defined in the Indenture, but not otherwise
defined herein, shall have the same meanings assigned to them in the Indenture.
2.7 Counterparts. This Third Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
The Chase Manhattan Bank hereby accepts the trusts in this
Third Supplemental Indenture declared and provided, upon the terms and
conditions hereinabove set forth.
IN WITNESS WHEREOF, Lehman Brothers Holdings Inc. has caused
this Third Supplemental Indenture to be signed and acknowledged by its
President, its Chairman of the Board, one of its Vice Presidents, its Chief
Executive Officer or its Treasurer, and The Chase Manhattan Bank, as Trustee,
has caused this Third Supplemental Indenture to be signed and acknowledged by
one its authorized officers, and its corporate seal to be affixed hereunto, and
the same to be attested by one of its authorized officers, as of the day and
year first above written.
LEHMAN BROTHERS HOLDINGS INC.
By: /s/ Jennifer Marre
Name: Jennifer Marre
Title: Vice President
THE CHASE MANHATTAN BANK, as Trustee
By: /s/ Francine Springer
Name: Francine Springer
Title: Authorized Signatory
Exhibit 4.02
This Debenture is a Global Debenture within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Debenture is exchangeable for Debentures
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
Debenture (other than a transfer of this Debenture as a whole by the Depositary
to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any Debenture 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.
No. D-1 $371,134,025
LEHMAN BROTHERS HOLDINGS INC.
7.875% SUBORDINATED DEFERRABLE INTEREST DEBENTURE DUE 2048
Lehman Brothers Holdings Inc., a corporation duly organized and
existing under the laws of the State of Delaware (herein referred to as the
"Company"), for value received, hereby promises to pay to THE CHASE MANHATTAN
BANK, as Property Trustee (the "Property Trustee") for LEHMAN BROTHERS HOLDINGS
CAPITAL TRUST II (the "Trust"), at the office or agency of the Company in the
Borough of Manhattan, the City of New York, the principal sum of THREE HUNDRED
SEVENTY-ONE MILLION ONE HUNDRED THIRTY-FOUR THOUSAND TWENTY-FIVE dollars on June
30, 2048, in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts, and to pay interest on said principal sum at said office or agency, in
like coin or currency, at the rate per annum specified in the title of this
Debenture until the principal hereof becomes due and payable, and on any overdue
principal 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 during the period in which such principal is overdue, compounded
quarterly, to the registered holder of this Debenture, until payment of said
principal sum has been made or duly provided for. Interest on this Debenture,
(computed as set forth herein) shall be payable quarterly (subject to deferral
as set forth herein) in arrears on March 31, June 30, September 30 and December
31 of each year (each an "Interest Payment Date"), commencing June 30, 1999,
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from April 20, 1999 or the most recent Interest Payment Date to which interest
has been paid or duly provided for.
The interest so payable on any Interest Payment Date will, subject to
certain exceptions provided in the Indenture referred to on the reverse hereof,
be paid to the person in whose name this Debenture (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of business
on the Business Day prior to the relevant Interest Payment Date (each a "Regular
Record Date"). Interest may, at the option of the Company, be paid by check
mailed to the person entitled thereto at such person's address as it appears in
the registry books of the Company.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS DEBENTURE SET FORTH
ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, LEHMAN BROTHERS HOLDINGS INC. has caused this
instrument to be signed by its Chairman of the Board, its Vice Chairman, its
President, its Chief Financial Officer, one of its Vice Presidents or its
Treasurer by manual or facsimile signature, attested by its Secretary or one of
its Assistant Secretaries by manual or facsimile signature.
LEHMAN BROTHERS HOLDINGS INC.
By: /s/ Karen M. Muller
Karen M. Muller
Vice President
Attest:
/s/ Eileen Bannon
Eileen Bannon
Assistant Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: April 20, 1999
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ Francine Springer
Name: Francine Springer
Title: Assistant Vice President
<PAGE>
(Reverse of Debenture)
LEHMAN BROTHERS HOLDINGS INC.
7.875% SUBORDINATED DEFERRABLE INTEREST DEBENTURE DUE 2048
This Debenture is one of a duly authorized series of Debentures of the
Company designated as the 7.875% Subordinated Deferrable Interest Debentures Due
2048 of the Company (herein called the "Debentures"), limited (except as
otherwise provided in the Indenture referred to below) in aggregate principal
amount to $409,278,375. The Debentures are one of an indefinite number of series
of debt securities of the Company (herein collectively called the "Securities"),
issued or issuable under and pursuant to an indenture, dated as of February 1,
1996, as amended and supplemented (herein called the "Indenture"), between the
Company and The Chase Manhattan Bank, formerly known as Chemical Bank, as
Trustee (herein called the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Debentures. The separate series of
Securities may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different redemption provisions or repayment or repurchase rights (if any),
may be subject to different sinking, purchase or analogous funds (if any), may
be subject to different covenants and Events of Default, as defined in the
Indenture, and may otherwise vary as provided in the Indenture.
Payment of the principal of and interest on this Debenture is, to the
extent provided in the Indenture, subordinated and subject in right of payment
to the prior payment in full when due of the principal of (and premium, if any)
and interest, if any, on all Senior Debt, as defined in the Indenture, of the
Company and this Debenture is issued subject to the provisions of the Indenture
with respect thereto. Each registered holder of this Debenture, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
expressly directs the Trustee on his or her behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee as his or her attorney-in-fact for any and all such
purposes. Each registered 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 Debt, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions. Each registered holder thereof, by his or her acceptance
hereof, agrees to treat the Debentures as indebtedness for all United States
federal income tax purposes.
Subject to Article Eleven of the Indenture, at any time on or after
June 30, 2004, and prior to maturity, the Company shall have the right to redeem
this Debenture at the option of the Company, in whole or in part, at 100% of the
principal amount of such Debentures, plus any accrued but unpaid interest, to
the Redemption Date.
<PAGE>
If an Investment Company Event (as defined in the Amended and Restated
Declaration of Trust of the Trust, dated April 20, 1999 among the Company, as
Sponsor, the Trust, and the trustees of the Trust named thereto (the
"Declaration") shall occur and be continuing, the Company may, at any time
within 90 days following the occurrence of such Investment Company Event, redeem
the Debentures, in whole but not in part, at a Redemption Price equal to 100% of
the principal amount thereof, plus accrued and unpaid interest thereon to the
Redemption Date. Subject to certain conditions described in the Indenture, in
the event of the occurrence and continuation of a Tax Event (as defined in the
Declaration), in certain circumstances the Company may redeem the Debentures, in
whole but not in part, at any time within 90 days following the occurrence of a
Tax Event at a Redemption Price equal to 100% of the aggregate principal amount
thereof, plus accrued and unpaid interest thereon to the Redemption Date. Any
redemption pursuant to this paragraph shall be made upon not less than 30 nor
more than 60 days' notice to the Trustee and Holders of the Debentures.
If less than all the Debentures are to be redeemed by the Company, the
Debentures to be redeemed will be selected by lot or by such other method as the
Trustee shall deem fair and appropriate. The Debentures are not subject to a
sinking fund.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof will be
issued in the name of the registered holder hereof upon the surrender hereof at
a Place of Payment (as defined in the Indenture).
In case an Event of Default with respect to the Debentures shall have
occurred and be continuing, the principal hereof 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 omission by the Company
to pay interest during an Extension Period (as defined below) as permitted
hereby shall not constitute an Event of Default under Section 501 of the
Indenture. An "Event of Default" means any of those events set forth in Section
501 of the Indenture, and the event that, when the Property Trustee is the
Holder of the Debentures, the Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its existence except in
connection with the (i) distribution of Debentures to holders of Preferred
Securities and Common Securities in liquidation of their interests in the Trust,
(ii) the redemption of all of the outstanding Preferred Securities and Common
Securities, or (iii) certain mergers, consolidations or amalgamation, each as
permitted by the Declaration.
If the Debentures are held by the Trust, the Company, as borrower,
hereby covenants to pay all debts and obligations (other than with respect to
the Preferred Securities and Common Securities of the Trust) and all costs and
expenses of the Trust (including, but not limited to, all costs and expenses
relating to the organization of the Trust, the fees and expenses of the trustees
of the Trust and all costs and expenses relating to the operation of the Trust)
and to pay any and all taxes, duties, assessments or governmental charges of
whatever nature (other than United States withholding taxes) imposed on the
Trust by the United States, or any other taxing authority, so that the net
<PAGE>
amounts received and retained by the Trust and the Property Trustee after paying
such debts, obligations, costs, expenses, taxes, duties, assessments, or other
governmental charges, will be equal to the amounts the Trust and the Property
Trustee would have received had no such debts, obligations, costs, expenses,
taxes, duties, assessments, or other governmental charges been incurred by or
imposed on the Trust. The foregoing obligations of the Company are for the
benefit of, and shall be enforceable by, any person to whom any such debts,
obligations, costs, expenses and taxes are owed (each, a "Creditor") whether or
not such Creditor has received notice thereof. Any such Creditor may enforce
such obligations of the Company directly against the Company, and the Company
irrevocably waives any right or remedy to require that any such Creditor take
any action against the Trust or any other person before proceeding against the
Company. The Company shall execute such additional agreements as may be
necessary or desirable to give full effect to the foregoing.
The Company hereby covenants that, so long as any Preferred Securities
and Common Securities of the Trust remain outstanding, if (i) there shall have
occurred any Event of Default under the Indenture with respect to the
Debentures, (ii) the Company shall be in default with respect to its payment of
any obligations under its Guarantee (as defined in the Declaration) with respect
to the Trust or (iii) the Company shall have given notice of its election of an
Extension Period as provided herein and shall not have rescinded such notice, or
such Extension Period or any extension thereof shall be continuing, then the
Company will not, and will not permit any Subsidiary to, (x) 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 or (y)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank on a parity
with or junior in interest to this Debenture or 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 on a parity with or junior in interest to
this Debenture (other than (a) dividends or distributions in common stock of the
Company, (b) payments under the Guarantee made by the Company in respect of the
Preferred Securities and Common Securities of the Trust, (c) any declaration of
a dividend in connection with the implementation of a shareholders' 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, and (d) purchases of common
stock related to the issuance of common stock or rights under any of the
Company's benefit plans).
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than 66-2/3% in aggregate
principal amount of each series of the Securities at the time Outstanding to be
affected (each series voting as a class), evidenced as provided in the
Indenture, to execute supplemental indentures adding any provisions to, or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
holders of the Securities of all such series; provided, however, that no such
supplemental indenture shall, among other things, (i) change the fixed maturity
of any Security, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon or reduce any premium payable on
redemption, or make the principal thereof, or premium, if any, or interest
thereon payable in any coin or currency other than that herein above provided,
or amend the Indenture to modify its provisions relating to the subordination of
each Security in a manner adverse to the holder thereof, without the consent of
the holder of each Security so affected, or (ii) change the place of payment on
<PAGE>
any Security, or impair the right to institute suit for payment on any Security,
or reduce the aforesaid percentage of Securities, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of each Security so affected. It is also provided in the Indenture
that, prior to any declaration accelerating the maturity of any series of
Securities, the holders of a majority in aggregate principal amount of the
Securities of such series Outstanding may on behalf of the holders of all the
Securities of such series waive any past default or Event of Default under the
Indenture with respect to such series and its consequences, except a default in
the payment of interest, if any, on or the principal of, or premium, if any, on
any of the Securities of such series. Any such consent or waiver by the holder
of this Debenture shall be conclusive and binding upon such holder and upon all
future holders and owners of this Debenture and any Debentures which may be
issued in exchange or substitution herefor, irrespective of whether or not any
notation thereof is made upon this Debenture or such other Debentures.
No reference herein to the Indenture and no provisions of this
Debenture or of the Indenture shall alter or impair the obligations of the
Company, which is absolute and unconditional, to pay the principal of this
Debenture at the place, at the time and in the coin or currency herein
prescribed.
The amount of interest payable for any period will be computed (i) for
any full 180-day semi-annual interest payment period, on the basis of a 360-day
year of twelve 30-day months, (ii) for any period shorter than a full 180-day
semi-annual interest payment period for which interest payments are computed, on
the basis of a 30-day month and (iii) for periods of less than a month, the
actual number of days elapsed per 30-day month. In the event that any date on
which interest is payable on this Debenture is not a Business Day (as defined in
the Indenture), then payment of the amount payable on such date will be made on
the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the original Interest Payment Date, subject to certain rights of
deferral described below.
The Company shall have the right at any time, on one or more occasions,
so long as an Event of Default has not occurred and is not continuing under the
Indenture, to extend any interest payment period on this Debenture for a period
(an "Extension Period") not to exceed twenty consecutive quarterly interest
payment periods; provided that the date on which such Extension Period ends must
be on an Interest Payment Date and must be no later than June 30, 2048 or any
date on which any Debentures are fixed for redemption, and, as a consequence,
the quarterly interest payment on the Debentures would be deferred (but would
continue to accrue with interest thereon compounded quarterly at the rate of
interest on the Debentures, except to the extent payment of such interest is
prohibited by law) during any such Extension Period. On the Interest Payment
Date at the end of each Extension Period, the Company shall pay all interest
then accrued and unpaid (compounded quarterly, at the rate of interest on the
Debentures, except to the extent payment of such interest is prohibited by law)
to the date of payment, to the persons in whose name the Debentures are
registered on the Regular Record Date immediately preceding the Interest Payment
Date at the end of such Extension Period. The Company shall give written notice
to the Regular Trustees (as defined in the Declaration), the Property Trustee
<PAGE>
and the Trustee of its election of such Extension Period one Business Day before
the earlier of (i) the next succeeding date on which distributions on the
Preferred Securities of the Trust are payable or (ii) the date the Trust is
required to give notice of the record date or the date such distributions are
payable to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Preferred Securities issued by the Trust, but
in any event at least one Business Day before such record date. During any
Extension Period, the Company may continue to extend the interest payment period
by extending the Extension Period, on one or more occasions by giving notice as
aforesaid; provided that such Extension Period, as extended, must end on an
Interest Payment Date and in no event shall the aggregate Extension Period, as
extended, exceed twenty consecutive quarterly interest payment periods or extend
beyond June 30, 2048 or any date on which any of the Debentures are fixed for
redemption. No interest shall be due and payable on the Debentures during an
Extension Period except at the end thereof.
Notwithstanding the provisions of Section 401(a)(B) of the Indenture,
the Company may satisfy and discharge the entire indebtedness on all the
Debentures as provided therein only when the Debentures are by their terms due
and payable within one year.
The Debentures are issuable in registered form without coupons in
denominations of $25 and any multiple of $25. At the option of the holders
thereof, either at the office or agency to be designated and maintained by the
Company for such purpose in the Borough of Manhattan, The City of New York,
pursuant to the provisions of the Indenture or at any of such other offices or
agencies as may be designated and maintained by the Company for such purpose
pursuant to the provisions of the Indenture, and in the manner and subject to
the limitations provided in the Indenture, but without the payment of any
service charge, except for any tax or other governmental charges imposed in
connection therewith, Debentures may be exchanged for an equal aggregate
principal amount of Debentures of like tenor and of other authorized
denominations.
The Company, the Trustee, and any agent of the Company or of the
Trustee may deem and treat the registered holder hereof as the absolute owner of
this Debenture (whether or not this Debenture shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment hereof, or on account hereof, and for all other
purposes, and neither the Company nor the Trustee nor any agent of the Company
or of the Trustee shall be affected by any notice to the contrary. All such
payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, effectually satisfy and discharge liability for
moneys payable on this Debenture.
No recourse for the payment of the principal of or the interest on this
Debenture, or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any indenture supplemental thereto or in any Debenture, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, officer or director as such, past,
present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, 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
<PAGE>
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Debenture is registrable in the Security
Register, upon surrender of this Debenture for registration of transfer at the
office or agency of the Company in any place where the principal of this
Debenture is payable, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Debentures of this series of like tenor
and of authorized denominations and for the same aggregate principal amount will
be issued to the designated transferee or transferees.
The Indenture and the Debentures shall be governed by and construed in
accordance with the laws of the State of New York.
All items used in this Debenture which are defined in the Indenture
shall have the meanings assigned to them in the Indenture or, if not defined
therein, in the Declaration.
--------------------------------------
The following abbreviations, when used in the inscription on the face
of the within Debenture, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by their entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT MIN ACT - ___________ Custodian __________ under Uniform Gifts to
(Cut) (Minor)
Minors Act__________________
(State)
Additional abbreviations may also be used though not in
the above list.
--------------------------------------
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please insert social security or other identifying number of Assignee)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Name and address of Assignee, including zip code, must be printed or
typewritten.)
the within Debenture, and all rights thereunder, hereby irrevocably constituting
and appointing
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ------------- to transfer the said Debenture on the books of the Company, with
full power of substitution in the premises.
Date:_____________
Signature:__________________________________
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Debenture in
every particular, without alteration or
enlargement or any change whatever.
Signature(s) Guaranteed:_____________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE GUARANTEE PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
Exhibit 4.03
AMENDED AND RESTATED DECLARATION OF TRUST
THIS AMENDED AND RESTATED DECLARATION OF TRUST
("Declaration"), dated as of April 20, 1999, by and among LEHMAN BROTHERS
HOLDINGS INC., a Delaware corporation, as Sponsor, and Karen M. Muller, Jennifer
Marre and Oliver Budde, as the initial Regular Trustees, The Chase Manhattan
Bank, as the initial Property Trustee and Chase Manhattan Bank Delaware, as the
initial Delaware Trustee, not in their individual capacities but solely as
Trustees, and the holders, from time to time, of undivided beneficial ownership
interests in the Trust to be issued pursuant to this Declaration.
WHEREAS, the Trustees and the Sponsor established Lehman
Brothers Holdings Capital Trust II (the "Trust"), a business trust under the
Business Trust Act (as defined, together with other capitalized terms, herein)
pursuant to a Declaration of Trust dated as of January 16, 1998, (the "Original
Declaration") and a Certificate of Trust (the "Certificate of Trust") filed with
the Secretary of State of the State of Delaware on January 16, 1998; and
WHEREAS, the sole purpose of the Trust shall be to issue and
sell certain securities representing undivided beneficial ownership interests in
the assets of the Trust, to invest the proceeds from such sales in the
Debentures issued by the Debenture Issuer and to engage in only those activities
necessary or incidental thereto; and
WHEREAS, the parties hereto, by this Declaration, amend and
restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees hereby declare that all assets contributed to the Trust be held in
trust for the benefit of the Holders, from time to time, of the Securities
representing undivided beneficial ownership interests in the assets of the Trust
issued hereunder, subject to the provisions of this Declaration.
ARTICLE 1
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions.
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined
in the preamble above have the meanings assigned to them in this Section 1.1;
<PAGE>
(b) a term defined anywhere in this Declaration has the
same meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections,
Recitals and Exhibits are to Articles and Sections of, or Recitals and Exhibits
to, this Declaration unless otherwise specified;
(e) unless otherwise defined in this Declaration, a term
defined in the Trust Indenture Act has the same meaning when used in this
Declaration; and
(f) a reference to the singular includes the plural and vice
versa and a reference to any masculine form of a term shall include the feminine
form of a term, as applicable.
(g) the following terms have the following meanings:
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Beneficial Owners" means, for Preferred Securities
represented by a Global Security, the Person who acquires an interest in the
Preferred Securities which is reflected on the records of the Depositary through
the Depositary Participants.
"Business Day" means any day, other than a Saturday or Sunday,
that is not a day on which banking institutions in the Borough of Manhattan, The
City of New York are authorized or required by law, regulation 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.
"Cedel" means Cedel, S.A.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Certificate of Trust" has the meaning specified in the
Recitals hereto.
"Closing Date" means the date on which the Preferred
Securities are issued and sold.
<PAGE>
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation. A reference to a specific
section of the Code refers not only to such specific section but also to any
corresponding provision of any federal tax statute enacted after the date of
this Declaration, as such specific section or corresponding provision is in
effect on the date of application of the provisions of this Declaration
containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Securities Holder" means Lehman Brothers Holdings
Inc., in its capacity as purchaser and holder of all of the Common Securities
issued by the Trust.
"Common Security" has the meaning specified in Section 7.1
"Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security, substantially in the
form of Exhibit B hereto.
"Corporate Trust Office" means the principal office of the
Property Trustee at which at any particular time its corporate trust business
shall be administered, which office at the date of execution of this Declaration
is located at 450 West 33rd Street, 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) the
Trust's Affiliates; and (b) any Holder.
"Debenture Issuer" means Lehman Brothers Holdings Inc., in its
capacity as issuer of the Debentures under the Indenture.
"Debenture Issuer Indemnified Person" means (a) any Regular
Trustee; (b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee or any Affiliate thereof; or (d) any officer, employee or agent
of the Trust or its Affiliates.
"Debenture Trustee" means The Chase Manhattan Bank, in its
capacity as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Debentures" means the series of debentures to be issued by
the Debenture Issuer under the Indenture and held by the Property Trustee.
"Delaware Trustee" has the meaning specified in Section 6.2.
"Depositary" means, with respect to Securities issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities.
"Depositary Participant" means a member of, or participant in,
the Depositary.
<PAGE>
"Direct Action" has the meaning specified in Section 3.8(e).
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 7.2.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 9.4(b).
"Fiscal Year" has the meaning specified in Section 10.1.
"Global Security" means a fully registered, global Preferred
Security Certificate.
"Guarantee" means the Guarantee Agreement, dated as of April
20, 1999, of the Sponsor in respect of the Securities.
"Holder" means any holder of Securities, as registered on the
books and records of the Trust; provided, however, that in determining whether
the Holders of the requisite liquidation amount of Preferred Securities have
voted on any matter provided for in this Declaration, then for the purpose of
such determination only (and not for any other purpose hereunder), if the
Preferred Securities remain in the form of one or more Global Securities and if
the Depositary which is the holder of such Global Securities has sent an omnibus
proxy to the Trust assigning voting rights to Depositary Participants to whose
accounts the Preferred Securities are credited on the record date, the term
"Holders" shall mean such Depositary Participants acting at the direction of the
Beneficial Owners.
"Indemnified Person" means a Debenture Issuer Indemnified
Person or a Fiduciary Indemnified Person.
"Indenture" means the Indenture, dated as of February 1, 1996,
between the Debenture Issuer and The Chase Manhattan Bank, formerly known as
Chemical Bank, as Trustee, and as amended and supplemented by the First
Supplemental Indenture thereto, dated as of February 1, 1996, and by any other
indenture supplemental thereto pursuant to which the Debentures are to be issued
to the Property Trustee.
"Indenture Event of Default" has the meaning given to the term
"Event of Default" in the Indenture.
"Investment Company" means an investment company as defined in
the Investment Company Act and the regulations promulgated thereunder.
<PAGE>
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Investment Company Event" means the receipt by the Trust of
an opinion of a nationally recognized independent counsel, to the effect that,
as a result of the occurrence of a change in law or regulation or a written
change in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (a "Change in 1940 Act
Law"), there is more than an insubstantial risk that the Trust is or will be
considered an "investment company" that is required to be registered under the
Investment Company Act, which Change in 1940 Act Law becomes effective on or
after the Closing Date.
"Legal Action" has the meaning specified in Section 3.6(g).
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities, voting together as a single class, or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant class.
"New York Stock Exchange" means the New York Stock Exchange,
Inc. or any successor thereto.
"Officers' Certificate" means, with respect to any Person, a
certificate signed on behalf of such Person by two Authorized Officers of such
Person. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer on behalf of such Person
in rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer on behalf of such Person 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 acting on behalf of such Person, such condition or covenant has been
complied with; provided, that the term "Officers' Certificate", when used with
<PAGE>
reference to Regular Trustees who are natural persons shall mean a certificate
signed by two of the Regular Trustees which otherwise satisfies the foregoing
requirements.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning specified in Section 7.2(c).
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Certificate" means a definitive
certificate in fully registered form representing a Preferred Security,
substantially in the form of Exhibit A.
"Property Account" has the meaning specified in Section 3.8(c)
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 6.3.
"Pro Rata" means 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.
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
"Redemption/Distribution Notice" has the meaning specified in
Section 7.4(a) hereto.
"Redemption Price" means the amount for which the Securities
will be redeemed, which amount will equal (i) the redemption price paid by the
Debenture Issuer to repay or redeem, in whole or in part, the Debentures held by
the Trust plus an amount equal to accumulated and unpaid Distributions on such
Securities through the date of their redemption or (ii) such lesser amount as
will be received by the Trust in respect of the Debentures so repaid or
redeemed.
"Regular Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any direct
or wholly owned subsidiary of the Sponsor or any Person that owns, directly or
indirectly, 100% of the outstanding voting securities of the Sponsor.
<PAGE>
"Responsible Officer" means, with respect to the Property
Trustee, any officer with direct responsibility for the administration of this
Declaration and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act
or any successor rule thereunder.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Special Event" means a Tax Event or an Investment Company
Event.
"Sponsor" means Lehman Brothers Holdings Inc., a Delaware
corporation, or any successor entity in a merger, consolidation, amalgamation or
replacement by or conveyance, transfer or lease of its properties substantially
as an entirety, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning specified in
Section 6.6(b).
"Successor Entity" has the meaning specified in Section
3.15(b)(i).
"Successor Property Trustee" has the meaning specified in
Section 6.6(b).
"Successor Security" has the meaning specified in Section
3.15(b)(i)b.
"Super Majority" has the meaning specified in Section
2.6(a)(ii).
"Tax Event" means the receipt by the Trust of an opinion of
independent tax counsel experienced in such matters, to the effect that, as a
result of (a) any amendment to, change in or announced proposed change in the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or (b) any official
administrative pronouncement, action or judicial decision interpreting or
applying such laws or regulations, which such amendment or change becomes
effective or proposed change, pronouncement, action or decision is announced on
or after April 15, 1999, 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 the
United States federal income tax with respect to income received or accrued on
the Debentures, (ii) interest payable by the Debenture Issuer on the Debentures
is not, or within 90 days of the date of such opinion, will not be, deductible
by the Debenture Issuer, in whole or in part, by the Debenture Issuer 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.
<PAGE>
"10% in Liquidation Amount" means, except as provided in the
terms of the Preferred Securities or by the Trust Indenture Act, Holder(s) of
outstanding Securities, voting together as a single class, or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, who are the record
owners of 10% or more of the aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trust" has the meaning specified in the Recitals hereto.
"Trust Enforcement Event" in respect of the Securities means
an Indenture Event of Default has occurred and is continuing in respect of the
Debentures.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"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 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.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which
is a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration conflicts with the duties imposed by Sections 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control.
<PAGE>
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the Trust's classification as a grantor trust for
United States federal income tax purposes and shall not affect the nature of the
Securities as equity securities representing undivided beneficial ownership
interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide the Property Trustee (i), except while the Preferred
Securities are represented by one or more Global Securities, at least five
Business Days prior to the date for payment of Distributions, a list, in such
form as the Property Trustee may reasonably require, of the names and addresses
of the Holders of the Securities ("List of Holders") as of the record date
relating to the payment of such Distributions and (ii) at any other time, within
30 days of receipt by the Trust of a written request from the Property Trustee
for a List of Holders as of a date no more than 15 days before such List of
Holders is given to the Property Trustee; provided that neither the Sponsor nor
the Regular Trustees on behalf of the Trust shall be obligated to provide such
List of Holders at any time the List of Holders does not differ from the most
recent List of Holders given to the Property Trustee by the Sponsor and the
Regular Trustees on behalf of the Trust. The Property Trustee shall preserve, in
as current a form as is reasonably practicable, all information contained in
Lists of Holders given to it or which it receives in the capacity as 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, and shall be entitled to the benefits of, Sections 311(a), 311(b) and
312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year (commencing with the
year of the first anniversary of the issuance of the Preferred Securities), the
Property Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Property Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
<PAGE>
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Trust Enforcement Events; Waiver.
(a) The Holders of a Majority in Liquidation Amount of the
Preferred Securities may, by vote or written consent, on behalf of the Holders
of all of the Preferred Securities, waive any past Trust Enforcement Event in
respect of the Preferred Securities and its consequences, provided that, if the
underlying Indenture Event of Default:
(i) is not waivable under the Indenture, the Trust
Enforcement Event under the Declaration shall also not
be waivable; or
(ii) requires the consent or vote of the Holders of greater
than a majority in principal amount of the Debentures
(a "Super Majority") to be waived under the Indenture,
the related Trust Enforcement Event under the
Declaration may only be waived by the vote or written
consent of the Holders of at least the proportion in
liquidation amount of the Preferred Securities that the
relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.
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 Trust Enforcement
Event with respect to the Preferred Securities arising therefrom shall be deemed
to have been cured, for every purpose of this Declaration and the Preferred
Securities, but no such waiver shall extend to any subsequent or other Trust
Enforcement Event with respect to the Preferred Securities or impair any right
consequent thereon. Any waiver by the Holders of the Preferred Securities of a
Trust Enforcement Event with respect to the Preferred Securities shall also be
deemed to constitute a waiver by the Holders of the Common Securities of any
such Trust Enforcement Event with respect to the Common Securities for all
purposes of this Declaration without any further act, vote, or consent of the
Holders of the Common Securities.
(b) The Holders of a Majority in Liquidation Amount of the
Common Securities may, by vote or written consent, on behalf of the Holders of
all of the Common Securities, waive any past Trust Enforcement Event in respect
of the Common Securities and its consequences, provided that, if the underlying
Indenture Event of Default:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have
waived such Trust Enforcement Event under the
Declaration as provided below in this Section 2.6(b),
the Trust Enforcement Event under the Declaration shall
also not be waivable; or
<PAGE>
(ii) requires the consent or vote of a Super Majority to be
waived under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such
Trust Enforcement Event under the Declaration as
provided below in this Section 2.6(b), the Trust
Enforcement Event under the Declaration may only be
waived by the vote or written consent of the Holders of
at least the proportion in liquidation amount of the
Common Securities that the relevant Super Majority
represents of the aggregate principal amount of the
Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any Trust Enforcement Event and all Trust Enforcement Events with respect to the
Common Securities and the consequences thereof until all Trust Enforcement
Events with respect to the Preferred Securities have been cured, waived or
otherwise eliminated, and until such Trust Enforcement Events with respect to
the Preferred Securities 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 Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. 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 cure, waiver or other elimination, any such default shall cease to
exist and any Trust Enforcement Event 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 Trust
Enforcement Event with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Indenture Event of Default by the Property
Trustee at the direction of the Holders of the Preferred Securities constitutes
a waiver of the corresponding Trust Enforcement Event with respect to the
Preferred Securities 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 Trust Enforcement Event; Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of a Trust Enforcement Event, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all defaults with respect
to the Securities actually known to a Responsible Officer of the 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
<PAGE>
defined to be an Indenture Event of Default, not including any periods of grace
provided for therein and irrespective of the giving of any notice provided
therein); provided that, except for a default in the payment of principal of (or
premium, if any) or interest on any of the Debentures, the Property Trustee
shall be protected in withholding such notice if and so long as a Responsible
Officer of the Property Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 501(1) and 501(2) of the
Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice or of which a Responsible
Officer of the Property Trustee charged with the
administration of this Declaration shall have actual
knowledge.
ARTICLE 3
ORGANIZATION
SECTION 3.1 Name and Organization.
The Trust hereby continued is named "Lehman Brothers Holdings
Capital Trust II" as such name may be modified from time to time by the Regular
Trustees following written notice to the Holders of Securities, the Property
Trustee and the Delaware Trustee. The Trust's activities may be conducted under
the name of the Trust or any other name deemed advisable by the Regular
Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o Lehman
Brothers Holdings Inc., 3 World Financial Center, New York, New York 10285. On
10 Business Days' written notice to the Holders of Securities, the Property
Trustee and the Delaware Trustee, the Regular Trustees may designate another
principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the gross proceeds from such sale to acquire
the Debentures, and (b) except as otherwise limited herein, to engage in only
those other activities necessary or incidental thereto. The Trust shall not
borrow money, issue debt or reinvest proceeds derived from investments, pledge
any of its assets or otherwise undertake (or permit to be undertaken) any
activity that would cause the Trust not to be classified as a grantor trust for
United States federal income tax purposes.
<PAGE>
By the acceptance of this Trust, none of the Trustees, the
Sponsor, the Holders of the Preferred Securities or Common Securities or the
Preferred Securities Beneficial Owners will take any position for United States
federal income tax purposes which is contrary to the classification of the Trust
as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Regular Trustees shall have
exclusive authority to carry out the purposes of the Trust. An action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and serve to bind the Trust and an action taken by the Property Trustee 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.
(a) Except as expressly set forth in this Declaration and
except if a meeting of the Regular Trustees is called with respect to any matter
over which the Regular Trustees have power to act, any power of the Regular
Trustees may be exercised by, or with the consent of, any one such Regular
Trustee.
(b) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act or applicable law, any
Regular Trustee is authorized to execute on behalf of the Trust any documents
which the Regular Trustees have the power and authority to cause the Trust to
execute pursuant to Section 3.6(b), provided, that the registration statements
referred to in Section 3.6(b)(i), including any amendments thereto, shall be
signed by or on behalf of a majority of the Regular Trustees; and
(c) a Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing any documents which the Regular
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.6.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the
Debentures and the Property Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial ownership interest in the assets
of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to establish the terms and form of the Preferred
Securities and the Common Securities in the manner specified in Section 7.1 and
issue and sell the Preferred Securities and the Common Securities in accordance
with this Declaration; provided, however, that the Trust may issue no more than
one series of Preferred Securities and no more than one series of Common
Securities, and, provided further, that there shall be no interests in the Trust
other than the Securities, and the issuance of Securities shall be limited to a
one-time, simultaneous issuance of both Preferred Securities and Common
Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange or any other
national stock exchange or the NASDAQ Stock Market for
listing of any Preferred Securities, the Guarantee and
the Debentures;
(ii) execute and file with the Commission one or more
registration statements on the applicable forms
prepared by the Sponsor, including any amendments
thereto, pertaining to the Preferred Securities, the
Guarantee and the Debentures;
(iii)execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be
necessary, in order to qualify or register all or part
of the Preferred Securities in any State in which the
Sponsor has determined to qualify or register such
Preferred Securities for sale; and
(iv) negotiate the terms of and execute and enter into an
underwriting agreement and other related agreements
providing for the sale of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of
the Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debentures to be held of record
in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders of the Common Securities;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event; provided that the Regular
Trustees shall consult with the Sponsor and the Property Trustee before taking
or refraining from taking any action in relation to any such Special Event;
<PAGE>
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including and with
respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders, of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be
required of the Regular Trustees pursuant to the terms of this Declaration and
the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors, advisors
and consultants to conduct only those services that the Regular Trustees have
authority to conduct directly, and to and pay reasonable compensation for such
services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of
the Trust Indenture Act to the Property Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
registrar and transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Debenture Issuer of its election to
defer payments of interest on the Debentures by extending the interest payment
period under the Debentures as authorized by the Indenture;
(n) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the laws
of the State of Delaware and of each other jurisdiction in which such existence
is necessary to protect the limited liability of the Holders of the Preferred
Securities and the Holders of the Common Securities or to enable the Trust to
effect the purposes for which the Trust was created;
(o) to take any action, not inconsistent with applicable law,
that the Regular Trustees determine in their discretion to be necessary or
desirable in carrying out the purposes and functions of the Trust as set out in
Section 3.3 or the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
<PAGE>
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment
Company Act;
(ii) causing the Trust to be classified as a grantor trust
for United States federal income tax purposes; and
(iii)cooperating with the Debenture Issuer to ensure that
the Debentures will be treated as indebtedness of the
Debenture Issuer for United States federal income tax
purposes.
<PAGE>
(p) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Regular Trustees, on behalf of
the Trust; and
(q) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing.
The Regular Trustees shall exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Regular Trustees shall have no
power to, and shall not, take any action that is inconsistent with the purposes
and functions of the Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees.
(a) The Trust shall not, and none of the Trustees (including
the Property Trustee) shall cause the Trust to, engage in any activity other
than as required or authorized by this Declaration. In particular, the Trust
shall not and none of the Trustees (including the Property Trustee) shall cause
the Trust to:
(i) invest any proceeds received by the Trust from holding
the Debentures, but shall distribute all such proceeds
to Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
<PAGE>
(iv) make any loans or incur any indebtedness;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets;
(vi) possess any power or otherwise act in such a way as to
vary the terms of the Securities in any way whatsoever
(except to the extent expressly authorized in this
Declaration or by the terms of the Securities);
(vii)issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust
other than the Securities;
(viii) other than as provided in this Declaration or by the
terms of the Securities, (A) direct the time, method
and place of exercising any trust or power conferred
upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable
under the Indenture, (C) exercise any right to rescind
or annul any declaration that the principal of all the
Debentures shall be due and payable, or (D) consent to
any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be
required unless the Trust shall have received an
opinion of counsel to the effect that such modification
will not cause more than an insubstantial risk that the
Trust will be deemed an Investment Company required to
be registered under the Investment Company Act, or the
Trust will not be classified as a grantor trust for
United States federal income tax purposes;
(ix) take any action inconsistent with the status of the
Trust as a grantor trust for United States federal
income tax purposes; or
(x) revoke any action previously authorized or approved by
vote of the Holders of the Preferred Securities.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Trust and the Holders of the Securities. 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
6.6. Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
<PAGE>
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Property Account") in the
name of and under the exclusive control of the Property
Trustee on behalf of the Holders of the Securities and,
upon the receipt of payments of funds made in respect
of the Debentures held by the Property Trustee, deposit
such funds into the Property Account and make payments
to the Holders of the Preferred Securities and Holders
of the Common Securities from the Property Account in
accordance with Section 7.2. Funds in the Property
Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Account
shall be an account that is maintained with a banking
institution the rating on whose long-term unsecured
indebtedness is at least equal to the rating assigned
to the Preferred Securities by a "nationally recognized
statistical rating organization", within the meaning of
Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of
the Preferred Securities and the Common Securities to
the extent the Debentures are redeemed or mature; and
(iii)upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the
Securities, engage in such ministerial activities as so
directed and as shall be necessary or appropriate to
effect the distribution of the Debentures to Holders of
Securities upon the occurrence of a Special Event.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant to
the terms of this Declaration and the Securities.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with a Trust Enforcement Event 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; provided however, that if a Trust Enforcement Event has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest, principal or other required payments on the Debentures on the
date such interest, principal or other required payments are otherwise payable
(or in the case of redemption, on the redemption date), then a Holder of
Preferred Securities may directly institute a proceeding against the Debenture
Issuer for enforcement of payment to such Holder of the principal of or interest
<PAGE>
on Debentures having a principal amount equal to the aggregate liquidation
amount of the Preferred Securities of such Holder (a "Direct Action") on or
after the respective due date specified in the Debentures.
(f) The Property Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation 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
6.6.
(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 a Trust Enforcement Event actually known to a
Responsible Officer of the Property Trustee occurs and is continuing, the
Property Trustee shall, for the benefit of Holders of the Securities, enforce
its rights as holder of the Debentures subject to the rights of the Holders
pursuant to the terms of such Securities.
(h) The Property Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to all Securities and
any such Paying Agent shall comply with Section 317(b) of the Trust Indenture
Act. Any Paying Agent may be removed by the Property Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Property Trustee shall exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Property Trustee shall have no
power to, and shall not, take any action that is inconsistent with the purposes
and functions of the Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the
Property Trustee.
(a) The Property Trustee, before the occurrence of any Trust
Enforcement Event and after the curing of all Trust Enforcement Events that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Declaration and no implied covenants shall be read into this
Declaration against the Property Trustee. In case a Trust Enforcement Event has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Property Trustee has actual knowledge, the Property
Trustee shall exercise such of the rights and powers vested in it by this
Declaration, and 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.
<PAGE>
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of a Trust Enforcement Event
and after the curing or waiving of all such Trust
Enforcement Events that may have occurred:
a the duties and obligations of the
Property Trustee shall be determined
solely by the express provisions of
this Declaration and the Property
Trustee shall not be liable except
for the performance of such duties
and obligations as are specifically
set forth in this Declaration, and
no implied covenants or obligations
shall be read into this Declaration
against the Property Trustee; and
b in the absence of bad faith on the
part of the Property Trustee, the
Property Trustee may conclusively
rely, as to the truth of the
statements and the correctness of
the opinions expressed therein, upon
any certificates or opinions
furnished to the Property Trustee
and conforming to the requirements
of this Declaration; but in the case
of any such certificates or opinions
that by any provision 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
without negligence, in good faith in accordance with
the direction of the Holders of not less than a
Majority in Liquidation Amount of the Securities
relating to the time, method and place of conducting
any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of
any of its rights or powers, if it shall have
<PAGE>
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 Account shall be to deal
with such property in a similar manner as the Property
Trustee deals with similar property for its own
account, subject to the protections and limitations on
liability afforded to the Property Trustee under this
Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability
for or with respect to the value, genuineness,
existence or sufficiency of the Debentures or the
payment of any taxes or assessments levied thereon or
in connection therewith;
(vii)the Property Trustee shall not be liable for any
interest on any money received by it except as it may
otherwise agree with the Sponsor. Money held by the
Property Trustee need not be segregated from other
funds held by it except in relation to the Property
Account maintained by the Property Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise
required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or
the Sponsor with their respective duties under this
Declaration, nor shall the Property Trustee be liable
for any default or misconduct of the Regular Trustees
or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting
upon any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties;
<PAGE>
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate;
(iii)whenever in the administration of this Declaration,
the 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 Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or
the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument
(including any financing or continuation statement or
any filing under tax or securities laws) or any
rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its
choice or other experts and the advice or opinion of
such counsel and experts with respect to legal matters
or advice within the scope of such experts' area of
expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance
with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and
may include any of its employees. The Property Trustee
shall have the right at any time to seek instructions
concerning the administration of this Declaration from
any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Declaration at the request or direction of any
Holder, unless such Holder shall have provided to the
Property Trustee security and indemnity, reasonably
satisfactory to the Property Trustee, against the
costs, expenses (including attorneys' fees and expenses
and the expenses of the Property Trustee's agents,
nominees or custodians) and liabilities that might be
incurred by it in complying with such request or
direction, including such reasonable advances as may be
requested by the Property Trustee; provided that,
nothing contained in this Section 3.10(a) shall be
taken to relieve the Property Trustee, upon the
occurrence of a Trust Enforcement Event, of its
obligation to exercise the rights and powers vested in
it by this Declaration;
(vii)the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument,
<PAGE>
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the
Property Trustee, in its discretion, may make such
further inquiry or investigation into such facts or
matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents, custodians, nominees
or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care
by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Property Trustee
or its agents alone shall be sufficient and effective
to perform any such action and no third party shall be
required to inquire as to the authority of the Property
Trustee to so act or as to its compliance with any of
the terms and provisions of this Declaration, both of
which shall be conclusively evidenced by the Property
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the
Property Trustee (i) may request instructions from the
Holders of the Securities which instructions may only
be given by the Holders of the same proportion in
liquidation amount of the Securities as would be
entitled to direct the Property Trustee under the terms
of the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or
right or taking such other action until such
instructions are received, and (iii) shall be protected
in conclusively relying on or acting in or accordance
with such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under
any obligation to take any action that is discretionary
under the provisions of this Declaration;
(xii)the Property Trustee shall not be liable for any
action taken, suffered or omitted to be taken by it
without negligence, in good faith and reasonably
believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this
Declaration;
<PAGE>
(xiii) without prejudice to any other rights available to
the Property Trustee under applicable law, when the
Property Trustee incurs expenses or renders services in
connection with a bankruptcy , such expenses (including
the fees and expenses of its counsel) and the
compensation for such services are intended to
constitute expenses of administration under any
bankruptcy law or law relating to creditors rights
generally;
(xiv)the Property Trustee shall not be charged with
knowledge of a Trust Enforcement Event unless a
Responsible Officer of the Property Trustee obtains
actual knowledge of such event or the Property Trustee
receives written notice of such event from Holders
holding more than a Majority in Liquidation Amount of
the Preferred Securities; and
(xv) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of such
Securities, and the signature of the Property Trustee
or one of its agents shall by itself be sufficient and
effective to perform any such action and no third party
shall be required to inquire as to the authority of the
Property Trustee to so act or as to its compliance with
any of the terms and provisions of this Declaration,
both of which shall be conclusively evidenced by the
Property Trustee's or its agent's taking such action.
(b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Section 6.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Property Trustee described in
this Declaration. Except as set forth in Section 6.2, the Delaware Trustee shall
be a Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Business Trust Act. In the event the Delaware Trustee shall
at any time be required to take any action or perform any duty hereunder with
respect to the Trust, the Delaware Trustee shall be entitled to all of the same
rights as the Property Trustee listed in Section 3.9(b) and Section 3.10.
<PAGE>
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, any Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statements referred to in Section 3.6(b)(ii),
including any amendments thereto, shall be signed by or on behalf of a majority
of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration, the Securities, the Debentures or the Indenture.
SECTION 3.14 Duration of Trust.
The Trust shall exist until terminated pursuant to the
provisions of Article 8 hereof.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, at the request of the Sponsor and with the
consent of the Regular Trustees or, if there are more than two, a majority of
the Regular Trustees and without the consent of the Holders of the Securities,
the Delaware Trustee or the Property Trustee, consolidate, amalgamate, merge
with or into, or be replaced by or convey, transfer or lease its properties
substantially as an entirety to a trust organized as such under the laws of any
State; provided, that:
(i) if the Trust is not the successor, 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 Preferred
Securities other securities having
substantially the same terms as the
Preferred Securities (the "Successor
Securities") so long as the
Successor Securities rank the same
as the Preferred Securities rank in
priority with respect to
Distributions and payments upon
liquidation, redemption and
otherwise;
<PAGE>
(ii) the Debenture Issuer expressly appoints a trustee of
such Successor Entity that possesses the same powers
and duties as the Property Trustee as the holder of the
Debentures;
(iii)the Preferred Securities or any Successor Securities
are listed, or any Successor Securities will be listed
upon notification of issuance, on any national
securities exchange or with any other or organization
on which the Preferred Securities are then listed or
quoted;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the
Preferred Securities (including any Successor
Securities) to be downgraded by any nationally
recognized statistical rating organization;
(v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect
the rights, preferences and privileges of the Holders
of the Preferred Securities (including any Successor
Securities) in any material respect;
(vi) such Successor Entity has a purpose identical to that
of the Trust;
(vii)prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease the Sponsor
has received an opinion of independent counsel to the
Trust experienced in such matters to the effect that:
a such merger, consolidation,
amalgamation, replacement,
conveyance, transfer or lease does
not adversely affect the rights,
preferences and privileges of the
Holders of the Preferred Securities
(including any Successor Securities)
in any material respect;
b following such merger,
consolidation, amalgamation,
replacement, conveyance, transfer or
lease neither the Trust nor the
Successor Entity will be required to
register as an Investment Company;
and
c following such merger,
consolidation, amalgamation or
replacement, the Trust (or the
Successor Entity) will continue to
be classified as a grantor trust for
United States federal income tax
purposes;
(viii) the Sponsor or any permitted successor or assignee
owns all of the Common Securities and guarantees the
obligations of such Successor Entity under the
<PAGE>
Successor Securities at least to the extent provided by
the Securities Guarantee; and
(ix) such Successor Entity expressly assumes all of the
obligations of the Trust with respect to the Trustees.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in aggregate liquidation amount of
the Securities, consolidate, amalgamate, merge with or into, or be replaced by
or convey, transfer or lease its properties and assets substantially as an
entirety to, any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it, if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Trust or Successor Entity to be classified as other than a grantor trust for
United States federal income tax purposes and each Holder of the Securities not
to be treated as owning an undivided interest in the Debentures.
SECTION 3.16 Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other similar judicial proceeding relative to the Trust or any other obligor
upon the Securities or the property of the Trust or of such other obligor or
their creditors, the Property Trustee (irrespective of whether any Distributions
on the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Securities (or, if the
Securities are original issue discount Securities, such portion of the
liquidation amount as may be specified in the terms of such Securities) and to
file such other papers or documents as may be necessary or advisable in order to
have the claims of the Property Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
<PAGE>
Nothing herein contained shall be deemed to authorize the
Property Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement adjustment or compensation
affecting the Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
ARTICLE 4
SPONSOR
SECTION 4.1 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by the Trust with the Commission one
or more registration statements on the applicable forms, including any
amendments thereto, pertaining to the Preferred Securities, the Guarantee and
the Debentures;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred Securities
and to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for execution
and filing any documents to be executed and filed by the Trust, as the Sponsor
deems necessary or advisable in order to comply with the applicable laws of any
such States;
(c) to prepare for filing by the Trust an application to the
New York Stock Exchange or any other national stock exchange or the NASDAQ Stock
Market for listing upon notice of issuance of any Preferred Securities, the
Guarantee and the Debentures; and
(d) to negotiate the terms of an underwriting agreement and
other related agreements providing for the sale of the Preferred Securities.
SECTION 4.2 Indemnification and Fees and Expenses of the
Trustees.
The Sponsor, in its capacity as Debenture Issuer, agrees to
indemnify the Property Trustee and the Delaware Trustee for, and to hold each of
them harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Property Trustee or the Delaware
Trustee, as the case may be, arising out of or in connection with the acceptance
or administration of the trust or trusts hereunder, including the costs and
expenses of defending either of them against any claim or liability in
connection with the exercise or performance of any of their respective powers or
duties hereunder; the provisions of this Section 4.2 shall survive the
resignation or removal of the Delaware Trustee or the Property Trustee or the
termination of this Declaration.
<PAGE>
ARTICLE 5
TRUST COMMON SECURITIES HOLDER
SECTION 5.1 Debenture Issuer's Purchase of Common Securities.
On the Closing Date, the Debenture Issuer will purchase all of
the Common Securities issued by the Trust, for an amount at least equal to 3% of
the capital of the Trust, at the same time as the Preferred Securities are sold.
The aggregate stated liquidation amount of Common Securities
outstanding at any time shall not be less than 3% of the capital of the Trust.
SECTION 5.2 Covenants of the Common Securities Holder.
For so long as the Preferred Securities remain outstanding,
the Common Securities Holder will covenant (i) to maintain, directly or
indirectly, 100% ownership of the Common Securities, (ii) to cause the Trust to
remain a statutory business trust and not to voluntarily dissolve, wind up,
liquidate or be terminated, except as permitted by this Declaration, (iii) to
use its commercially reasonable efforts to ensure that the Trust will not be an
investment company for purposes of the Investment Company Act, and (iv) to take
no action which would be reasonably likely to cause the Trust to be classified
as an association or a publicly traded partnership taxable as a corporation for
United States federal income tax purposes.
ARTICLE 6
TRUSTEES
SECTION 6.1 Number of Trustees.
The number of Trustees initially shall be five, and:
(a) at any time before the issuance of any Securities, the
Sponsor may, 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 or by written consent in lieu of such
meeting; provided that the number of Trustees shall be at least three; and
provided further that (1) the Delaware Trustee, in the case of a natural person,
shall be a person who is a resident of the State of Delaware or that, if not a
natural person, is an entity which has its principal place of business in the
State of Delaware and otherwise meets the requirements of applicable law; (2) at
least one Regular Trustee is an employee or officer of, or is affiliated with,
the Sponsor; and (3) one Trustee shall be the Property Trustee for so long as
<PAGE>
this Declaration is required to qualify as an indenture under the Trust
Indenture Act, and such Trustee may also serve as Delaware Trustee if it meets
the applicable requirements.
SECTION 6.2 Delaware Trustee; Eligibility.
If required by the Business Trust Act, one Trustee (which may
be the Property Trustee) (the "Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
SECTION 6.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (which may be the
Delaware Trustee) which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a
corporation or other Person permitted by the Commission
to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise
corporate trust owners, 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 6.3(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 6.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 6.6(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Common Securities (as
<PAGE>
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 Guarantee shall be deemed to be specifically described
in this Declaration for purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
SECTION 6.4 Qualifications of Regular Trustees and Delaware
Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.
SECTION 6.5 Initial Regular Trustees.
The initial Regular Trustees shall be:
Karen M. Muller, Jennifer Marre and Oliver Budde, the business
address of all of whom is c/o Lehman Brothers Holdings Inc., 3 World Financial
Center, New York, New York 10285.
SECTION 6.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 6.6(b), Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor;
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in Liquidation Amount of the
Common Securities voting as a class at a meeting of the
Holders of the Common Securities; and
(iii)after the issuance of the Preferred Securities and the
occurrence of an Indenture Event of Default, by vote of
the Holders of a majority in Liquidation Amount of the
Preferred Securities.
(b) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 6.6(a) until a successor Trustee possessing
the qualifications to act as Property Trustee under Section 6.3(a) (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Regular Trustees and the Sponsor. The Trustee that acts as Delaware Trustee
<PAGE>
shall not be removed in accordance with Section 6.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 6.2 and
6.4 (a "Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
or its successor shall have been appointed, until his death or its dissolution
or until his or its removal or resignation. Any Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
a until a Successor Property Trustee
has been appointed and has accepted
such appointment by instrument
executed by such Successor Property
Trustee and delivered to the Trust,
the Sponsor and the resigning
Property Trustee; or
b until the assets of the Trust have
been completely liquidated and the
proceeds thereof distributed to the
holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective untila Successor
Delaware Trustee has been appointed and has accepted
such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust,
the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor Property
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 6.6.
(e) If no Successor Property Trustee or Successor Delaware
Trustee, as the case may be, shall have been appointed and accepted appointment
as provided in this Section 6.6 within 60 days after delivery to the Sponsor and
the Trust of an instrument of resignation or removal, the resigning or removed
Property Trustee or Delaware Trustee, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property Trustee or
Successor Delaware Trustee, as applicable. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may be.
<PAGE>
(f) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 6.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 6.1, or if the number of
Trustees is increased pursuant to Section 6.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees or,
if there are more than two, a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 6.6.
SECTION 6.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 6.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 6.9 Meetings.
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Notice of any in-person
meetings of the Regular Trustees shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 48 hours before such meeting. Notice of any telephonic meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 24
hours before a meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in person
or by telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for the
express purpose of objecting to the transaction of any activity on the ground
that the meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the Regular Trustees may be taken
at a meeting by vote of a majority of the Regular Trustees present (whether in
person or by telephone) and eligible to vote with respect to such matter,
provided that a Quorum is present, or without a meeting by the unanimous written
consent of the Regular Trustees. In the event there is only one Regular Trustee,
any and all action of such Regular Trustee shall be evidenced by a written
consent of such Regular Trustee.
<PAGE>
SECTION 6.10 Delegation of Power.
(a Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any natural person over the age of 21 his, her
or its 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.
(b The Regular Trustees shall have power to delegate from time
to time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 6.11 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Property Trustee, the Delaware
Trustee or any Regular Trustee that is not a natural person may be merged or
converted or with such Trustee may be consolidated, or any 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.
ARTICLE 7
TERMS OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a The Regular Trustees shall on behalf of the Trust issue one
class of preferred securities representing undivided beneficial ownership
interests in the assets of the Trust and one class of common securities
representing undivided beneficial ownership interests in the assets of the
Trust.
(i Preferred Securities. The Preferred Securities of the
Trust have an aggregate liquidation amount with respect
to the assets of the Trust of up to $397,000,000 and a
liquidation amount with respect to the assets of the
Trust of $25 per Preferred Security. The Preferred
Securities are hereby designated for identification
purposes only as 7.875% Preferred Securities, Series J
(the "Preferred Securities"). The Preferred Security
Certificates evidencing the Preferred Securities shall
be substantially in the form of Exhibit A to this
<PAGE>
Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of
any stock exchange on which the Preferred Securities
are listed or quoted.
(ii Common Securities. The Common Securities of the Trust
have an aggregate liquidation amount with respect to
the assets of the Trust of up to $12,278,375 and a
liquidation amount with respect to the assets of the
Trust of $25 per Common Security. The Common Securities
are hereby designated for identification purposes only
as 7.875% Common Securities, Series J (the "Common
Securities" and, together with the Preferred
Securities, the "Securities"). The Common Security
Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit B to this
Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary
usage, custom or practice.
(b Payment of Distributions on, and payment of the Redemption
Price upon a redemption of, the Preferred Securities and the Common Securities,
as applicable, shall be made Pro Rata based on the liquidation amount of such
Preferred Securities and Common Securities; provided, however, that if on any
date on which amounts payable on distribution or redemption an Indenture Event
of Default shall have occurred and be continuing, no payment of any Distribution
on, or Redemption Price of, any of the Common Securities, and no other payment
on account of the redemption, liquidation or other acquisition of such Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all of the outstanding Preferred Securities for all
Distribution periods terminating on or prior thereto, or, in the case of amounts
payable on redemption, the full amount of the Redemption Price for all of the
outstanding Preferred Securities then called for redemption, 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 the
Redemption Price of, the Preferred Securities then due and payable. The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Preferred Securities and the Common Securities.
(c The Certificates shall be signed on behalf of the Trust by
a Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case a Regular Trustee of the
Trust who shall have signed any of the Certificates shall cease to be such
Regular Trustee before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the person who
signed such Certificates had not ceased to be such Regular Trustee; and any
Certificate may be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Certificate, shall be the Regular Trustees of
the Trust, although at the date of the execution and delivery of the Declaration
any such person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation of
any stock exchange on which Securities may be listed, or to conform to usage.
<PAGE>
A Certificate representing Preferred Securities shall not be
valid until authenticated by the manual signature of an authorized officer of
the Property Trustee. Such signature shall be conclusive evidence that such
Certificate has been authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular
Trustee, the Property Trustee shall authenticate the Certificates representing
Preferred Securities for original issue. The aggregate number of Preferred
Securities outstanding at any time shall not exceed the liquidation amount set
forth in Section 7.1(a)(i).
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Certificates. An authenticating agent
may authenticate Certificates whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as the
Property Trustee to deal with the Sponsor or an Affiliate of the Sponsor.
(d The consideration received by the Trust for the issuance of
the Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(e Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable beneficial ownership interests in the assets of
the Trust.
(f Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration and the terms of the Securities, the
Guarantee, the Indenture and the Debentures.
(g The holders of the Securities shall have no preemptive
rights.
<PAGE>
SECTION 7.2 Distributions.
(a Holders of Securities shall be entitled to receive
cumulative cash Distributions at the rate per annum of 7.875% of the stated
liquidation amount of $25 per Security. The amount of Distributions payable for
any period shall be computed on the basis of a 360-day year of twelve 30-day
months. The amount of distributions payable for any period shorter than a full
quarterly distribution period shall be computed on the basis of a 30-day month
and for periods of less than a month, the actual number of days elapsed per
30-day month. Subject to Section 7.1(b), Distributions shall be made on the
Preferred Securities and the Common Securities on a Pro Rata basis.
Distributions on the Securities shall, from the date of original issue, accrue
and be cumulative and shall be payable quarterly, in arrears, on each March 31,
June 30, September 30 and December 31, commencing June 30, 1999, when, as and if
available for payment, by the Property Trustee, except as otherwise described
below. Distributions are payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent that
the Trust has funds available for the payment of such Distributions in the
Property Account.
(b Distributions not paid on the scheduled payment date will
accumulate and compound quarterly at the rate of 7.875% per annum ("Compounded
Distributions"). "Distributions" shall mean ordinary cumulative distributions
together with any Compounded Distributions.
(c If and to the extent that the Debenture Issuer makes a
payment of interest, premium and/or principal on the Debentures held by the
Property Trustee (the amount of any such payment being a "Payment Amount"), the
Property Trustee shall and is directed, to the extent funds are available for
that purpose, to make a Pro Rata distribution of the Payment Amount to Holders,
subject to Section 7.1(b).
(d Distributions on the Securities shall be payable to the
Holders thereof as they appear on the register of the Trust as of the close of
business on the relevant record dates. While the Preferred Securities are
represented by one or more Global Securities, the relevant record dates shall be
the close of business on the Business Day next preceding such Distribution
payment date, unless a different regular record date is established or provided
for the corresponding interest payment date on the Debentures. The relevant
record dates for the Common Securities shall be the same as for the Preferred
Securities. If the Preferred Securities shall not continue to remain represented
by one or more Global Securities, the relevant record dates for the Preferred
Securities shall be selected by the Regular Trustees and shall be at least one
Business Day prior to the relevant payment dates. At all times, the Distribution
payment dates shall correspond to the interest payment dates on the Debentures.
Distributions payable on any Securities that are not punctually paid on any
Distribution payment date, as a result of the Debenture Issuer having failed to
make a payment under the Debentures, shall cease to be payable to the Person in
whose name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with this Declaration. If any date on which
Distributions are payable on the Securities is not a Business Day, then payment
of the Distribution payable on such date will be made on the next succeeding day
<PAGE>
that is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, with the same force and effect as if made on such payment date.
(e In the event that there is any money or other property held
by or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata among the Holders of the Securities.
SECTION 7.3 Redemption of Securities.
(a Upon the repayment or redemption, in whole or in part, of
the Debentures held by the Trust, whether at the stated maturity of the
Debentures or upon earlier redemption as provided in the Indenture, the proceeds
from such repayment or redemption shall be simultaneously applied Pro Rata to
redeem Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed at the Redemption
Price. Holders shall be given not less than 30 nor more than 60 days notice of
such redemption in accordance with Section 7.4.
(b On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Securities will no longer be deemed to be
outstanding and (ii) certificates representing Securities will be deemed to
represent the Debentures having an aggregate principal amount equal to the
stated liquidation amount of, and bearing accrued and unpaid interest equal to
accrued and unpaid distributions on, such Securities until such certificates are
presented to the Sponsor or its agent for transfer or reissuance.
SECTION 7.4 Redemption Procedures.
(a Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution Notice"),
which notice shall be irrevocable, will be given by the Trust by mail to each
Holder of Securities to be redeemed or exchanged not fewer than 30 nor more than
60 days before the date fixed for redemption or exchange thereof which, in the
case of a redemption, will be the date fixed for redemption of the Debentures.
For purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 7.4(a), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to 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
register 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.
(b If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata (subject to Section 7.1(b)) and the Preferred Securities to be redeemed
will be redeemed as described in Section 7.4 below. The Trust may not redeem the
<PAGE>
Securities in part unless all accumulated and unpaid Distributions to the date
of redemption have been paid in full on all Securities then outstanding. For all
purposes of this Declaration, unless the context otherwise requires, all
provisions relating to the redemption of Preferred Securities shall relate, in
the case of any Preferred Security redeemed or to be redeemed only in part, to
the portion of the aggregate liquidation amount of Preferred Securities which
has been or is to be redeemed.
(c Subject to the Trust's fulfillment of the notice
requirements set forth in Section 7.4(a) above, if Securities are to be
redeemed, then (i) with respect to Preferred Securities represented by one or
more Global Securities, by 12:00 noon, New York City time, on the redemption
date (provided that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related redemption or maturity
of the Debentures), the Property Trustee will deposit irrevocably with the
Depositary or its nominee (or successor Clearing Agency or its nominee) funds
sufficient to pay the applicable Redemption Price with respect to the Preferred
Securities and will give the Depositary irrevocable instructions and authority
to pay the Redemption Price to the Holders of the Preferred Securities and (ii)
with respect to Securities not represented by one or more Global Securities
(provided that the Debenture Issuer has paid the Property Trustee a sufficient
amount of cash in connection with the related redemption or maturity of the
Debentures), the Paying Agent will pay the relevant Redemption Price to the
Holders of such Securities by check mailed to the address of the relevant Holder
appearing on the register of the Trust on the redemption date. If any date fixed
for redemption of Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in respect of any Securities is
improperly withheld or refused and not paid either by the Property Trustee or by
the Sponsor as guarantor pursuant to the Guarantee, Distributions on such
Securities will continue to accrue at the then applicable rate from the original
redemption date to the actual date of payment, in which case the actual payment
date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price. For these purposes, the applicable Redemption
Price shall not include Distributions which are being paid to Holders who were
Holders on a relevant record date. If a Redemption/Distribution Notice shall
have been given and funds deposited or paid as required, then immediately prior
to the close of business on the date of such deposit or payment, Distributions
will cease to accrue on the Securities called for redemption and all rights of
Holders of such Securities so called for redemption will cease, except the right
of the Holders to receive the Redemption Price, but without interest on such
Redemption Price, and from and after the date fixed for redemption, such
Securities will cease to be outstanding.
Neither the Regular Trustees nor the Trust shall be required
to register or cause to be registered the transfer of any Securities that have
been called for redemption, except in the case of any Securities being redeemed
in part, any portion thereof not to be redeemed.
(d Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), the Debenture Issuer
or its subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
<PAGE>
SECTION 7.5 Voting Rights of Preferred Securities.
(a Except as provided under Section 11.1 and this Article 7
and as otherwise required by the Business Trust Act, the Trust Indenture Act and
other applicable law, the Holders of the Preferred Securities shall have no
voting rights.
(b Subject to the requirement of the Property Trustee
obtaining a tax opinion in certain circumstances set forth in Section 7.5(d)
below, the Holders of a Majority in Liquidation Amount of the Preferred
Securities voting separately as a class have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Property Trustee, or to direct the exercise of any trust or power conferred upon
the Property Trustee under the Declaration, including the right to direct the
Property Trustee, as Holder of the Debentures, to (i exercise the remedies
available to it under the Indenture as a Holder of the Debentures; (ii consent
to any amendment or modification of the Indenture or the Debentures where such
consent shall be required or (iii) waive any past default and its consequences
that is waivable under Section 513 of the Indenture; provided, however, that if
an Indenture Event of Default has occurred and is continuing, then the Holders
of 25% of the aggregate liquidation amount of the Preferred Securities may
direct the Property Trustee to declare the principal of and interest on the
Debentures due and payable; provided, further, that where a consent or action
under the Indenture would require the consent or act of the Holders of more than
a majority of the aggregate principal amount of Debentures affected thereby,
only the Holders of the percentage of the aggregate stated liquidation amount of
the Preferred Securities which is at least equal to the percentage required
under the Indenture may direct the Property Trustee to give such consent to take
such action.
(c If the Property Trustee fails to enforce its rights under
the Debentures after a Holder of Preferred Securities has made a written
request, such Holder of Preferred Securities may, to the extent permitted by
applicable law, institute a legal proceeding directly against the Debenture
Issuer to enforce the Property Trustee's rights under the Indenture without
first instituting any legal proceeding against the Property Trustee or any other
person or entity. In addition, if a Trust Enforcement Event has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to make any interest, principal or other required payments when due under the
Indenture, then a Holder of Preferred Securities may directly institute a Direct
Action against the Debenture Issuer on or after the respective due date
specified in the Debentures.
(d The Property Trustee shall notify all Holders of the
Preferred Securities of any notice of any Indenture Event of Default received
from the Debenture Issuer with respect to the Debentures. Such notice shall
state that such Indenture Event of Default also constitutes a Trust Enforcement
Event. Except with respect to directing the time, method, and place of
conducting a proceeding for a remedy, the Property Trustee shall be under no
obligation to take any of the actions described in clause 7.5(b)(i) and (ii)
above unless the Property Trustee has obtained an opinion of independent tax
<PAGE>
counsel to the effect that the Trust will not fail to be classified as a grantor
trust for United States federal income tax purposes as a result of such action,
and each Holder will be treated as owning an undivided beneficial ownership
interest in the Debentures.
(e In the event the consent of the Property Trustee, as the
Holder of the Debentures, is required under the Indenture with respect to any
amendment or modification of the Indenture, the Property Trustee shall request
the direction of the Holders of the Securities with respect to such amendment or
modification and shall vote with respect to such amendment or modification as
directed by not less than 66-2/3% of the aggregate liquidation amount of the
Securities voting together as a single class; provided, however, that where a
consent under the Indenture would require the consent of the Holders of more
than a 66-2/3%of the aggregate principal amount of the Debentures, the Property
Trustee may only give such consent at the direction of the Holders of at least
the same proportion in aggregate stated liquidation amount of the Securities.
The Property Trustee shall not take any such action in accordance with the
directions of the Holders of the Securities unless the Property Trustee has
obtained an opinion of independent tax counsel to the effect that the Trust will
not be classified as other than a grantor trust for United States federal income
tax purposes as a result of such action, and each Holder will be treated as
owning an undivided beneficial ownership interest in the Debentures.
(f A waiver of an Indenture Event of Default with respect to
the Debentures will constitute a waiver of the corresponding Trust Enforcement
Event.
(g Any required approval or direction of Holders of Preferred
Securities may be given at a separate meeting of Holders of Preferred Securities
convened for such purpose, at a meeting of all of the Holders of Securities or
pursuant to written consent. The Regular Trustees shall cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
shall include a statement setting forth the following information: (i) the date
of such meeting or the date by which such action is to be taken; (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written consent
is sought; and (iii) instructions for the delivery of proxies or consents.
(h No vote or consent of the Holders of Preferred Securities
shall be required for the Trust to redeem and cancel Preferred Securities or
distribute Debentures in accordance with this Declaration and the terms of the
Securities.
(i Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Securities that are owned at such time by the Debenture Issuer, any
Regular Trustee or any entity directly or indirectly controlled by, or under
direct or indirect common control with, the Debenture Issuer or any Regular
Trustee, shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if such Securities were not outstanding.
(j Subject to 7.5(k), Holders of the Preferred Securities
shall have no rights to appoint or remove the Trustees, who may be appointed,
removed or replaced solely by the Common Securities Holder.
<PAGE>
(k If an Indenture Event of Default has occurred and is
continuing, the Trustees may be removed at such time only by a Majority in
Liquidation Amount of the Preferred Securities.
SECTION 7.6 Voting Rights of Common Securities.
(a Except as provided under Section 6.1(b), this Section 7.6
or Section 11.1 or as otherwise required by the Business Trust Act, the Trust
Indenture Act or other applicable law or provided by the Declaration, the
Holders of the Common Securities will have no voting rights.
(b Subject to Section 7.5(k), the Holders of the Common
Securities shall be entitled, in accordance with Article VI of this Declaration,
to vote to appoint, remove or replace any Trustee or to increase or decrease the
number of Trustees.
(c Subject to Section 2.6 and only after all Trust Enforcement
Events with respect to the Preferred Securities have been cured, waived, or
otherwise eliminated and subject to the requirement of the Property Trustee
obtaining a tax opinion in certain circumstances set forth in this paragraph
(c), the Holders of a Majority in Liquidation Amount of the Common Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee, or direct the exercise of any
trust or power conferred upon the Property Trustee under this Declaration,
including the right to direct the Property Trustee, as Holder of the Debentures,
to (i) exercise the remedies available to it under the Indenture as a Holder of
the Debentures, (ii) consent to any amendment or modification of the Indenture
or the Debentures where such consent shall be required or (iii) waive any past
default and its consequences that is waivable under Section 513 of the
Indenture; provided, however, that where a consent or action under the Indenture
would require the consent or act of the Holders of more than a majority of the
aggregate principal amount of Debentures affected thereby, only the Holders of
the percentage of the aggregate stated liquidation amount of the Common
Securities which is at least equal to the percentage required under the
Indenture may direct the Property Trustee to have such consent or take such
action. Except with respect to directing the time, method, and place of
conducting a proceeding for a remedy, the Property Trustee shall be under no
obligation to take any of the actions described in clause 7.6(c)(i) and (ii)
above unless the Property Trustee has obtained an opinion of independent tax
counsel to the effect that, as a result of such action, for United States
federal income tax purposes the Trust will not fail to be classified as a
grantor trust and each Holder will be treated as owning an undivided beneficial
ownership interest in the Debentures.
(d If the Property Trustee fails to enforce its rights under
the Debentures after a Holder of Common Securities has made a written request,
such Holder of Common Securities may, to the extent permitted by applicable law,
directly institute a legal proceeding directly against the Debenture Issuer to
enforce the Property Trustee's rights under the Debentures without first
instituting any legal proceeding against the Property Trustee or any other
person or entity.
<PAGE>
(e A waiver of an Indenture Event of Default with respect to
the Debentures will constitute a waiver of the corresponding Trust Enforcement
Event.
(f Any required approval or direction of Holders of Common
Securities may be given at a separate meeting of Holders of Common Securities
convened for such purpose, at a meeting of all of the Holders of Securities or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter on 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 the following information: (i) the date of
such meeting or the date by which such action is to be taken; (ii) a description
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents.
(g 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 Debentures in accordance with the Declaration and the terms of the
Securities.
SECTION 7.7 Paying Agent.
In the event that any Preferred Securities are not in
book-entry only form, the Trust shall maintain in the Borough of Manhattan, City
of New York, State of New York, an office or agency where the Preferred
Securities may be presented for payment ("Paying Agent"). The Trust may appoint
the paying agent and may appoint one or more additional paying agents in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent. The Trust may change any Paying Agent without prior
notice to the Holders. The Trust shall notify the Property Trustee of the name
and address of any Paying Agent not a party to this Declaration. If the Trust
fails to appoint or maintain another entity as Paying Agent, the Property
Trustee shall act as such. The Trust or any of its Affiliates may act as Paying
Agent. The Property Trustee shall initially act as Paying Agent for the
Securities. In the event The Property Trustee shall no longer be the Paying
Agent, the Regular Trustees shall appoint a successor (which shall be a bank or
trust company acceptable to the Debenture Issuer) to act as Paying Agent. The
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Property Trustee and the Debenture Issuer.
SECTION 7.8 Listing.
The Sponsor shall use its best efforts to cause the Preferred
Securities to be listed for quotation on the New York Stock Exchange.
SECTION 7.9 Transfer of Securities.
(a Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
<PAGE>
(b Subject to this Article 7, Preferred Securities shall
be freely transferable.
(c The Trust shall cause to be kept at the Corporate Trust
Office of the Property Trustee a register (the register maintained in such
office being herein sometimes referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Trust shall
provide for the registration of Preferred Securities and of transfers of
Preferred Securities. The Property Trustee is hereby appointed "Security
Registrar" for the purpose of registering Preferred Securities and transfers of
Preferred Securities as herein provided.
(d Upon surrender for registration of transfer of any Security
at an office or agency of the Trust designated for such purpose, the Trust shall
execute, and the Property Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of any
authorized denominations and of a like aggregate principal amount.
(e At the option of the Holder, Securities may be exchanged
for other Securities of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Trust shall execute, and in the case of Preferred Securities the Property
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
(f Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Trust or the Property
Trustee) be duly endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to the Trust and the Security Registrar duly executed, by
the Holder thereof or his attorney duly authorized in writing.
(g No service charge shall be made for any registration of
transfer or exchange of Securities, but the Trust may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities.
(h If the Securities are to be redeemed in part, the Trust
shall not be required (A) to issue, register the transfer of or exchange any
Securities during a period beginning at the opening of business 15 days before
the day of the mailing of a notice of redemption of any such Securities selected
for redemption under Section 7.4 and ending at the close of business on the day
of such mailing, or (B) to register the transfer or exchange of any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
<PAGE>
SECTION 7.10 Mutilated, Destroyed, Lost or Stolen Certificates
If:
(a any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b there shall be delivered to the Regular Trustees such
security or indemnity as may be required by them to keep each of the Trustees,
the Sponsor and the Trust harmless, then, in the absence of notice that such
Certificate shall have been acquired by a bona fide purchaser, any Regular
Trustee on behalf of the Trust shall execute and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like denomination. In connection with the issuance of any new
Certificate under this Section 7.10, the Regular Trustees may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of an
ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at
any time.
SECTION 7.11 Deemed Security Holders.
The Trustees may treat the Person in whose name any
Certificate shall be registered on the register of the Trust as the sole holder
of such Certificate and of the Securities represented by such Certificate for
purposes of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 7.12 Global Securities.
The Preferred Securities may be issued in the form of one or
more Global Securities. If the Preferred Securities are to be issued in the form
of one or more Global Securities, then the Regular Trustee on behalf of the
Trust shall execute and the Property Trustee shall authenticate and deliver one
or more Global Securities that (i) shall represent and shall be denominated in
an amount equal to the aggregate liquidation amount of all of the Preferred
Securities to be issued in the form of Global Securities and not yet cancelled,
(ii) shall be registered in the name of the Depositary for such Global Security
or Preferred Securities or the nominee of such Depositary, and (iii) shall be
delivered by the Property Trustee to such Depositary or pursuant to such
Depositary's instructions. Global Securities shall bear a legend substantially
to the following effect:
"This Preferred Security is a Global Security within the
meaning of the Declaration hereinafter referred to and is registered in the name
of The Depository Trust Company, a New York corporation (the "Depositary"), or a
nominee of the Depositary. This Preferred Security is exchangeable for Preferred
Securities registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Declaration and no
transfer of this Preferred Security (other than a transfer of this Preferred
Security as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
<PAGE>
Unless this Preferred Security Certificate is presented by an
authorized representative of the Depositary to Lehman Brothers Holdings Capital
Trust II or its agent for registration of transfer, exchange or payment, and any
Preferred Security Certificate issued is registered in the name of Cede & Co. or
such other name as registered by an authorized representative of the Depositary
(and any payment hereon is made to Cede & Co. or to such other entity as is
requested by an authorized representative of the Depositary), 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."
Preferred Securities not represented by a Global Security
issued in exchange for all or a part of a Global Security pursuant to this
Section 7.12 shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Property Trustee. Upon
execution and authentication, the Property Trustee shall deliver such Preferred
Securities not represented by a Global Security to the Persons in whose names
such definitive Preferred Securities are so registered.
At such time as all interests in Global Securities have been
redeemed, repurchased or cancelled, such Global Securities shall be, upon
receipt thereof, cancelled by the Property Trustee in accordance with standing
procedures of the Depositary. At any time prior to such cancellation, if any
interest in Global Securities is exchanged for Preferred Securities not
represented by a Global Security, redeemed, cancelled or transferred to a
transferee who receives Preferred Securities not represented by a Global
Security therefor or any Preferred Security not represented by a Global Security
is exchanged or transferred for part of Global Securities, the principal amount
of such Global Securities shall, in accordance with the standing procedures of
the Depositary, be reduced or increased, as the case may be, and an endorsement
shall be made on such Global Securities by the Property Trustee to reflect such
reduction or increase.
The Trust and the Property Trustee may for all purposes,
including the making of payments due on the Preferred Securities, deal with the
Depositary as the authorized representative of the Holders for the purposes of
exercising the rights of Holders hereunder. The rights of the owner of any
beneficial interest in a Global Security shall be limited to those established
by law and agreements between such owners and depository participants or
Euroclear and Cedel; provided, that no such agreement shall give any rights to
any Person against the Trust or the Property Trustee without the written consent
of the parties so affected. Multiple requests and directions from and votes of
the Depositary as holder of Preferred Securities in global form with respect to
any particular matter shall not be deemed inconsistent to the extent they do not
represent an amount of Preferred Securities in excess of those held in the name
of the Depositary or its nominee.
<PAGE>
If at any time the Depositary for any Preferred Securities
represented by one or more Global Securities notifies the Trust that it is
unwilling or unable to continue as Depositary for such Preferred Securities or
if at any time the Depositary for such Preferred Securities shall no longer be
eligible under this Section 7.12, the Trust shall appoint a successor Depositary
with respect to such Preferred Securities. If a successor Depositary for such
Preferred Securities is not appointed by the Trust within 90 days after the
Trust receives such notice or becomes aware of such ineligibility, the Trust's
election that such Preferred Securities be represented by one or more Global
Securities shall no longer be effective and the Trust shall execute, and the
Property Trustee will authenticate and deliver, Preferred Securities in
definitive registered form, in any authorized denominations, in an aggregate
liquidation amount equal to the principal amount of the Global Security or
Preferred Securities representing such Preferred Securities in exchange for such
Global Security or Preferred Securities.
The Trust may at any time and in its sole discretion determine
that the Preferred Securities issued in the form of one or more Global
Securities shall no longer be represented by a Global Security or Preferred
Securities. In such event the Trust shall execute, and the Property Trustee,
shall authenticate and deliver, Preferred Securities in definitive registered
form, in any authorized denominations, in an aggregate liquidation amount equal
to the principal amount of the Global Security or Preferred Securities
representing such Preferred Securities, in exchange for such Global Security or
Preferred Securities.
Notwithstanding any other provisions of this Declaration
(other than the provisions set forth in Section 7.9), Global Securities may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
Interests of beneficial owners in a Global Security may be
transferred or exchanged for Preferred Securities not represented by a Global
Security and Preferred Securities not represented by a Global Security may be
transferred or exchange for Global Securities in accordance with rules of the
Depositary and the provisions of Section 7.9.
ARTICLE 8
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust.
(a The Trust shall dissolve upon the earliest of:
(i the bankruptcy of the Holder of the Common Securities
or the Sponsor;
(ii the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; the filing of a
certificate of cancellation with respect to the Trust
after obtaining the consent of the Holders of at least
a Majority in Liquidation Amount of the Securities to
<PAGE>
the filing of a certificate of cancellation with
respect to the Trust or the revocation of the Sponsor's
charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii the entry of a decree of judicial dissolution of the
Sponsor or the Trust;
(iv the time when all of the Securities shall have been
called for redemption and the amounts then due shall
have been paid to the Holders in accordance with the
terms of the Securities;
(v upon the election of the Regular Trustees, following
the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved
in accordance with the terms of the Securities, and all
of the Debentures shall have been distributed to the
Holders of Securities in exchange for all of the
Securities;
(vi at the Sponsor's election by notice and direction to
the Property Trustee to distribute the Debentures to
the Holders of the Securities in exchange for all of
the Securities; provided that the Sponsor will be
required to obtain an opinion of counsel that the
distribution of the Debentures will not be taxable to
the Holders of the Preferred Securities for United
States federal income tax purposes; or
(vii the time when all of the Regular Trustees and the
Sponsor shall have consented to dissolution of the
Trust provided such action is taken before the issuance
of any Securities;
(b As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and upon completion of the winding up and
liquidation of the Trust, the Trustees shall terminate the Trust by filing a
certificate of cancellation with the Secretary of State of the State of
Delaware.
(c The provisions of Section 4.2 and Article 9 shall
survive the termination of the Trust.
SECTION 8.2 Liquidation Distribution Upon Dissolution of the
Trust.
(a In the event of any voluntary or involuntary liquidation,
dissolution, or winding-up of the Trust (each a "Liquidation"), the Holders of
the Securities on the date of the Liquidation will be entitled to receive, out
of the assets of the Trust available for distribution to Holders of Securities
after satisfaction of the Trusts' liabilities to creditors, if any,
distributions in cash or other immediately available funds in an amount equal to
the aggregate of the stated liquidation amount of $25 per Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
<PAGE>
being the "Liquidation Distribution"), unless, in connection with such
Liquidation, Debentures in an aggregate stated principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
distribution rate of, and accrued and unpaid interest equal to accumulated and
unpaid Distributions on, such Securities shall be distributed on a Pro Rata
basis to the Holders of the Securities in exchange for such Securities.
(b If, upon any such Liquidation, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis. The
Holders of the Common Securities will be entitled to receive distributions upon
any such Liquidation Pro Rata with the Holders of the Preferred Securities
except that if an Indenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities with
regard to such distributions.
ARTICLE 9
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, DELAWARE TRUSTEES OR OTHERS
SECTION 9.1 Liability.
(a Except as expressly set forth in this Declaration,
the Guarantee and the terms of the Securities, the Sponsor:
(i shall not be personally liable for the return of any
portion of the capital contributions (or any return
thereon) of the Holders of the Securities which shall
be made solely from assets of the Trust; and
(ii shall not be required to pay to the Trust or to any
Holder of Securities any deficit upon dissolution of
the Trust or otherwise.
(b Pursuant to Section 3803(a) of the Business Trust Act, the
Holder of the Common Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware; provided,
however, the Holders of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
<PAGE>
SECTION 9.2 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.
SECTION 9.3 Fiduciary Duty.
(a To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person acting under
this Declaration shall not be liable to the Trust or to an 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.
<PAGE>
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires,
including its own interests, and shall have no duty or
obligation to give any consideration to any interest of
or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express
standard and shall not be subject to any other or
different standard imposed by this Declaration or by
applicable law.
SECTION 9.4 Indemnification.
(a)(i) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Debenture Issuer Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by reason
of the fact that he is or was a Debenture Issuer Indemnified Person against
expenses (including attorney fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the 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 Debenture Issuer Indemnified Person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent permitted by law,
any Debenture Issuer Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the Trust to procure a judgment in its favor by reason of the
fact that he is or was a Debenture Issuer Indemnified Person against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted 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 Debenture Issuer
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.
<PAGE>
(iii) Any indemnification under paragraphs (i) and (ii) of this Section 9.4(a)
(unless ordered by a court) shall be made by the Debenture Issuer only as
authorized in the specific case upon a determination that indemnification of the
Debenture Issuer Indemnified Person is proper in the circumstances because he
has met the applicable standard of conduct set forth in paragraphs (i) and (ii).
Such determination shall be made (1) by the Regular Trustees by a majority vote
of a quorum consisting of such Regular Trustees who were not parties to such
action, suit or proceeding, (2) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion, or (3) by the Common Security
Holder of the Trust.
(iv) Expenses (including attorneys' fees) incurred by a Debenture Issuer
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 9.4(a) shall be paid by the Debenture Issuer in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Debenture Issuer 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 9.4(a).
Notwithstanding the foregoing, no advance shall be made by the Debenture Issuer
if a determination is reasonably and promptly made (i) by the Regular Trustees
by a majority vote of a quorum of disinterested Regular Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written opinion
or (iii) the Common Security Holder of the Trust, that, based upon the facts
known to the Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Debenture Issuer Indemnified Person acted in
bad faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the Trust, or, with respect to any criminal
proceeding, that such Debenture Issuer Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event shall any
advance be made in instances where the Regular Trustees, independent legal
counsel or Common Security Holder reasonably determine that such person
deliberately breached his duty to the Trust or its Common or Preferred Security
Holders.
(v) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other paragraphs of this Section 9.4(a) shall not be deemed
exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Debenture Issuer or Preferred
Security Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section 9.4(a) (a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Debenture Issuer
Indemnified Person who serves in such capacity at any time while this Section
9.4(a) is in effect. Any repeal or modification of this Section 9.4(a) shall not
affect any rights or obligations then existing.
<PAGE>
(vi) The Debenture Issuer or the Trust may purchase and maintain insurance on
behalf of any person who is or was a Debenture Issuer Indemnified Person against
any liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Debenture Issuer would
have the power to indemnify him against such liability under the provisions of
this Section 9.4(a).
(vii) For purposes of this Section 9.4(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
9.4(a) with respect to the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence had continued.
(viii) The indemnification and advancement of expenses provided by, or granted
pursuant to, this Section 9.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a Debenture
Issuer Indemnified Person and shall inure to the benefit of the heirs, executors
and administrators of such a person. The obligation to indemnify as set forth in
this Section 9.4(a) shall survive the resignation or removal of the Delaware
Trustee or the Property Trustee or the termination of this Declaration.
(b) The Debenture Issuer 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 loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 9.4(b) shall
survive the resignation and removal of the Delaware Trustee or the Property
Trustee and the satisfaction and discharge of this Declaration. In addition, the
Debenture Issuer has agreed in the Indenture to pay the fees and expenses of the
Delaware Trustee and the Property Trustee.
<PAGE>
SECTION 9.5 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 activities 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 activities 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.
ARTICLE 10
ACCOUNTING
SECTION 10.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 10.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books of account, records
and supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after the end of
each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, an annual United States federal
income tax information statement, required by the Code, containing such
<PAGE>
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Regular Trustees on behalf of the Trust with any state or local
taxing authority.
SECTION 10.3 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 Account and no other funds of the Trust shall be
deposited in the Property Account. The sole signatories for such accounts shall
be designated by the Regular Trustees; provided, however, that the Property
Trustee shall designate the signatories for the Property Account.
SECTION 10.4 Withholding.
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Regular Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder, the amount withheld shall
be deemed to be a distribution in the amount of the withholding to the Holder.
In the event of any claimed over withholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
<PAGE>
ARTICLE 11
AMENDMENTS AND MEETINGS
SECTION 11.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by the Sponsor and (i) the Regular
Trustees (or, if there are more than two Regular Trustees, a majority of the
Regular Trustees) and (ii) the Property Trustee if the amendment affects the
rights, powers, duties, obligations or immunities of the Property Trustee; and
(iii) by the Delaware Trustee if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware Trustee.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee 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:
a. an Officers' Certificate from each
of the Trust and the Sponsor that
such amendment is permitted by, and
conforms to, the terms of this
Declaration (including the terms of
the Securities) and that all
conditions precedent to the
execution and delivery of such
amendment have been satisfied; and
b. an opinion of counsel (who may be
counsel to the Sponsor or the Trust)
that such amendment is permitted by,
and conforms to, the terms of this
Declaration (including the terms of
the Securities) and that all
conditions precedent to the
execution and delivery of such
amendment have been satisfied; and
(iii)to the extent the result of such amendment would be
to:
a. cause the Trust to be classified other
than as a grantor trust for United States
federal income tax purposes;
<PAGE>
b. reduce or otherwise adversely affect
the powers of the Property Trustee
in contravention of the Trust
Indenture Act; or
c. cause the Trust to be deemed to be
an Investment Company required to be
registered under the Investment
Company Act.
(c) If the Trust has issued any Securities that remain
outstanding:
(i) any amendment that would (a) change the amount or
timing of any distribution of 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 (b) restrict the
right of a Holder of Securities to institute suit for
the enforcement of any such payment on or after such
date, will entitle the Holders of such Securities,
voting together as a single class, to vote on such
amendment or proposal and such amendment or proposal
shall not be effective except with the approval of each
of the Holders of the Securities affected thereby; and
(ii) any amendment that would (a) adversely affect the
powers, preferences or special rights of the
Securities, whether by way of amendment to this
Declaration or otherwise or (b) result in the
dissolution, winding-up or termination of the Trust
other than pursuant to the terms of this Declaration,
will entitle the holders of the Securities voting
together as a single class to vote on such amendment or
proposal and such amendment or proposal shall not be
effective except with the approval of 66 _% of the
Securities affected thereby; provided that, if any
amendment or proposal referred to in clause (a) above
would adversely affect only the Preferred Securities or
the Common Securities, then only the affected class
will be entitled to vote on such amendment or proposal
and such amendment or proposal.
(d) This Section 11.1 shall not be amended without the
consent of all of the Holders of the Securities.
(e) Article 4 shall not be amended without the consent of
the Holders of a Majority in Liquidation Amount of the Common Securities.
(f) The rights of the Holders of the Common Securities under
Article 5 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.
<PAGE>
(g) Notwithstanding Section 11.1(c), this Declaration may be
amended without the consent of the Holders of the Securities, if such amendment
does not adversely affect in any material respect the rights of the holders of
the Securities, to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other
provision of this Declaration;
(iii)add to the covenants, restrictions or obligations of
the Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change
in interpretation or application of Rule 3a-5 by any
legislative body, court, government agency or
regulatory authority; or
(v) to modify, eliminate and add to any provision of this
Declaration to ensure that the Trust will be classified
as a grantor trust for United States federal income tax
purposes at all times that any Securities are
outstanding or to ensure that the Trust will not be
required to register as an Investment Company under the
Investment Company Act.
SECTION 11.2 Meetings of the Holders of Securities; Action by
Written Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of at
least 10% in Liquidation Amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders of
Securities:
<PAGE>
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at
least 7 days and not more than 60 days before the date
of such meeting. Whenever a vote, consent or approval
of the Holders of Securities is permitted or required
under this Declaration or the rules of any stock
exchange on which the Preferred Securities are listed
or admitted for trading, such vote, consent or approval
may be given at a meeting of the Holders of Securities.
Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting if
a consent in writing setting forth the action so taken
is signed by the Holders of Securities owning not less
than the minimum amount of Securities in liquidation
amount that would be necessary to authorize or take
such action at a meeting at which all Holders of
Securities having a right to vote thereon were present
and voting. Prompt notice of the taking of action
without a meeting shall be given to the Holders of
Securities entitled to vote who have not consented in
writing. The Regular Trustees may specify that any
written ballot submitted to the Security Holders for
the purpose of taking any action without a meeting
shall be returned to the Trust within the time
specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to
act for it by proxy on all matters in which a Holder of
Securities is entitled to participate, including
waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid
after the expiration of 11 months from the date thereof
unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Holder of
Securities executing such proxy. Except as otherwise
provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the
General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of
a Delaware corporation;
(iii)each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other
Person that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the
listing rules of any stock exchange on which the
Preferred Securities are then listed for trading,
otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions
relating to meetings of Holders of Securities,
including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice,
action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person
or by proxy or any other matter with respect to the
exercise of any such right to vote.
<PAGE>
ARTICLE 12
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 12.1 Representations and Warranties of the Property
Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) the Property Trustee is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, this
Declaration;
(b) the Property Trustee satisfies the requirements set forth
in Section 6.3(a);
(c) the execution, delivery and performance by the Property
Trustee of this Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. This Declaration has been duly
executed and delivered by the Property Trustee, and it constitutes a legal,
valid and binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(d) the execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or constitute a
breach of the articles of association or incorporation, as the case may be, or
the by-laws (or other similar organizational documents) of the Property Trustee;
and
(e) no consent, approval or authorization of, or registration
with or notice to, any State or federal banking authority is required for the
execution, delivery or performance by the Property Trustee of this Declaration.
SECTION 12.2 Representations and Warranties of the Delaware
Trustee.
<PAGE>
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) the Delaware Trustee satisfies the requirements set forth
in Section 6.2 and has the power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Declaration and,
if it is not a natural person, is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization;
(b) the Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and this Declaration. This
Declaration under Delaware law constitutes a legal, valid and binding obligation
of the Delaware Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or at law);
and
(c) no consent, approval or authorization of, or registration
with or notice to, any State or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of this Declaration.
ARTICLE 13
MISCELLANEOUS
SECTION 13.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as the Trust
may give notice of to the Property Trustee, the Delaware Trustee and the Holders
of the Securities):
c/o Lehman Brothers Holdings Inc.
3 World Financial Center
New York, New York 10285
Attention: Corporate Counsel
Telecopy No: (212) 526-3774
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as the Delaware Trustee may give notice
of to the Regular Trustees, the Property Trustee and the Holders of the
Securities):
<PAGE>
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trustee Administration
Telecopy No: (302) 984-4903
(c) if given to the Property Trustee, at its Corporate Trust
Office (or such other address as the Property Trustee may give notice of to the
Regular Trustees, the Delaware Trustee and the Holders of the Securities).
(d) if given to the 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 of to the Property Trustee, the
Delaware Trustee and the Trust):
(e) if given to any other Holder, at the address set forth on
the register of the Trust.
All such notices shall be deemed to have been given when received in person,
telecopied with receipt confirmed or mailed by first class mail, postage prepaid
except that if a notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was given, such notice
or other document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.
SECTION 13.2 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware.
SECTION 13.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted in a manner consistent with
such classification.
SECTION 13.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 13.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
<PAGE>
SECTION 13.6 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 13.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
IN WITNESS WHEREOF, the undersigned have caused these presents
to be executed as of the day and year first above written.
LEHMAN BROTHERS HOLDINGS INC.
as Sponsor and as Common Securities Holder
BY:/s/ Jennifer Marre
Name: Jennifer Marre
Title: Vice President
THE CHASE MANHATTAN BANK,
as Property Trustee
BY:/s/ Francine Springer
Name: Francine Springer
Title: Assistant Vice President
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
BY:/s/ Denis Kelly
Name: Denis Kelly
Title: Trust Officer
/s/ Karen M. Muller
Karen M. Muller, as Regular Trustee
/s/ Jennifer Marre
Jennifer Marre, as Regular Trustee
/s/ Oliver Budde
Oliver Budde, as Regular Trustee
<PAGE>
EXHIBIT A
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL SECURITY, INSERT
THE FOLLOWING: This Preferred Security is a Global Security within the meaning
of the Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company, a New York corporation (the "Depositary"), or a
nominee of the Depositary. This Preferred Security is exchangeable for Preferred
Securities registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Declaration and no
transfer of this Preferred Security (other than a transfer of this Preferred
Security as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
Unless this Preferred Security Certificate is presented by an
authorized representative of the Depositary to the issuer or its agent for
registration of transfer, exchange or payment, and any Preferred Security
Certificate issued is registered in the name of Cede & Co. or such other name as
registered by an authorized representative of the Depositary (and any payment
hereon is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depositary), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]
Certificate No. [R-1/R-2] Number of Preferred Securities: [10,000,000/4,400,000]
CUSIP No. 52518G209
Certificate Evidencing Preferred Securities
of
Lehman Brothers Holdings Capital Trust II
7.875% % Preferred Securities, Series J
(liquidation amount $25 per Preferred Security)
Lehman Brothers Holdings Capital Trust II , a statutory
business trust formed under the laws of the State of Delaware (the "Trust"),
hereby certifies that Cede & Co. (the "Holder") is the registered owner of
[10,000,000/4,400,000] preferred securities of the Trust representing undivided
beneficial ownership interests in the assets of the Trust designated the 7.875%
Preferred Securities, Series J (liquidation amount $25 per Preferred Security)
(the "Preferred Securities"). The Preferred Securities are transferable on the
register of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in the Declaration (as defined below). The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust, dated as of April 20, 1999 (as the same may be amended from time to
time (the "Declaration"), among LEHMAN BROTHERS HOLDINGS INC., as Sponsor, KAREN
M. MULLER, JENNIFER MARRE and OLIVER BUDDE, as Regular Trustees, THE CHASE
<PAGE>
MANHATTAN BANK, as Property Trustee, and CHASE MANHATTAN BANK DELAWARE, as
Delaware Trustee. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits of
the Guarantee to the extent described therein. The Sponsor will provide a copy
of the Declaration, the Guarantee and the Indenture to a Holder without charge
upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of undivided indirect beneficial ownership interests in
the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate
this 20th day of April, 1999.
LEHMAN BROTHERS HOLDINGS
CAPITAL TRUST II
By:
Name:
Title: Regular Trustee
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
THE CHASE MANHATTAN BANK,
as Property Trustee
By:
Authorized Officer
<PAGE>
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate No. R-1 Number of Common Securities: 445,361
Certificate Evidencing Common Securities
of
Lehman Brothers Holdings Capital Trust II
7.875% Common Securities, Series J
(liquidation amount $25 per Common Security)
Lehman Brothers Holdings Capital Trust II , a statutory
business trust formed under the laws of the State of Delaware (the "Trust"),
hereby certifies that LEHMAN BROTHERS HOLDINGS INC. (the "Holder") is the
registered owner of 445,361 common securities of the Trust representing an
undivided beneficial ownership interest in the assets of the Trust designated
the 7.875% Common Securities , Series J (liquidation amount $25 per Common
Security) (the "Common Securities"). The Common Securities are not transferable
and any attempted transfer thereof shall be void. The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust, dated as of April 20, 1999 (as the same may be amended from time to
time, the "Declaration"), among LEHMAN BROTHERS HOLDINGS INC. as Sponsor, KAREN
M. MULLER, JENNIFER MARRE and OLIVER BUDDE, as Regular Trustees, THE CHASE
MANHATTAN BANK, as Property Trustee, and CHASE MANHATTAN BANK DELAWARE, as
Delaware Trustee. The Holder is entitled to the benefits of the Guarantee to the
extent described therein. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Sponsor will provide a copy
of the Declaration, the Guarantee and the Indenture to the Holder without charge
upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Common
Securities as evidence of an undivided indirect beneficial ownership interest in
the Debentures.
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate
this 20th day of April, 1999.
LEHMAN BROTHERS HOLDINGS
CAPITAL TRUST II
By:____________________________________
Name:
Title: Regular Trustee
<PAGE>
CROSS REFERENCE TABLE*
Section of Trust
Indenture Act of Section of
1939, as amended Agreement
310(a)...................................................................6.3
310(b)........................................................6.3(c); 6.3(d)
310(c)..........................................................Inapplicable
311(a)................................................................2.2(b)
311(b)................................................................2.2(b)
311(c)..........................................................Inapplicable
312(a)................................................................2.2(a)
312(b)................................................................2.2(b)
312(c)..........................................................Inapplicable
313(a)...................................................................2.3
313(b)...................................................................2.3
313(c)...................................................................2.3
313(d)...................................................................2.3
314(a)...................................................................2.4
314(b)..........................................................Inapplicable
314(c)...................................................................2.5
314(d)..........................................................Inapplicable
314(e)...................................................................2.5
314(f)..........................................................Inapplicable
315(a).......................................................3.9(b); 3.10(a)
315(b)................................................................2.7(a)
315(c)................................................................3.9(a)
315(d)................................................................3.9(b)
316(a)...................................................2.6; 7.5(b); 7.6(c)
316(b)..........................................................Inapplicable
316(c)..........................................................Inapplicable
317(a)..................................................................3.16
317(b)..........................................................Inapplicable
318(a)................................................................2.1(c)
*This Cross-Reference Table does not consitute part of the Agreement and shall
not have any bearing upon the interpretation of any of its terms or provisions.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1INTERPRETATION AND DEFINITIONS.................................... ...1
SECTION 1.1 Interpretation and Definitions...............................1
Affiliate.............................................................2
Authorized Officer....................................................2
Beneficial Owners.....................................................2
Business Day..........................................................2
Business Trust Act....................................................2
Cedel.................................................................2
Certificate...........................................................2
Certificate of Trust..................................................2
Closing Date..........................................................2
Code..................................................................2
Commission............................................................3
Common Securities Holder..............................................3
Common Security.......................................................3
Common Security Certificate...........................................3
Corporate Trust Office................................................3
Covered Person........................................................3
Debenture Issuer......................................................3
Debenture Issuer Indemnified Person...................................3
Debenture Trustee.....................................................3
Debentures............................................................3
Delaware Trustee......................................................3
Depositary............................................................3
Depositary Participant................................................3
Direct Action.........................................................3
Distribution..........................................................4
Euroclear.............................................................4
Exchange Act..........................................................4
Fiduciary Indemnified Person..........................................4
Fiscal Year...........................................................4
Global Security.......................................................4
Guarantee.............................................................4
Holder............................................................... 4
Indemnified Person....................................................4
Indenture.............................................................4
Indenture Event ofDefault.............................................4
Investment Company....................................................4
Investment Company Act................................................4
<PAGE>
Investment Company Event..............................................5
Legal Action..........................................................5
List of Holders.......................................................5
Majority in Liquidation Amount........................................5
New York Stock Exchange...............................................5
Officers' Certificate.................................................5
Paying Agent..........................................................6
Payment Amount........................................................6
Person................................................................6
Preferred Security....................................................6
Preferred Security Certificate........................................6
Property Account......................................................6
Property Trustee......................................................6
Pro Rata..............................................................6
Quorum................................................................6
Redemption/Distribution Notice........................................6
Redemption Price......................................................6
Regular Trustee.......................................................6
Related Party.........................................................6
Responsible Officer...................................................6
Rule 3a-5.............................................................7
Securities............................................................7
Securities Act........................................................7
Special Event.........................................................7
Sponsor...............................................................7
Successor Delaware Trustee............................................7
Successor Entity......................................................7
Successor Property Trustee............................................7
Successor Security....................................................7
Super Majority........................................................7
Tax Event.............................................................7
10% in Liquidation Amount.............................................7
Treasury Regulations..................................................8
Trust.................................................................8
Trust Enforcement Event...............................................8
Trust Indenture Act...................................................8
Trustee...............................................................8
ARTICLE 2TRUST 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 the Property Trustee.....................9
SECTION 2.5 Evidence of Compliance with Conditions Precedent.............9
SECTION 2.6 Trust Enforcement Events; Waiver............................10
SECTION 2.7 Trust Enforcement Event; Notice.............................11
<PAGE>
ARTICLE 3ORGANIZATION.........................................................12
SECTION 3.1 Name and Organization.......................................12
SECTION 3.2 Office.......................................................12
SECTION 3.3 Purpose.....................................................12
SECTION 3.4 Authority...................................................13
SECTION 3.5 Title to Property of the Trust..............................13
SECTION 3.6 Powers and Duties of the Regular Trustees...................13
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees........16
SECTION 3.8 Powers and Duties of the Property Trustee...................17
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.19
SECTION 3.10 Certain Rights of Property Trustee.........................21
SECTION 3.11 Delaware Trustee...........................................24
SECTION 3.12 Execution of Documents.....................................24
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.....24
SECTION 3.14 Duration of Trust..........................................25
SECTION 3.15 Mergers....................................................25
SECTION 3.16 Property Trustee May File Proofs of Claim..................27
ARTICLE 4SPONSOR..............................................................28
SECTION 4.1 Responsibilities of the Sponsor.............................28
SECTION 4.2 Indemnification and Fees and Expenses of the Trustees.......28
ARTICLE 5TRUST COMMON SECURITIES HOLDER.......................................28
SECTION 5.1 Debenture Issuer's Purchase of Common Securities............28
SECTION 5.2 Covenants of the Common Securities Holder...................29
ARTICLE 6TRUSTEES.............................................................29
SECTION 6.1 Number of Trustees..........................................29
SECTION 6.2 Delaware Trustee; Eligibility...............................29
SECTION 6.3 Property Trustee; Eligibility...............................30
SECTION 6.4 Qualifications of Regular Trustees and Delaware Trustee
Generally...................................................31
SECTION 6.5 Initial Regular Trustees....................................31
SECTION 6.6 Appointment, Removal and Resignation of Trustees............31
SECTION 6.7 Vacancies among Trustees....................................32
SECTION 6.8 Effect of Vacancies.........................................33
SECTION 6.9 Meetings....................................................33
SECTION 6.10 Delegation of Power........................................33
SECTION 6.11 Merger, Conversion, Consolidation or Succession to Business34
ARTICLE 7TERMS OF SECURITIES..................................................34
SECTION 7.1 General Provisions Regarding Securities.....................34
SECTION 7.2 Distributions...............................................36
SECTION 7.3 Redemption of Securities....................................37
SECTION 7.4 Redemption Procedures.......................................38
SECTION 7.5 Voting Rights of Preferred Securities.......................39
<PAGE>
SECTION 7.6 Voting Rights of Common Securities..........................41
SECTION 7.7 Paying Agent................................................42
SECTION 7.8 Listing.....................................................43
SECTION 7.9 Transfer of Securities......................................43
SECTION 7.10 Mutilated, Destroyed, Lost or Stolen Certificates..........44
SECTION 7.11 Deemed Security Holders.....................................44
SECTION 7.12 Global Securities..........................................45
ARTICLE 8DISSOLUTION AND TERMINATION OF TRUST.................................47
SECTION 8.1 Dissolution and Termination of Trust........................47
SECTION 8.2 Liquidation Distribution Upon Dissolution of the Trust......48
ARTICLE 9LIMITATION OF LIABILITY OFHOLDERS OF SECURITIES, DELAWARE TRUSTEES OR
OTHERS...............................................................48
SECTION 9.1 Liability...................................................48
SECTION 9.2 Exculpation.................................................49
SECTION 9.3 Fiduciary Duty..............................................49
SECTION 9.4 Indemnification.............................................50
SECTION 9.5 Outside Businesses..........................................53
ARTICLE 10ACCOUNTING..........................................................53
SECTION 10.1 Fiscal Year................................................53
SECTION 10.2 Certain Accounting Matters.................................53
SECTION 10.3 Banking....................................................54
SECTION 10.4 Withholding................................................54
ARTICLE 11AMENDMENTS AND MEETINGS.............................................55
SECTION 11.1 Amendments.................................................55
SECTION 11.2 Meetings of the Holders of Securities; Action by Written
Consent....................................................57
ARTICLE 12REPRESENTATIONS OF PROPERTY TRUSTEEAND DELAWARE TRUSTEE.............59
SECTION 12.1 Representations and Warranties of the Property Trustee.....59
SECTION 12.2 Representations and Warranties of the Delaware Trustee.....59
ARTICLE 13MISCELLANEOUS.......................................................60
SECTION 13.1 Notices....................................................60
SECTION 13.2 Governing Law..............................................61
SECTION 13.3 Intention of the Parties...................................61
SECTION 13.4 Headings...................................................61
SECTION 13.5 Successors and Assigns.....................................61
SECTION 13.6 Partial Enforceability.....................................62
SECTION 13.7 Counterparts...............................................62
<PAGE>
EXHIBITS
Exhibit A Form of Preferred Security Certificate
Exhibit B.........Form of Common Security Certificate
Exhibit 4.04
This Preferred Security is a Global Security within the
meaning of the Declaration hereinafter referred to and is registered in the name
of The Depository Trust Company, a New York corporation (the "Depositary"), or a
nominee of the Depositary. This Preferred Security is exchangeable for Preferred
Securities registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Declaration and no
transfer of this Preferred Security (other than a transfer of this Preferred
Security as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
Unless this Preferred Security Certificate is presented by an
authorized representative of the Depositary to the issuer or its agent for
registration of transfer, exchange or payment, and any Preferred Security
Certificate issued is registered in the name of Cede & Co. or such other name as
registered by an authorized representative of the Depositary (and any payment
hereon is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depositary), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
Certificate No. R-1 Number of Preferred Securities: 10,000,000
CUSIP No. 52518G209
Certificate Evidencing Preferred Securities
of
Lehman Brothers Holdings Capital Trust II
7.875 % Preferred Securities, Series J
(liquidation amount $25 per Preferred Security)
Lehman Brothers Holdings Capital Trust II, a statutory
business trust formed under the laws of the State of Delaware (the "Trust"),
hereby certifies that Cede & Co. (the "Holder") is the registered owner of
10,000,000 preferred securities of the Trust representing undivided beneficial
ownership interests in the assets of the Trust designated the 7.875% Preferred
Securities, Series J (liquidation amount $25 per Preferred Security) (the
"Preferred Securities"). The Preferred Securities are transferable on the
register of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in the Declaration (as defined below). The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust, dated as of April 20, 1999 (as the same may be amended from time to
time (the "Declaration"), among LEHMAN BROTHERS HOLDINGS INC., as Sponsor, KAREN
M. MULLER, JENNIFER MARRE and OLIVER BUDDE, as Regular Trustees, THE CHASE
MANHATTAN BANK, as Property Trustee, and CHASE MANHATTAN BANK DELAWARE, as
<PAGE>
Delaware Trustee. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits of
the Guarantee to the extent described therein. The Sponsor will provide a copy
of the Declaration, the Guarantee and the Indenture to a Holder without charge
upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of undivided indirect beneficial ownership interests in
the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate
this 20th day of April, 1999.
LEHMAN BROTHERS HOLDINGS
CAPITAL TRUST II
By: /s/ Oliver Budde
Name: Oliver Budde
Title: Regular Trustee
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
THE CHASE MANHATTAN BANK,
as Property Trustee
By: /s/ Francine Springer
Name: Francine Springer
Title: Assistant Vice President
<PAGE>
This Preferred Security is a Global Security within the
meaning of the Declaration hereinafter referred to and is registered in the name
of The Depository Trust Company, a New York corporation (the "Depositary"), or a
nominee of the Depositary. This Preferred Security is exchangeable for Preferred
Securities registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Declaration and no
transfer of this Preferred Security (other than a transfer of this Preferred
Security as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
Unless this Preferred Security Certificate is presented by an
authorized representative of the Depositary to the issuer or its agent for
registration of transfer, exchange or payment, and any Preferred Security
Certificate issued is registered in the name of Cede & Co. or such other name as
registered by an authorized representative of the Depositary (and any payment
hereon is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depositary), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
Certificate No. R-2 Number of Preferred Securities: 4,400,000
CUSIP No. 52518G209
Certificate Evidencing Preferred Securities
of
Lehman Brothers Holdings Capital Trust II
7.875 % Preferred Securities, Series J
(liquidation amount $25 per Preferred Security)
Lehman Brothers Holdings Capital Trust II, a statutory
business trust formed under the laws of the State of Delaware (the "Trust"),
hereby certifies that Cede & Co. (the "Holder") is the registered owner of
4,400,000 preferred securities of the Trust representing undivided beneficial
ownership interests in the assets of the Trust designated the 7.875% Preferred
Securities, Series J (liquidation amount $25 per Preferred Security) (the
"Preferred Securities"). The Preferred Securities are transferable on the
register of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in the Declaration (as defined below). The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust, dated as of April 20, 1999 (as the same may be amended from time to
time (the "Declaration"), among LEHMAN BROTHERS HOLDINGS INC., as Sponsor, KAREN
M. MULLER, JENNIFER MARRE and OLIVER BUDDE, as Regular Trustees, THE CHASE
<PAGE>
MANHATTAN BANK, as Property Trustee, and CHASE MANHATTAN BANK DELAWARE, as
Delaware Trustee. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits of
the Guarantee to the extent described therein. The Sponsor will provide a copy
of the Declaration, the Guarantee and the Indenture to a Holder without charge
upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of undivided indirect beneficial ownership interests in
the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate
this 20th day of April, 1999.
LEHMAN BROTHERS HOLDINGS
CAPITAL TRUST II
By: /s/ Oliver Budde
Name: Oliver Budde
Title: Regular Trustee
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
THE CHASE MANHATTAN BANK,
as Property Trustee
By: /s/ Francine Springer
Name: Francine Springer
Title: Assistant Vice President
Exhibit 4.05
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Guarantee"), dated as of April
20, 1999, is executed and delivered by Lehman Brothers Holdings Inc., a Delaware
corporation (the "Guarantor"), and The Chase Manhattan Bank, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Securities (as defined herein) of Lehman Brothers Holdings
Capital Trust II, a Delaware statutory business trust (the "Trust").
W I T N E S S E T H :
WHEREAS, pursuant to the Declaration (as defined herein), the
Trust may issue up to $397,000,000 aggregate liquidation amount of preferred
securities, having a liquidation amount of $25 per security and designated the
7.875% Preferred Securities, Series J (the "Preferred Securities") and up to
$12,278,375 aggregate liquidation amount of common securities, having a
liquidation amount of $25 per security and designated the 7.875% Common
Securities (the "Common Securities" and, together with the Preferred Securities,
the "Securities");
WHEREAS, as incentive for the Holders to purchase the
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Guarantee, to pay to the Holders of the Securities
the Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein; and that if a Trust Enforcement Event
(as defined herein) has occurred and is continuing, the rights of holders of the
Common Securities to receive Guarantee Payments under this Guarantee are
subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments under this Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee for the
benefit of the Holders.
ARTICLE 1
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions. In this Guarantee,
unless the context otherwise requires:
(a) capitalized terms used in this Guarantee but not defined
in the preamble above have the respective meanings assigned to them in
this Section 1.1;
<PAGE>
(b) a term defined anywhere in this Guarantee has the same
meaning throughout;
(c) all references to "the Guarantee" or "this Guarantee" are
to this Guarantee as modified, supplemented or amended from time to
time;
(d) all references in this Guarantee to Articles, Sections and
Recitals are to Articles, Sections and Recitals of this Guarantee,
unless otherwise specified;
(e) unless otherwise defined in this Guarantee, a term defined
in the Trust Indenture Act has the same meaning when used in this
Guarantee;
(f) a reference to the singular includes the plural and vice
versa and a reference to any masculine form of a term shall include the
feminine form of a term, as applicable; and
(g) the following terms have the following meanings:
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" has the meaning specified in the Declaration.
"Common Securities" has the meaning specified in the Recitals
hereto.
"Corporate Trust Office" means the principal office of the
Guarantee Trustee at which at any particular time its corporate trust business
shall be administered, which office at the date of execution of this Guarantee
is located at 450 West 33rd Street, New York, New York 10001.
"Covered Person" means a Holder or beneficial owner of
Securities.
"Debentures" means the series of subordinated deferrable
interest debentures to be issued by the Guarantor designated the 7.875%
Subordinated Deferrable Interest Debentures due 2048 held by the Property
Trustee (as defined in the Declaration) of the Trust.
"Declaration" means the Amended and Restated Declaration of
Trust, dated as of April 20, 1999, as amended, modified or supplemented from
time to time, among the trustees of the Trust named therein, the Guarantor, as
sponsor, and the Holders, from time to time, of undivided beneficial ownership
interests in the assets of the Trust.
"Global Security" means a fully registered, global Preferred
Security.
"Guarantee Event of Default" means a default by the Guarantor
on any of its payment or other obligations under this Guarantee.
<PAGE>
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Securities, to the
extent not paid by or on behalf of the Trust: (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Securities to the extent the Trust has sufficient funds available therefor
at the time, (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption, with respect to any Securities called
for redemption by the Trust, to the extent the Trust shall have sufficient funds
available therefor at the time or (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in connection
with the distribution of Debentures to the Holders in exchange for Securities as
provided in the Declaration), the lesser of (a) the aggregate of the liquidation
amount and all accumulated and unpaid Distributions on the Securities to the
date of payment, to the extent the Trust has sufficient funds available therefor
and (b) the amount of assets of the Trust remaining available for distribution
to Holders in liquidation of the Trust (in either case, the "Liquidation
Distribution").
"Guarantee Trustee" means The Chase Manhattan Bank, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.
"Holder" means any holder of Securities, as registered on the
books and records of the Trust; provided, however, that, in determining whether
the Holders of the requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder. Provided that in determining
whether the Holders of the requisite liquidation amount of Preferred Securities
have voted on any matter provided for in this Guarantee, then for the purpose of
such determination only (and not for any other purpose hereunder), if the
Preferred Securities remain in the form of one or more Global Certificates (as
defined in the Declaration), the term "Holders" shall mean the holder of the
Global Certificate acting at the direction of the Beneficial Owners (as defined
in the Declaration).
"Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Guarantee Trustee.
"Indenture" means the Indenture, dated as of February 1, 1996,
between the Guarantor (the "Company") and The Chase Manhattan Bank, formerly
known as Chemical Bank, as trustee, as amended and supplemented by the First
Supplemental Indenture dated as of February 1, 1996, and by any other indenture
supplemental thereto pursuant to which the Debentures are to be issued to the
Property Trustee (as defined in the Declaration) of the Trust.
"Majority in Liquidation Amount" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities, voting together as a single class, or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant class.
<PAGE>
In determining whether the Holders of the requisite amount of Securities have
voted, Securities which are owned by the Guarantor or any Affiliate of the
Guarantor or any other obligor on the Securities shall be disregarded for the
purpose of any such determination.
"Officers' Certificate" means, with respect to any Person, a
certificate signed on behalf of such Person by two Authorized Officers (as
defined in the Declaration) of such Person. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
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 on behalf of
such Person in rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer on behalf of such Person 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 acting on behalf of such Person, such condition or covenant has
been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning specified in the
Recitals hereto.
"Redemption Price" has the meaning specified in the
Declaration.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any officer with direct responsibility for the administration of this
Guarantee and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Securities" has the meaning specified in the Recitals hereto.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
4.1.
<PAGE>
"Trust Enforcement Event" in respect of the Securities means
an Indenture Event of Default (as defined in the Indenture) has occurred and is
continuing in respect of the Debentures.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application. (a) This
Guarantee is subject to the provisions of the Trust Indenture Act that are
required to be part of this Guarantee and shall, to the extent applicable, be
governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities. (a) The Guarantor
shall provide the Guarantee Trustee (i) except while the Preferred Securities
are represented by one or more Global Securities at least one Business Day prior
to the date for payment of Distributions, a list, in such form as the Guarantee
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of the record date relating to the payment of
such Distributions, and (ii) at any other time, within 30 days of receipt by the
Guarantor of a written request from the Guarantee Trustee for a List of Holders
as of a date no more than 15 days before such List of Holders is given to the
Guarantee Trustee; provided that the Guarantor shall not be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Guarantee Trustee by the Guarantor. The
Guarantee Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it, provided
that the Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Guarantee 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 Guarantee Trustee. Within 60 days after
May 15 of each year (commencing with the year of the first anniversary of the
issuance of the Securities), the Guarantee Trustee shall provide to the Holders
of the 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 Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Guarantee Trustee. The
Guarantor shall provide to the Guarantee Trustee such documents, reports and
<PAGE>
information as required by Section 314(a) (if any) of the Trust Indenture Act
and the compliance certificate required by Section 314(a) of the Trust Indenture
Act in the form, in the manner and at the times required by Section 314(a) of
the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Guarantee that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Guarantee Event of Default; Waiver. The Holders of
a Majority in Liquidation Amount of the Securities may, by vote or written
consent, on behalf of the Holders of all of the Securities, waive any past
Guarantee Event of Default and its consequences. Upon such waiver, any such
Guarantee Event of Default shall cease to exist, and any Guarantee Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Guarantee, but no such waiver shall extend to any subsequent or other
default or Guarantee Event of Default or impair any right consequent thereon.
SECTION 2.7 Guarantee Event of Default; Notice. (a) The
Guarantee Trustee shall, within 90 days after the occurrence of a Guarantee
Event of Default, transmit by mail, first class postage prepaid, to the Holders
of the Securities, notices of all Guarantee Events of Default actually known to
a Responsible Officer of the Guarantee Trustee, unless such defaults have been
cured before the giving of such notice; provided, that the Guarantee Trustee
shall be protected in withholding such notice if and so long as a Responsible
Officer of the Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Guarantee Event of Default unless the Guarantee Trustee shall
have received written notice thereof or a Responsible Officer of the Guarantee
Trustee charged with the administration of the Declaration shall have obtained
actual knowledge thereof.
SECTION 2.8 Conflicting Interests. The Declaration shall be
deemed to be specifically described in this Guarantee for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 2.9 Disclosure of Information. The disclosure of
information as to the names and addresses of the Holders of the Securities in
accordance with Section 312 of the Trust Indenture Act, regardless of the source
from which such information was derived, shall not be deemed to be a violation
of any existing law, or any law hereafter enacted which does not specifically
refer to Section 312 of the Trust Indenture Act, nor shall the Guarantee Trustee
be held accountable by reason of mailing any material pursuant to a request made
under Section 312(b) of the Trust Indenture Act.
<PAGE>
SECTION 2.10 Guarantee Trustee May File Proofs of Claim. Upon
the occurrence of a Guarantee Event of Default, the Guarantee Trustee is hereby
authorized to (a) recover judgment, in its own name and as trustee of an express
trust, against the Guarantor for the whole amount of any Guarantee Payments
remaining unpaid and (b) file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have its claims and those of the
Holders of the Securities allowed in any judicial proceedings relative to the
Guarantor, its creditors or its property.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Guarantee Trustee.
(a) This Guarantee shall be held by the Guarantee Trustee on
behalf of the Trust for the benefit of the Holders of the Securities, and the
Guarantee Trustee shall not transfer this Guarantee to any Person except a
Holder of Securities exercising his or her rights pursuant to Section 5.4(b) or
to a Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee. The right,
title and interest of the Guarantee Trustee in and to this Guarantee shall
automatically vest in any Successor Guarantee Trustee, and such vesting and
succession of title shall be effective whether or not conveyance documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If a Guarantee Event of Default actually known to a
Responsible Officer of the Guarantee Trustee has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee for the benefit of the Holders of
the Securities.
(c) The Guarantee Trustee, before the occurrence of any
Guarantee Event of Default and after the curing of all Guarantee Events of
Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Guarantee, and no implied covenants shall be
read into this Guarantee against the Guarantee Trustee. In case a Guarantee
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6) and is actually known to a Responsible Officer of the Guarantee
Trustee, the Guarantee Trustee shall exercise such of the rights and powers
vested in it by this 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 Guarantee shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
<PAGE>
(i) prior to the occurrence of any Guarantee Event of
Default and after the curing or waiving of all such
Guarantee Events of Default that may have occurred:
(A) the duties and obligations of the
Guarantee Trustee shall be determined solely by the
express provisions of this Guarantee, and the
Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Guarantee, and no
implied covenants or obligations shall be read into
this Guarantee against the Guarantee Trustee; and
(B) in the absence of bad faith on the part
of the Guarantee Trustee, the 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 Guarantee Trustee and conforming to the
requirements of this Guarantee; but in the case of
any such certificates or opinions that by any
provision hereof are specifically required to be
furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Guarantee;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer
of the Guarantee Trustee, unless it shall be proved
that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such
judgment was made;
(iii)the Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the
Holders of not less than a Majority in Liquidation
Amount of the Securities relating to the time, method
and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any
trust or power conferred upon the Guarantee Trustee
under this Guarantee; and
(iv) no provision of this Guarantee shall require the
Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of
any of its rights or powers, if the 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 Guarantee or if
the Guarantee Trustee shall have reasonable grounds for
believing that an indemnity, reasonably satisfactory to
the Guarantee Trustee, against such risk or liability
is not reasonably assured to it under the terms of this
Guarantee.
<PAGE>
SECTION 3.2 Certain Rights of Guarantee Trustee. (a) Subject
to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting
upon, any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties;
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee shall be sufficiently evidenced by an
Officers' Certificate;
(iii)Whenever, in the administration of this Guarantee, the
Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or
omitting any action hereunder, the Guarantee Trustee
(unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall
be promptly delivered by the Guarantor;
(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration or any instrument (or
any rerecording, refiling or re-registration thereof);
(v) The Guarantee Trustee may consult with counsel, and the
advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and
protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance
with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and
may include any of its employees. The Guarantee Trustee
shall have the right at any time to seek instructions
concerning the administration of this Guarantee from
any court of competent jurisdiction;
(vi) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the
Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Guarantee Trustee,
against the costs, expenses (including attorneys' fees
and expenses and the expenses of the 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
Guarantee Trustee; provided, that nothing contained in
this Section 3.2(a)(vi) shall be taken to relieve the
Guarantee Trustee, upon the occurrence of a Guarantee
Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee;
(vii)The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument,
<PAGE>
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or
matters as it may see fit;
(viii) The 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 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 Guarantee Trustee or its agents
hereunder shall bind the Holders, and the signature of
the 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 Guarantee Trustee to so act or as to
its compliance with any of the terms and provisions of
this Guarantee, both of which shall be conclusively
evidenced by the Guarantee Trustee's or its agent's
taking such action; and
(x) Whenever in the administration of this Guarantee the
Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the
Guarantee Trustee (i) may request written instructions
from the Holders of a Majority in Liquidation Amount of
the Securities, (ii) may refrain from enforcing such
remedy or right or taking such other action until such
written instructions are received and (iii) shall be
protected in conclusively relying on or acting in
accordance with such written instructions.
(b) No provision of this Guarantee shall be deemed to impose
any duty or obligation on the 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 Guarantee Trustee
shall be unqualified or incompetent to act 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 Guarantee Trustee
shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of
Guarantee. The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representations as to the validity or sufficiency of this Guarantee.
<PAGE>
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility.
(a) There shall be at all times a 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 other Person permitted by the Securities
and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision
or examination by federal, state, territorial or
District of Columbia authority. If such corporation
publishes reports of condition at least annually,
pursuant to law or to the requirements of the
supervising or examining authority referred to above,
then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and 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 Guarantee
Trustee.
(a) Subject to Section 4.2(b), unless a Guarantee Event of
Default shall have occurred and be continuing, the Guarantee Trustee may be
appointed or removed with or without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Guarantee Trustee has been appointed and
has accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold such
office until a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee.
<PAGE>
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of removal or resignation,
the removed or resigning Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, appoint
a Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or
resignation of the Guarantee Trustee pursuant to this Section 4.2, the Guarantor
shall pay to the Guarantee Trustee all amounts owing for fees and reimbursement
of expenses which have accrued to the date of such termination, removal or
resignation.
ARTICLE 5
GUARANTEE
SECTION 5.1 Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Trust), as and when due, regardless of any defense,
right of set-off or counterclaim that the Trust may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Trust to pay such amounts to the Holders. Notwithstanding anything to the
contrary herein, the Guarantor retains all of its rights under the Indenture to
(i) extend the interest payment period on the Debentures and the Guarantor shall
not be obligated hereunder to make any Guarantee Payments during any Extension
Period (as defined in the certificate evidencing the Debentures) with respect to
the Distributions (as defined in the Declaration) on the Securities and (ii)
change the maturity date of the Debentures to the extent permitted by the
Indenture.
SECTION 5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this
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 Trust 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 Guarantee shall be absolute and unconditional and shall
remain in full force and effect until the entire liquidation amount of all
<PAGE>
outstanding Securities shall have been paid and such obligation shall in no way
be affected or impaired by reason of the happening from time to time of any
event, including without limitation, the following, whether or not with notice
to, or the consent of, the Guarantor:
(a) The release or waiver, by operation of law or otherwise,
of the performance or observance by the Trust of any express or implied
agreement, covenant, term or condition relating to the Securities to be
performed or observed by the Trust;
(b) The extension of time for the payment by the Trust of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with the Securities
(other than an extension of time for payment of Distributions,
Redemption Price, Liquidation Distribution or other sum payable that
results from the extension of any interest payment period on the
Debentures or any change to the maturity date of the Debentures
permitted by the Indenture);
(c) Any failure, omission, delay or lack of diligence on the
part of the Property Trustee or the Holders to enforce, assert or
exercise any right, privilege, power or remedy conferred on the
Property Trustee or the Holders pursuant to the terms of the
Securities, or any action on the part of the Trust 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 Trust or any of the assets of the Trust;
(e) Any invalidity of, or defect or deficiency in, the
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 Guarantee Trustee or the
Holders to give notice to, or obtain consent of the Guarantor or any other
Person with respect to the happening of any of the foregoing.
<PAGE>
No setoff, counterclaim, reduction or diminution of any
obligation, or any defense of any kind or nature that the Guarantor has or may
have against any Holder shall be available hereunder to the Guarantor against
such Holder to reduce the payments to it under this Guarantee.
SECTION 5.4 Rights of Holders.
(a) The Holders of at least a Majority in Liquidation Amount
of the Securities 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 this Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under this Guarantee.
(b) If the Guarantee Trustee fails to enforce this Guarantee,
then any Holder of Securities may, subject to the subordination provisions of
Section 6.2, institute a legal proceeding directly against the Guarantor to
enforce the Guarantee Trustee's rights under this Guarantee without first
instituting a legal proceeding against the Trust, the Guarantee Trustee or any
other person or entity. In addition, if the Guarantor has failed to make a
Guarantee Payment, a Holder of Securities may, subject to the subordination
provisions of Section 6.2, directly institute a proceeding against the Guarantor
for enforcement of the Guarantee for such payment to the Holder of the
Securities of the principal of or interest on the Debentures on or after the
respective due dates specified in the Debentures, and the amount of the payment
will be based on the Holder's pro rata share of the amount due and owing on all
of the Securities. The Guarantor hereby waives any right or remedy to require
that any action on this Guarantee be brought first against the Trust or any
other person or entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment.
This 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 of Securities against the Trust in respect of any amounts paid to
such Holders by the Guarantor under this 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 Guarantee, if at the time of any such payment,
any amounts are due and unpaid under this 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
Guarantee Trustee for the benefit of the Holders.
SECTION 5.7 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee notwithstanding the
occurrence of any event referred to in subsections 5.3(a) through 5.3(g),
inclusive, hereof.
<PAGE>
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
So long as any Securities remain outstanding, if (i) there
shall have occurred an event of default under the Indenture with respect to the
Debentures, (ii) there shall be a Guarantee Event of Default or (iii) the
Guarantor shall have given notice of its election of an Extension Period as
provided in the certificate evidencing the Debentures and shall not have
rescinded such notice, or such Extension Period or any extension thereof shall
be continuing, then the Guarantor shall not, and shall not permit any subsidiary
of the Guarantor, to (x) 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 or (y) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Guarantor that rank on a parity with or junior in interest to the Debentures or
make any guarantee payments with respect to any guarantee by the Guarantor of
the debt securities of any subsidiary of the Guarantor if such guarantee ranks
on a parity with or junior in interest to the Debentures (other than (a)
dividends or distributions in common stock of the Guarantor, (b) payments under
this Guarantee, (c) any declaration of a dividend in connection with the
implementation of a shareholders' 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, and (d) purchases of common stock related to the issuance of
common stock or rights under any of the Guarantor's benefit plans).
SECTION 6.2 Ranking.
This Guarantee will constitute an unsecured obligation of the
Guarantor and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Guarantor, (ii) on a parity with the most senior
preferred or preference stock now or hereafter issued by the Guarantor and with
any guarantee now or hereafter entered into by the Guarantor in respect of any
preferred securities of any Affiliate of the Guarantor and (iii) senior to the
Guarantor's common stock. In addition, at all times such obligations will be
structurally subordinated to the liabilities and obligations of the Guarantor's
subsidiaries.
SECTION 6.3 Subordination of Common Securities.
If a Trust Enforcement Event has occurred and is continuing
under the Declaration, the rights of the holders of the Common Securities to
receive Guarantee Payments hereunder shall be subordinated to the rights of the
Holders of the Preferred Securities to receive Guarantee Payments under this
Guarantee.
<PAGE>
ARTICLE 7
TERMINATION
SECTION 7.1 Termination.
This Guarantee shall terminate upon (i) full payment of the
Redemption Price of all Securities, (ii) distribution of the Debentures to the
Holders of all the Securities or (iii) full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Trust. Notwithstanding
the foregoing, this Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Securities must
restore payment of any sums paid under the Securities or under this Guarantee.
ARTICLE 8
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, liability, expense or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this 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 Guarantee or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's negligence or willful misconduct with respect to such
acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Securities might
properly be paid.
SECTION 8.2 Indemnification.
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Guarantee.
<PAGE>
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
All guarantees and agreements contained in this Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Securities
then outstanding.
SECTION 9.2 Amendments.
Except with respect to any changes that do not materially
adversely affect the rights of the Holders (in which case no consent of the
Holders will be required), this Guarantee may not be amended without the prior
approval of the Holders of not less than 66-2/3% of the aggregate liquidation
amount of the Securities. The provisions of Section 11.2 of the Declaration with
respect to meetings of, and action by written consent of, the Holders of the
Securities apply to the giving of such approval.
SECTION 9.3 Notices.
All notices provided for in this Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered by
hand, telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Guarantee Trustee, at the Guarantee
Trustee's mailing address set forth below (or such other address as the
Guarantee Trustee may give notice of to the Guarantor and the Holders
of the Securities):
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention:Francine Springer
Telecopy no.: (212) 946-8161
(b) If given to the Guarantor, at the Guarantor's mailing
addresses set forth below (or such other address as the Guarantor may
give notice of to the Guarantee Trustee and the Holders of the
Securities):
Lehman Brothers Holdings Inc.
3 World Financial Center
New York, New York 10285
Attention: Corporate Counsel
Telecopy no.: (212) 526-3774
<PAGE>
(c) If given to any Holder of Securities, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.4 Benefit.
This Guarantee is solely for the benefit of the Holders of the
Securities and, subject to Section 3.1(a), is not separately transferable from
the Securities.
SECTION 9.5 Governing Law.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, this Guarantee is executed as of the day
and year first above written.
LEHMAN BROTHERS HOLDINGS INC.,
as Guarantor
By: /s/ Jennifer Marre
Name: Jennifer Marre
Title: Vice President
THE CHASE MANHATTAN BANK
as Guarantee Trustee
By: /s/ Francine Springer
Name: Francine Springer
Title: Assistant Vice President
<PAGE>
CROSS REFERENCE TABLE*
Section of Trust Section of
Indenture Act of Guarantee
1939, as amended Agreement
310(a)..............................................................4.1(a)
310(b).........................................................2.8; 4.1(c)
310(c)........................................................Inapplicable
311(a)..............................................................2.2(b)
311(b)..............................................................2.2(b)
311(c)........................................................Inapplicable
312(a).........................................................2.2(a); 2.9
312(b).........................................................2.2(b); 2.9
312(c).................................................................2.9
313(a).................................................................2.3
313(b).................................................................2.3
313(c).................................................................2.3
313(d).................................................................2.3
314(a).................................................................2.4
314(b)........................................................Inapplicable
314(c).................................................................2.5
314(d)........................................................Inapplicable
314(e).................................................................2.5
314(f)........................................................Inapplicable
315(a)......................................................3.1(d); 3.2(a)
315(b)..............................................................2.7(a)
315(c)..............................................................3.1(c)
315(d)..............................................................3.1(d)
316(a).........................................................2.6; 5.4(a)
316(b)................................................................ 5.3
316(c)....................................................... Inapplicable
317(a)................................................................2.10
317(b)........................................................Inapplicable
318(a)..............................................................2.1(b)
* This Cross-Reference Table does not constitute part of the Agreement and shall
not have any bearing upon the interpretation of any of its terms or provisions.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1INTERPRETATION AND DEFINITIONS......................................1
SECTION 1.1 Interpretation and Definitions..............................1
ARTICLE 2TRUST INDENTURE ACT.................................................5
SECTION 2.1 Trust Indenture Act; Application............................5
SECTION 2.2 Lists of Holders of Securities..............................5
SECTION 2.3 Reports by Guarantee Trustee................................5
SECTION 2.4 Periodic Reports to Guarantee Trustee.......................6
SECTION 2.5 Evidence of Compliance with Conditions Precedent............6
SECTION 2.6 Guarantee Event of Default; Waiver..........................6
SECTION 2.7 Guarantee Event of Default; Notice..........................6
SECTION 2.8 Conflicting Interests.......................................6
SECTION 2.9 Disclosure of Information...................................6
SECTION 2.10 Guarantee Trustee May File Proofs of Claim.................7
ARTICLE 3POWERS, DUTIES AND RIGHTS OFGUARANTEE TRUSTEE.......................7
SECTION 3.1 Powers and Duties of Guarantee Trustee......................7
SECTION 3.2 Certain Rights of Guarantee Trustee.........................9
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee......10
ARTICLE 4GUARANTEE TRUSTEE..................................................11
SECTION 4.1 Guarantee Trustee; Eligibility.............................11
SECTION 4.2 Appointment, Removal and Resignation of Guarantee Trustee..11
ARTICLE 5GUARANTEE..........................................................12
SECTION 5.1 Guarantee..................................................12
SECTION 5.2 Waiver of Notice and Demand................................13
SECTION 5.3 Obligations Not Affected...................................13
SECTION 5.4 Rights of Holders..........................................14
SECTION 5.5 Guarantee of Payment.......................................14
SECTION 5.6 Subrogation................................................14
SECTION 5.7 Independent Obligations....................................15
ARTICLE 6LIMITATION OF TRANSACTIONS; SUBORDINATION..........................15
SECTION 6.1 Limitation of Transactions.................................15
SECTION 6.2 Ranking....................................................15
SECTION 6.3 Subordination of Common Securities.........................16
ARTICLE 7TERMINATION........................................................16
SECTION 7.1 Termination................................................16
<PAGE>
ARTICLE 8INDEMNIFICATION....................................................16
SECTION 8.1 Exculpation................................................16
SECTION 8.2 Indemnification............................................17
ARTICLE 9MISCELLANEOUS......................................................17
SECTION 9.1 Successors and Assigns.....................................17
SECTION 9.2 Amendments.................................................17
SECTION 9.3 Notices....................................................17
SECTION 9.4 Benefit....................................................18
SECTION 9.5 Governing Law..............................................18
Exhibit 8.01
[Letterhead]
April 20, 1999
Re: Issuance and Sale of Preferred
Securities by Lehman Brothers Holdings Capital Trust II
Lehman Brothers Holdings Inc.
3 World Financial Center
New York, NY 10285
Lehman Brothers Holdings Capital Trust II
3 World Financial Center
New York, NY 10285
Ladies and Gentlemen:
We have acted as special tax counsel ("Tax Counsel") to Lehman
Brothers Holdings Inc., a Delaware corporation ("Holdings"), and Lehman Brothers
Holdings Capital Trust II, a statutory business trust created under the laws of
the State of Delaware (the "Trust"), in connection with the preparation of the
Prospectus Supplement, dated April 15, 1999, to the Prospectus of Holdings,
dated March 23, 1999 (collectively, the "Prospectus") with respect to: (i) the
issuance and sale of the 7.875% Subordinated Deferrable Interest Debentures (the
"Subordinated Debentures") by Holdings pursuant to the Indenture between
Holdings and The Chase Manhattan Bank, formerly known as Chemical Bank, as
trustee (in such capacity, the "Debenture Trustee"), as amended and supplemented
(collectively, the "Indenture"); and (ii) the issuance and sale of the Preferred
Securities and Common Securities (collectively, the "Trust Securities") pursuant
to the Amended and Restated Declaration of Trust (the "Trust Agreement") among
Holdings, as sponsor, The Chase Manhattan Bank, as Property Trustee, Chase
Manhattan Bank Delaware, as Delaware Trustee and the Regular Trustees named
therein. The Common Securities and Preferred Securities are guaranteed by
Holdings with respect to the payment of distributions and payments upon
liquidation, redemption and otherwise pursuant to, and to the extent set forth
in, the Guarantee Agreement (the "Guarantee") between Holdings and The Chase
Manhattan Bank, as trustee (in such capacity, the "Guarantee Trustee"), for the
benefit of the holders of the Common Securities and Preferred Securities. The
Preferred Securities will be offered for sale to investors pursuant to the
Prospectus.
<PAGE>
All capitalized terms used in this opinion letter and not
otherwise defined herein shall have the meaning ascribed to such terms in the
Prospectus.
In delivering this opinion letter, we have reviewed and relied
upon: (i) the Prospectus; (ii) the Indenture; (iii) a form of the Subordinated
Debentures; (iv) a form of the Trust Agreement; (v) a form of the Guarantee; and
(vi) forms of the Trust Securities. We also have examined and relied upon
originals or copies, certified or otherwise identified to our satisfaction, of
such records of Holdings and the Trust and such other documents, certificates
and records as we have deemed necessary or appropriate as a basis for the
opinions set forth herein.
In our examination of such material, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity to original documents of all copies of documents
submitted to us. In addition, we also have assumed that the transactions related
to the issuance of the Subordinated Debentures and the Trust Securities will be
consummated in accordance with the terms of the documents and forms of documents
described herein.
On the basis of the foregoing and assuming that the Trust was
formed and will be maintained in compliance with the terms of the Trust
Agreement, we hereby confirm our opinions set forth in the Prospectus under the
caption "Certain United States Federal Income Tax Consequences."
We express no opinion with respect to the transactions referred
to herein or in the Prospectus other than as expressly set forth herein.
Moreover, we note that there is no authority directly on point dealing with
securities such as the Preferred Securities or transactions of the type
described herein and that our opinion is not binding on the Internal Revenue
Service or the courts, either of which could take a contrary position.
Nevertheless, we believe that if challenged, the opinions we express herein
would be sustained by a court with jurisdiction in a properly presented case.
Our opinion is based upon the Internal Revenue Code of 1986, as
amended, the Treasury regulations promulgated thereunder and other relevant
authorities and law, all as in effect on the date hereof. Consequently, future
changes in the law may cause the tax treatment of the transactions referred to
herein to be materially different from that described above.
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the federal law of the
United States.
We hereby consent to the use of our name in the Prospectus under
the caption "Certain United States Federal Income Tax Consequences."
Very truly yours,
/s/ SIMPSON THACHER & BARTLETT
