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):
January 26, 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
<PAGE>
Item 7. Financial Statements and Exhibits
(c) Exhibits
The following Exhibits are incorporated by reference into the Registration
Statement on Form S-3 (Registration No. 333-50197) as exhibits thereto and are
filed as part of this Report.
4.1 Second Supplemental Indenture, dated as January 26, 1999, between Lehman
Brothers Holdings Inc. (the "Corporation") and The Chase Manhattan Bank, as
trustee.
4.2 8.00% Subordinated Deferrable Interest Debenture due 2048.
4.3 Amended and Restated Trust Agreement, dated as of January 26, 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.
4.4 Certificates Evidencing Preferred Securities.
4.5 Guarantee Agreement, dated as of January 26, 1999, between the Corporation
and The Chase Manhattan Bank, as trustee.
8.1 Opinion and consent of Simpson Thacher & Bartlett regarding certain tax
matters.
<PAGE>
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: January 27, 1999
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
4.1 Second Supplemental Indenture, dated as January 26, 1999, between Lehman
Brothers Holdings Inc. (the "Corporation") and The Chase Manhattan Bank, as
trustee.
4.2 8.00% Subordinated Deferrable Interest Debenture due 2048.
4.3 Amended and Restated Trust Agreement, dated as of January 26, 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.
4.4 Certificates Evidencing Preferred Securities.
4.5 Guarantee Agreement, dated as of January 26, 1999, between the Corporation
and The Chase Manhattan Bank, as trustee.
8.1 Opinion and consent of Simpson Thacher & Bartlett regarding certain tax
matters.
Exhibit 4.1
LEHMAN BROTHERS HOLDINGS INC.
AND
THE CHASE MANHATTAN BANK,
as Trustee
-----------------------
SECOND SUPPLEMENTAL INDENTURE
Dated as of January 26, 1999
------------------------
<PAGE>
THIS SECOND SUPPLEMENTAL INDENTURE, dated as of January 26,
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 I, a Delaware statutory business trust ("Trust
I"), a series of Securities entitled the "8.00% Subordinated Deferrable Interest
Debentures due 2048" (the "Subordinated Debentures");
WHEREAS, the Company has duly authorized the execution and
delivery of this Second 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 Second
Supplemental Indenture a valid agreement of the Company according to its terms
have been done and performed, and the execution and delivery of this Second
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 8.00% Subordinated Deferrable
Interest Debentures due 2048.
"Declaration" means the Amended and Restated Declaration of Trust,
dated as of January 26, 1999 among the Company and the trustees named
therein.
<PAGE>
"Trust I" means Lehman Brothers Capital Trust I, 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 I 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 I to
holders of its securities in liquidation of such holders' interests in
Trust I, (ii) redemption of all of the securities issued by Trust I,
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
I, the consent of not less than 66 2/3% of the aggregate liquidation
amount of the securities issued by Trust I 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 I, the consent of not less than a majority of the aggregate
liquidation amount of the securities issued by Trust I 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
I, the consent of not less than a majority of the aggregate
liquidation amount of the securities issued by Trust I 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.
<PAGE>
The Company shall, for so long as Trust I is in existence: (i) maintain
directly or indirectly 100% ownership of the common securities of Trust I, (ii)
cause Trust I to remain a 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
I 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 I 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 I) and all costs and expenses of Trust I (including, but not limited to,
all costs and expenses relating to the organization of Trust I, the fees and
expenses of the trustees and all costs and expenses relating to the operation of
Trust I ) and to pay any and all taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed on Trust I by
the United States, or any other taxing authority, so that the net amounts
received and retained by Trust I after paying such expenses will be equal to the
amounts Trust I would have received had no such costs or expenses been incurred
by or imposed on the Trust I. 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 I 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 Second 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 Second Supplemental Indenture
supplements the Indenture and shall be a part of and subject to all the terms
thereof. The Indenture, as supplemented by this Second 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 Second 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 Second Supplemental Indenture shall be governed by
and construed in accordance with the laws of the State of New York.
<PAGE>
2.6 Defined Terms. All capitalized terms used in this Second 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 Second 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
Second Supplemental Indenture declared and provided, upon the terms and
conditions hereinabove set forth.
<PAGE>
IN WITNESS WHEREOF, Lehman Brothers Holdings Inc. has caused this Second
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 its corporate seal to be affixed hereunto, and the same to
be attested by its Secretary, its Assistant Secretary or one of its Attesting
Secretaries, and The Chase Manhattan Bank, as Trustee, has caused this Second
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/ Karen Muller
Attest:
- ----------------------------------
THE CHASE MANHATTAN BANK, as Trustee
By: /s/ Francine Springer
Attest:
- ----------------------------------
Exhibit 4.2
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 $309,278,375
LEHMAN BROTHERS HOLDINGS INC.
8.00% 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 I (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 NINE MILLION
TWO HUNDRED SEVENTY-EIGHT THOUSAND THREE HUNDRED SEVENTY-FIVE DOLLARS on March
31, 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 March 31, 1999,
from January 26, 1999 or the most recent Interest Payment Date to which interest
has been paid or duly provided for.
<PAGE>
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.
<PAGE>
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 under its corporate seal, attested by
its Secretary or one of its Assistant Secretaries by manual or facsimile
signature.
LEHMAN BROTHERS HOLDINGS INC.
By: /s/ Karen Muller
Karen Muller
Vice President
Attest:
/s/ Eileen Bannon
Eileen Bannon
Assistant Secretary
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated: January 26, 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.
8.00% SUBORDINATED DEFERRABLE INTEREST DEBENTURE DUE 2048
This Debenture is one of a duly authorized series of Debentures of the
Company designated as the 8.00% 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 $309,278,375. 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 March
31, 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 January 26, 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.
<PAGE>
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
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).
<PAGE>
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
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.
<PAGE>
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 March 31, 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
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 March 31, 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
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
<PAGE>
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.
<PAGE>
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:__________________________________
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 4.3
AMENDED AND RESTATED DECLARATION OF TRUST
THIS AMENDED AND RESTATED DECLARATION OF TRUST
("Declaration"), dated as of January 26, 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 I (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;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
<PAGE>
(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.
"Direct Action" has the meaning specified in Section 3.8(e).
<PAGE>
"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 January 26, 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 the Second Supplemental Indenture,
dated as of January 26, 1999, pursuant to which the Debentures are to be issued.
"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.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
<PAGE>
"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 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.
<PAGE>
"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 January 21,
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.
(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.
<PAGE>
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.
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.
<PAGE>
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 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.
<PAGE>
(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
I" 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.
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.
<PAGE>
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:
<PAGE>
(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;
(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;
<PAGE>
(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:
(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
<PAGE>
(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.
(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;
(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;
<PAGE>
(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.
(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:
<PAGE>
(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 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:
<PAGE>
(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.
(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:
<PAGE>
(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 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;
<PAGE>
(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;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
<PAGE>
(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, 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;
<PAGE>
(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;
(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;
<PAGE>
(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.
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.
<PAGE>
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;
(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;
<PAGE>
(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 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.
<PAGE>
(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.
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.
<PAGE>
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.
ARTICLE 5
TRUST COMMON SECURITIES HOLDER
SECTION 5.1 Debenture Issuer's Purchase of Common Securities.
<PAGE>
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 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:
<PAGE>
(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 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.
<PAGE>
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
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.
<PAGE>
(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 until a Successor Delaware
Trustee has been appointed and has accepted such appointment
by instrument executed by such Successor Delaware Trustee
and delivered to the Trust, the Sponsor and the resigning
Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Delaware Trustee or Successor Property Trustee, as
the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 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.
(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.
<PAGE>
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.
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.
<PAGE>
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 THREE HUNDRED MILLION dollars ($300,000,000) 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 8.00% Preferred Securities, Series I
(the "Preferred Securities"). The Preferred Security Certificates
evidencing the Preferred Securities shall be substantially in the form
of Exhibit A to this 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.
<PAGE>
(ii Common Securities. The Common Securities of the Trust have an
aggregate liquidation amount with respect to the assets of the Trust
of NINE MILLION TWO HUNDRED SEVENTY EIGHT THOUSAND THREE HUNDRED AND
SEVENTY-FIVE dollars ($9,278,375) 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 8.00% Common Securities, Series I (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.
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).
<PAGE>
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.
SECTION 7.2 Distributions.
(a Holders of Securities shall be entitled to receive cumulative cash
Distributions at the rate per annum of 8.00% 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 March 31, 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 8.00% per annum ("Compounded Distributions").
"Distributions" shall mean ordinary cumulative distributions together with any
Compounded Distributions.
<PAGE>
(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
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.
<PAGE>
(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
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.
<PAGE>
(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.
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.
<PAGE>
(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 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.
<PAGE>
(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.
(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.
<PAGE>
(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.
(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.
<PAGE>
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.
(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.
<PAGE>
(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.
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.
<PAGE>
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.
Unless this Preferred Security Certificate is presented by an authorized
representative of the Depositary to Household Capital Trust III 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.
<PAGE>
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.
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.
<PAGE>
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 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
<PAGE>
(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 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:
<PAGE>
(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.
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.
<PAGE>
(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.
(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.
<PAGE>
(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.
(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.
<PAGE>
(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.
(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.
<PAGE>
(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.
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.
<PAGE>
(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 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
<PAGE>
(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.
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.
<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. Number of Preferred Securities: 12,000,000
CUSIP No. 52518B200
Certificate Evidencing Preferred Securities
of
Lehman Brothers Holdings Capital Trust I
8.00 % Preferred Securities, Series I
(liquidation amount $25 per Preferred
Security)
<PAGE>
Lehman Brothers Holdings Capital Trust I, 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 12,000,000 preferred
securities of the Trust representing undivided beneficial ownership interests in
the assets of the Trust designated the 8.00% Preferred Securities, Series I
(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 January 26, 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. 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 26th day
of January, 1999.
LEHMAN BROTHERS HOLDINGS
CAPITAL TRUST I
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. Number of Common Securities: 371,135
Certificate Evidencing Common Securities
of
Lehman Brothers Holdings Capital Trust I
8.00% Common Securities, Series I
(liquidation amount $25 per Common Security)
Lehman Brothers Holdings Capital Trust I, 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 common
securities of the Trust representing an undivided beneficial ownership interest
in the assets of the Trust designated the 8.00% Common Securities , Series I
(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 January 26, 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 ____ day
of January, 1999. LEHMAN BROTHERS HOLDINGS
CAPITAL TRUST I
By:__________________________
Name:
Title: Regular Trustee
<PAGE>
EXECUTION COPY
AMENDED AND RESTATED DECLARATION OF TRUST
Lehman Brothers Holdings Capital Trust I
Dated as of January 26, 1999
<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 constitute part of the Agreement
and shall not have any bearing upon the interpretation of any of its
terms or provisions.
* 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 1 INTERPRETATION 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 of Default.......................................4
Investment Company...............................................4
Investment Company Act...........................................4
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 2 TRUST INDENTURE ACT...............................................8
SECTION 2.1 Trust Indenture Act; Application.............................8
SECTION 2.2 Lists of Holders of Securities...............................9
SECTION 2.3 Reports by the Property Trustee..............................9
SECTION 2.4 Periodic Reports to 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
ARTICLE 3 ORGANIZATION.....................................................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 4 SPONSOR..........................................................28
SECTION 4.1 Responsibilities of the Sponsor.............................28
SECTION 4.2 Indemnification and Fees and Expenses of the Trustee........28
ARTICLE 5 TRUST 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 6 TRUSTEES.........................................................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 Business.....................................34
ARTICLE 7 TERMS 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
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 8 DISSOLUTION 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 9 LIMITATION 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 10 ACCOUNTING......................................................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 11 AMENDMENTS AND MEETINGS.........................................55
SECTION 11.1 Amendments.................................................55
SECTION 11.2 Meetings of the Holders of Securities;
Action by Written Consent..................................57
ARTICLE 12 REPRESENTATIONS 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 13 MISCELLANEOUS...................................................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 4.4
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. 52518B200
Certificate Evidencing Preferred Securities
of
Lehman Brothers Holdings Capital Trust I
8.00 % Preferred Securities, Series I
(liquidation amount $25 per Preferred
Security)
<PAGE>
Lehman Brothers Holdings Capital Trust I, 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 8.00% Preferred Securities, Series I
(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 January 26, 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. 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.
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this 26th day
of January, 1999.
LEHMAN BROTHERS HOLDINGS
CAPITAL TRUST I
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: 2,000,000
CUSIP No. 52518B200
Certificate Evidencing Preferred Securities
of
Lehman Brothers Holdings Capital Trust I
8.00 % Preferred Securities, Series I
(liquidation amount $25 per Preferred
Security)
<PAGE>
Lehman Brothers Holdings Capital Trust I, 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 2,000,000 preferred
securities of the Trust representing undivided beneficial ownership interests in
the assets of the Trust designated the 8.00% Preferred Securities, Series I
(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 January 26, 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. 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.
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this 26th day
of January, 1999.
LEHMAN BROTHERS HOLDINGS
CAPITAL TRUST I
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 4.5
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Guarantee"), dated as of
January 26, 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 I, 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 is issuing on the date hereof $300,000,000 aggregate liquidation amount of
preferred securities, having a liquidation amount of $25 per security and
designated the 8.00% Preferred Securities, Series I of the Trust (the "Preferred
Securities") and $9,278,351 aggregate liquidation amount of common securities,
having a liquidation amount of $25 per security and designated the 8.00% Common
Securities of the Trust (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;
(b) a term defined anywhere in this Guarantee has the same meaning
throughout;
<PAGE>
(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 8.00%
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 January 26, 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.
<PAGE>
"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. 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.
<PAGE>
SECTION 2.4 Periodic Reports to Guarantee Trustee. The Guarantor shall
provide to the Guarantee Trustee such documents, reports and 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.
<PAGE>
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.
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.
<PAGE>
(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:
(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
<PAGE>
(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.
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;
<PAGE>
(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, 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.
<PAGE>
(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.
(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.
<PAGE>
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 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
<PAGE>
(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.
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.
<PAGE>
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.
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.
<PAGE>
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.
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.
<PAGE>
(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.
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):
<PAGE>
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention:________________
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
(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.
<PAGE>
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>
EXECUTION COPY
- --------------------------------------------------------------------------------
GUARANTEE AGREEMENT
Lehman Brothers Holdings Capital Trust I
Dated as of January 26, 1999
- --------------------------------------------------------------------------------
<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)
<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
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 8.1
January 25, 1999
Re: Issuance and Sale of Preferred
Securities by Lehman Brothers Holdings Capital Trust I
Lehman Brothers Holdings Inc.
3 World Financial Center
New York, NY 10285
Lehman Brothers Holdings Capital Trust I
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 I, 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 January 20, 1999, to the Prospectus of Holdings, dated July
21, 1998 (collectively, the "Prospectus") with respect to: (i) the issuance and
sale of the Junior 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.
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 Junior 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.
<PAGE>
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 Junior 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.
<PAGE>
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
SIMPSON THACHER & BARTLETT
