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UNITED STATES
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)
March 21, 1997 (March 20, 1997)
DELPHI FINANCIAL GROUP, INC.
(Exact name of Registrant as Specified in its Charter)
001-11462
(Commission File Number)
DELAWARE 13-3427277
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1105 North Market Street
Suite 1230
Wilmington, Delaware 19899
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (302) 478-5142
N/A
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On March 20, 1997, Delphi Financial Group, Inc. ("Delphi") announced
the offering of $100 million of 9.31% Series A Capital Securities. The
securities will be issued through Delphi Funding L.L.C., a unit of Delphi, and
will mature in 2027. The offering is being underwritten by Goldman, Sachs & Co.
Closing of the transaction is expected on March 25, 1997. Delphi will use the
proceeds from the offering to repay $50 million principal amount of revolving
bank debt and the remainder for general corporate purposes.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
1 Form of Underwriting Agreement (including Form of Pricing
Agreement).
4(a) Form of Amended and Restated Limited Liability Company
Agreement of Delphi Funding L.L.C.
4(b) Form of Indenture relating to 9.31% Junior Subordinated
Deferrable Interest Debentures, Series A.
4(c) Form of Guarantee Agreement.
12 Statement of Computation of Ratio of Earnings to Fixed
Charges.
25 Form T-1 Statement of Eligibility and Qualification of
Wilmington Trust Company under the Trust Indenture Act of
1939, as amended.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DELPHI FINANCIAL GROUP, INC.
Dated: March 21, 1997 By: /s/ ROBERT M. SMITH, JR.
------------------------
Robert M. Smith, Jr.
Vice President
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Exhibit 1
DELPHI FUNDING L.L.C.
Preferred Securities
guaranteed to the extent set forth in the Guarantees by
Delphi Financial Group, Inc.
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Underwriting Agreement
March 20, 1997
Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
From time to time Delphi Funding L.L.C., a limited liability company formed
under the laws of the State of Delaware (the "LLC"), and Delphi Financial Group,
Inc., a Delaware corporation (the "Company"), as the direct or indirect owner of
the common interests of LLC (the "Common Securities") and as guarantor, propose
to enter into one or more Pricing Agreements (each a "Pricing Agreement") in the
form of Annex I hereto, with such additions and deletions as the parties thereto
may determine, and, subject to the terms and conditions stated herein and
therein, that the LLC issue and sell to the firms named in Schedule I to the
applicable Pricing Agreement (such firms constituting the "Underwriters" with
respect to such Pricing Agreement and the securities specified therein) certain
of its preferred limited liability company interests (the "Securities"). The
Securities specified in such Pricing Agreement are referred to as the "Firm
Designated Securities" with respect to such Pricing Agreement. If specified in
such Pricing Agreement, the LLC may grant the Underwriters the right to purchase
at their election an additional number of Securities, specified as provided in
such Pricing Agreement as provided in Section 3 hereof (the "Optional Designated
Securities"). The Firm Designated Securities and any Optional Designated
Securities are collectively called the "Designated Securities." The proceeds of
the sale of the Designated Securities to the public and of Common Securities of
the LLC to the Company or a wholly-owned subsidiary of the Company concurrently
with the sale of the Designated Securities are to be invested in junior
subordinated deferrable interest debentures of the Company (the "Subordinated
Debentures") identified in the Pricing Agreement with respect to such Designated
Securities (with respect to such Pricing Agreement, the "Designated Subordinated
Debentures"), to be issued pursuant to a junior subordinated indenture to be
dated as of March 25, 1997 (the "Indenture") between the Company and Wilmington
Trust Company, as trustee (the "Indenture Trustee"). The Designated Securities
may be exchangeable into Designated Subordinated Debentures, as specified in
Schedule II to such Pricing Agreement. The Designated Securities will be
guaranteed by the Company to the extent set
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forth in the Prospectus (as defined below) with respect to such Designated
Securities (the "Designated Guarantee") (all such Designated Guarantees
together, the "Guarantees").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the amended and restated limited liability company agreement (the
"LLC Agreement") identified in such Pricing Agreement (with respect to such
Pricing Agreement, the "LLC Agreement") .
1. Particular sales of Designated Securities may be made from time to time
to the Underwriters of such Designated Securities, for whom the firms designated
as representatives of the Underwriters of such Designated Securities in the
Pricing Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters and to Underwriters who act
without any firm being designated as their representative. This Underwriting
Agreement shall not be construed as an obligation of the LLC to sell any of the
Securities or as an obligation of any of the Underwriters to purchase any of the
Securities. The obligation of the LLC to issue and sell any of the Securities
and the obligation of any of the Underwriters to purchase any of the Securities
shall be evidenced by the Pricing Agreement with respect to the Designated
Securities specified therein. Each Pricing Agreement shall specify the aggregate
number of the Firm Designated Securities, the maximum number of Optional
Designated Securities, if any, the initial public offering price of such Firm
and Optional Designated Securities or the manner of determining such price, the
terms of the Designated Securities, including the terms on which and terms of
the securities into which the Designated Securities will be exchangeable, the
purchase price to the Underwriters of such Designated Securities, the names of
the Underwriters of such Designated Securities, the names of the Representatives
of such Underwriters, the number of such Designated Securities to be purchased
by each Underwriter and the commission, if any, payable to the Underwriters with
respect thereto and shall set forth the date, time and manner of delivery of
such Firm and Optional Designated Securities, if any, and payment therefor. The
Pricing Agreement shall also specify (to the extent not set forth in the
registration statement and prospectus with respect thereto) the terms of such
Designated Securities. A Pricing Agreement shall be in the form of an executed
writing (which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. The standard provisions
set forth herein will be incorporated by reference in any Pricing Agreement. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. The LLC and the Company, jointly and severally, each represents and
warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 33-77028) (the
"Initial Registration Statement") in respect of the Securities, the
Subordinated Debentures and the Guarantees (including the Designated
Securities, the Designated Subordinated Debentures and the Designated
Guarantees) has been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any post-effective
amendment thereto, each in the form heretofore delivered or to be delivered
to the Representatives and, excluding exhibits to such registration
statement, but including all documents incorporated by reference
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in the prospectus included therein, to the Representatives for each of the
other Underwriters, has been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size of
the offering (a "Rule 462(b) Registration Statement"), filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended (the "Act"), which
became effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed, or transmitted for filing, with the Commission since
the Company's annual report on Form 10-K filed with the Commission on March
5, 1997, in the form heretofore delivered to the Representatives; and no
stop order suspending the effectiveness of the Initial Registration
Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or, to the Company's knowledge, threatened by
the Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule 424(a)
under the Act is hereinafter called a "Preliminary Prospectus"; the various
parts of the Initial Registration Statement and the rule 462(b)
Registration Statement, if any, including (i) the information contained in
the form of final prospectus and other prospectuses listed above filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be
part of the Initial Registration Statement at the time it was declared
effective or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, (ii) all exhibits thereto including
those filed by 8-K and incorporated by reference and (iii) the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such part of the registration statement became
effective but excluding Forms T-1, each as amended at the time such part of
the registration statement became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus relating to the
Securities, the Subordinated Debentures and the Guarantees, in the form in
which it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, is hereinafter called
the "Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the LLC, if any, and the Company
filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the
Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the applicable
Designated Securities in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof, including any documents incorporated by reference therein as of the
date of such filing);
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(b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the LLC or the Company by an Underwriter of Designated
Securities through the Representatives expressly for use in the Prospectus as
amended or supplemented relating to such Securities;
(c) The Registration Statement and the Prospectus conform, and any further
amendments or supplements to the Registration Statement or the Prospectus will
conform, in all material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder; the Registration Statement did not as
of its effective date and will not, as of the applicable effective date of any
amendment thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; the Prospectus does not and will not, as of
its date or as of the Time of Delivery of the Designated Securities offered
thereby, include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this Section 2(b) shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the LLC or the Company by an Underwriter of
Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities;
(d) Neither the Company nor any of the Company's subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been (i)(A) any
decrease in the capital stock, (B) a net increase exceeding $3,000,000 in
short-term debt, (C) any increase in long-term debt, (D) any increase in excess
of 10% in claims and claim adjustment expense reserves (other than in the
ordinary course of business in connection with an increase in net premiums
written, if any), or (E) any decrease in excess of 10% in the combined
consolidated statutory surplus of the Company's life insurance subsidiaries and
statutory surplus of its casualty insurance subsidiary
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(other than as a result of changes in the market price of the common stock of
the Company held as part of statutory surplus), or (ii) any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus;
(e) The LLC has been duly formed and is validly existing as a limited
liability company under the Delaware Limited Liability Company Act (the
"Delaware Act") in good standing under the laws of the State of Delaware, with
power and authority to own, lease and operate its properties and conduct its
business as described in the Prospectus; the Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority (corporate and other) to own, lease
and operate its properties and conduct its business as described in the
Prospectus; at each Time of Delivery the LLC Agreement, which will be
substantially the form filed as an exhibit to the Registration Statement, will
have been duly authorized by the Company and will constitute a valid and legally
binding agreement of the Company enforceable against the Company by the members
of the LLC that hold Preferred Securities (the "Securityholders") in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles (regardless of
whether considered in a proceeding at law or in equity); the LLC Agreement will
conform in all material respects to the descriptions thereof in the Prospectus
as amended or supplemented with respect to the Designated Securities;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable; all the outstanding beneficial interests in the LLC have been
duly and validly authorized and issued, are fully paid and non-assessable and
conform in all material respects to the descriptions thereof contained in the
Prospectus;
(g) Each subsidiary of the Company which is a significant subsidiary, as
defined in Rule 405 of Regulation C of the regulations promulgated under the
1933 Act (each, a "Significant Subsidiary") has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has power and authority (corporate and other)
to own, lease and operate its properties and to conduct its business as
described in the Prospectus, and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
be in good standing would not have a material adverse effect on the general
affairs, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries considered as one enterprise; and all of the
issued and outstanding capital stock of each Significant Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable and all
such shares owned by the Company, directly or through subsidiaries, are owned
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or security, except (i) as otherwise disclosed in the Company's annual
report on Form 10-K for the year ended December 31, 1996 and (ii) for the
security interest of Bank of America National
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Trust and Savings Association, as administrative agent ("Bank of America") under
the Master Letter of Credit Agreement dated as of December 31, 1993, as amended,
among the Company, certain of its noninsurance subsidiaries, the banks party
thereto, and Bank of America, in all of the common stock of the Company's
indirect subsidiary, DFG Corporation;
(h) The Designated Securities have been duly and validly authorized by the
LLC Agreement for issuance and, when the Firm Designated Securities are issued
and delivered pursuant to this Agreement and the Pricing Agreement with respect
to such Designated Securities and, in the case of any Optional Designated
Securities, pursuant to Over-allotment Options (as defined in Section 3 hereof)
with respect to such Securities, such Designated Securities will be duly and
validly issued and fully paid and non-assessable preferred limited liability
company interests in the LLC having the rights provided by the LLC Agreement,
which will be substantially in the form filed as an exhibit to the Registration
Statement; the Designated Securities conform in all material respects to the
description thereof contained in the Registration Statement and the Designated
Securities will conform in all material respects to the description thereof
contained in the Prospectus as amended or supplemented with respect to such
Designated Securities;
(i) No holder of the Designated Securities, in its capacity as a member of
the LLC, will be obligated personally for any debt, obligation or liability of
the LLC solely by reason of being a member of the LLC;
(j) The Common Securities of the LLC have been duly and validly authorized
by the LLC Agreement for issuance and, when issued, delivered and paid for in
accordance with the LLC Agreement and as described in the Prospectus, will be
validly issued limited liability company interests in the LLC owned directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims; and the LLC is not a party to or otherwise bound by any agreement
other than those described in the Prospectus and will conform in all material
respects to the description thereof contained in the Prospectus; the issuance of
the Common Securities of the LLC is not subject to preemptive or other similar
rights; the Common Securities conform in all material respects to the
description thereof contained in the Registration Statement; and at each Time of
Delivery, all of the issued and outstanding Common Securities of the LLC will be
directly owned by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity;
(k) The Designated Guarantee, the LLC Agreement, the Designated
Subordinated Debentures and the Indenture (the Designated Guarantee, the LLC
Agreement, the Designated Subordinated Debentures and the Indenture being
collectively referred to as the "Company Agreements") have each been duly
authorized and when validly executed and delivered by the Company and, in the
case of the Designated Guarantee, by the Guarantee Trustee (as defined in the
Guarantee), and, in the case of the Indenture, by the Indenture Trustee, and, in
the case of the Designated Subordinated Debentures, when validly issued by the
Company and duly authenticated and delivered by the Indenture Trustee, will
constitute valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles; the
Indenture has been
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duly qualified under the Trust Indenture Act; the Designated Subordinated
Debentures are entitled to the benefits of the Indenture; and the Company
Agreements, which will be in substantially the form filed as an exhibit to the
Registration Statement, will conform in all material respects to the
descriptions thereof in the Prospectus as amended or supplemented with respect
to the Designated Securities to which they relate;
(l) The issue and sale of the Designated Securities by the LLC, the
compliance by the LLC with all of the provisions of this Agreement, any Pricing
Agreement and each Over-allotment Option, if any, the Designated Securities and
the LLC Agreement, the purchase of the Designated Subordinated Debentures by the
LLC, and the consummation of the transactions contemplated herein and therein
will not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the LLC is a
party or by which the LLC is bound or to which any of the property or assets of
the LLC is subject, nor will such action result in any violation of the
provisions of the LLC Agreement or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the LLC or
any of its properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency
or body is required for the issue and sale of the Designated Securities and the
Common Securities by the LLC, the purchase of the Subordinated Debentures by the
LLC or the consummation by the LLC of the transactions contemplated by this
Agreement, the Pricing Agreement or any Over-allotment Option or the LLC
Agreement, except such as have been, or will have been, prior to each Time of
Delivery (as defined in Section 4 hereof), obtained under the Act and the Trust
Indenture Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Designated Securities by
the Underwriters;
(m) The issuance by the Company of the Guarantees and the Subordinated
Debentures, the compliance by the Company with all of the provisions of this
Agreement, any Pricing Agreement and each Over-allotment Option, if any, and the
Company Agreements, the execution, delivery and performance by the Company of
this Agreement, any Pricing Agreement and the Company Agreements, and the
consummation of the transactions contemplated herein and therein will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, (x) any indenture, mortgage, deed
of trust, loan agreement or other agreement with respect to indebtedness for
money borrowed to which the Company or any of its Significant Subsidiaries is a
party or (y) any other material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the Company or the
charter or by-laws of any of its subsidiaries or the Certificate of Formation of
the LLC or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company, the LLC or any
of its subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue of the Guarantees or
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the Subordinated Debentures or the consummation by the Company of the other
transactions contemplated by this Agreement, any Pricing Agreement or the
Company Agreements, except such as have been or will have been, prior to each
Time of Delivery, obtained under the Act or the Trust Indenture Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the issuance
by the Company of the Guarantees and the Subordinated Debentures;
(n) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or any of its
subsidiaries or the LLC is a party or to which any of the properties of the
Company or any of its subsidiaries or the LLC is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described; all pending legal or governmental proceedings to which the Company or
any subsidiary or the LLC is a party or of which any of their respective
properties is the subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, would,
considered in the aggregate, not reasonably be expected to have a material
adverse effect on the general affairs, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries considered as one
enterprise; there are no statutes or regulations required to be described in the
Registration Statement or the Prospectus which are not described as required;
and there are no contracts or documents of the Company or any of its
subsidiaries which are of a character required to be described in the
Registration Statement or the Prospectus or to be filed or incorporated as
exhibits to the Registration Statement by the Act which are not described, filed
or incorporated as required;
(o) None of the LLC, the Company nor any of its subsidiaries, as
applicable, is in violation of the LLC Agreement for the LLC, the Certificate of
Formation for the LLC, or the Certificate of Incorporation or By-laws of the
Company or any of its subsidiaries or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound;
(p) The Company and its subsidiaries possess such certificates, authorities
or permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies (including, without limitation, all permits, licenses,
certificates, franchises and authorizations of all applicable insurance
regulatory agencies or bodies) necessary to conduct the business now operated by
them, except where the failure to possess such certificates, authorities or
permits would not have a material adverse effect, or a prospective material
adverse effect, on the general affairs, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries considered as one
enterprise; and neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would materially and
adversely affect the general affairs, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries considered as one
enterprise;
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(q) Neither the Company nor SIG Holdings, Inc. ("SIG") is required to be
licensed as an insurance company; Reliance Standard Life Insurance Company of
Texas ("RSLIC-Texas"), Reliance Standard Life Insurance Company ("RSLIC"), First
Reliance Standard Life Insurance Company ("FRSLIC"), and Safety National
Casualty Corporation ("SNCC"; RSLIC-Texas, RSLIC, FRSLIC and SNCC are
collectively, the "Insurance Subsidiaries") are each duly licensed as insurers
under the insurance laws and regulations of Texas, Illinois, New York, and
Missouri, respectively; and the Insurance Subsidiaries have filed with the
appropriate insurance regulatory authorities all reports, documents and other
information required to be filed under the insurance laws of Texas, Illinois,
New York, and Missouri, respectively, except as to filings the failure of which
to make, singly or in the aggregate, would not be reasonably expected to have a
material adverse effect on general affairs, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries considered
as one enterprise or on the Insurance Licenses (as defined below);
(r) Each of the Insurance Subsidiaries holds such licenses, certificates,
authorities and permits from governmental authorities (including, without
limitation, insurance licenses from the insurance regulatory agencies of the
various states where it conducts business (the "Insurance Licenses")) which are
necessary to the conduct of its insurance businesses as presently operated; the
Insurance Subsidiaries have fulfilled and performed all obligations necessary to
maintain the Insurance Licenses; there is no pending or, to the knowledge of the
Company or any Insurance Subsidiary, threatened action, suit, proceeding or
investigation that may reasonably be expected to lead to the revocation,
termination or suspension of any such license, certificate or permit (including,
without limitation, the Insurance Licenses); except, in each of the foregoing
cases, as to Insurance Licenses, the failure of which to obtain or maintain
would not be reasonably expected to have a material adverse effect on the
general affairs, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries considered as one enterprise; and
except as disclosed in the Prospectus, no insurance regulatory agency or body
has issued any order or decree (specifically applicable to one or more of the
Insurance Subsidiaries as opposed to insurance companies generally) impairing,
restricting or prohibiting the payment of dividends by any of the Insurance
Subsidiaries to their respective parent companies;
(s) None of the Company or any Insurance Subsidiary is aware of any
threatened or pending downgrading in the A.M. Best Company, Inc. ("A.M. Best")
rating of any Insurance Subsidiary.
(t) All reinsurance treaties, contracts, agreements and arrangements to
which any Insurance Subsidiary is a party are in full force and effect, other
than those that, by their terms, have expired or otherwise terminated, and none
of the Company or any of its subsidiaries is in violation of, or in default in
the performance, observance or fulfillment of, any material obligation,
agreement, covenant or condition contained therein, which violation or default
would, singly or in the aggregate, reasonably be expected to have a material
adverse effect on the general affairs, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, considered as one
enterprise; none of the Company or any of its subsidiaries has received any
notice from any of the other parties to such treaties, contracts, agreements
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<PAGE> 10
or arrangements that such other party intends not perform in any material
respect such treaty, contract, agreements or arrangements will be unable to
perform such treaty, contract, agreement or arrangement where the failure to
perform would have a material adverse effect on the general affairs, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, considered as one enterprise;
(u) The statutory Annual and Quarterly Statements of each Insurance
Subsidiary, and the statutory balance sheets and income statements included in
such statutory Annual and Quarterly Statements, most recently filed in each
state have been prepared in conformity with required or permitted statutory
accounting principles or practices consistently followed, except as may
otherwise be indicated in the notes thereto, and present fairly in all material
respects the statutory financial position of each Insurance Subsidiary as at the
dates thereof, and on a statutory basis for the periods covered thereby;
(v) The financial statements of the Company and its consolidated
subsidiaries included or incorporated by reference in the Registration Statement
and the Prospectus present fairly in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates indicated and the consolidated results of their operations for the periods
specified; and, except as stated therein, said financial statements have been
prepared in conformity with generally accepted accounting principles in the
United States applied on a consistent basis;
(w) The statements set forth in (i) the Prospectus under the captions
"Description of Securities", "Description of Debt Securities", "and "Description
of Delphi Funding L.L.C.", and (ii) in the Prospectus as amended or supplemented
under the captions "Certain Terms of Series A Capital Securities", "Certain
Terms of Series A Subordinated Debentures", "Certain Terms of Series A
Guarantee" and "Relationship Among the Series A Capital Securities, the Series A
Subordinated Debentures and the Series A Guarantee", insofar as they purport to
describe the provisions of the laws and documents referred to therein or
constitute a summary of the terms of the Securities, Subordinated Debentures,
the Guarantees and the Company Agreements (including the Designated Securities,
the Designated Subordinated Debentures and the Designated Guarantees), in each
case are accurate, complete and fair in all material respects;
(x) Neither the LLC nor the Company is or, after giving effect to the
offering and sale of the Securities, will be, an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(y) Ernst & Young LLP, who have certified certain financial statements of
the Company and its subsidiaries, are independent public accountants as required
by the Act and the rules and regulations of the Commission thereunder;
(z) The Pricing Agreement with respect to the Designated Securities
(incorporating the provisions hereof) and this Agreement each have been duly
authorized, executed and delivered by the Company and the LLC;
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(aa) The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles or statutory accounting practices, as the
case may be, and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences; and
(ab) The Company and each of the subsidiaries have filed all tax
returns required to be filed, which returns are complete and correct in all
material respects, and neither the Company nor any subsidiary is in default
in the payment of any taxes which were payable pursuant to said returns or
any assessments with respect thereto.
3. Upon the execution of the Pricing Agreement applicable to any Designated
Securities and authorization by the Representatives of the release of the Firm
Designated Securities, the several Underwriters propose to offer the Firm
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
The LLC may specify in the Pricing Agreement applicable to any Designated
Securities that the LLC thereby grants to the Underwriters the right (an
"Over-allotment Option") to purchase at their election up to the number of
Optional Designated Securities set forth in such Pricing Agreement, on the terms
set forth in the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Designated Securities. Any such election
to purchase Optional Designated Securities may be exercised by written notice
from the Representatives to the LLC and the Company, given within a period
specified in the Pricing Agreement, setting forth the aggregate number of
Optional Designated Securities to be purchased and the date on which such
Optional Designated Securities are to be delivered, as determined by the
Representatives but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless the Representatives, the LLC and the
Company otherwise agree in writing, earlier than or later than the respective
number of business days after the date of such notice set forth in such Pricing
Agreement.
The number of Optional Designated Securities to be added to the number of
Firm Designated Securities to be purchased by each Underwriter as set forth in
Schedule I to the Pricing Agreement applicable to such Designated Securities
shall be, in each case, the number of Optional Designated Securities which the
LLC and the Company have been advised by the Representatives have been
attributed to such Underwriter; provided that, if the LLC and the Company have
not been so advised, the number of Optional Designated Securities to be so added
shall be, in each case, that proportion of Optional Designated Securities which
the number of Firm Designated Securities to be purchased by such Underwriter
under such Pricing Agreement bears to the aggregate number of Firm Designated
Securities (rounded as the Representatives may determine to the nearest 100
securities). The total number of Designated Securities to be purchased by all
the Underwriters pursuant to such Pricing Agreement shall be the aggregate
number of Firm Designated Securities set forth in Schedule
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<PAGE> 12
I to such Pricing Agreement plus the aggregate number of Optional Designated
Securities which the Underwriters elect to purchase.
As compensation to the Underwriters of the Designated Securities for their
commitments hereunder and under the Pricing Agreement, and in view of the fact
that the proceeds of the sale of the Designated Securities will be used by the
LLC to purchase the Designated Subordinated Debentures of the Company, the
Company agrees to pay at each Time of Delivery to Goldman, Sachs & Co., for the
accounts of the several Underwriters, the amount set forth in the Pricing
Agreement per preferred security for the Designated Securities to be delivered
at each Time of Delivery.
4. Certificates for the Firm Designated Securities and the Optional
Designated Securities to be purchased by each Underwriter pursuant to the
Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours' prior notice to
the LLC and the Company, shall be delivered by or on behalf of the LLC to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer of
Federal (same day) Funds to an account designated by the LLC, (i) with respect
to the Firm Designated Securities, all in the manner and at the place and time
and date specified in such Pricing Agreement or at such other place and time and
date as the Representatives, the LLC and the Company may agree upon in writing,
such time and date being herein called the "First Time of Delivery" and (ii)
with respect to the Optional Designated Securities, if any, in the manner and at
the time and date specified by the Representatives in the written notice given
by the Representatives of the Underwriters' election to purchase such Optional
Designated Securities, or at such other time and date as the Representatives,
the LLC and the Company may agree upon in writing, such time and date, if not
the First Time of Delivery, herein called the "Second Time of Delivery". Each
such time and date for delivery is herein called a "Time of Delivery".
5. The LLC and the Company, jointly and severally, agree with each of the
Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended and supplemented in relation
to such Designated Securities in a form approved by the Representatives and
to file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of the Pricing Agreement relating to
the Designated Securities or, if applicable, such earlier time as may be
required by Rule 424(b); to make no further amendment or any supplement to
the Registration Statement or Prospectus as amended or supplemented after
the date of the Pricing Agreement relating to such Securities and prior to
any Time of Delivery for such Securities which shall be disapproved by the
Representatives for such Securities promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment or
supplement after any Time of Delivery for the Designated Securities and
furnish the Representatives with copies thereof; to file promptly all
reports and any definitive proxy or information statements required to be
filed by the LLC or the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery
of a prospectus is required in connection with the
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<PAGE> 13
offering or sale of the Designated Securities, and during such same period
to advise the Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any prospectus relating to the Securities, of the suspension of the
qualification of the Designated Securities or the Designated Subordinated
Debentures for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the event of
the issuance of any such stop order or of any such order preventing or
suspending the use of any prospectus relating to the Securities or
suspending any such qualification, promptly to use its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Designated
Securities or the Designated Subordinated Debentures for offering and sale
under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of such Designated Securities,
provided that in connection therewith neither the LLC nor the Company shall
be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of the Pricing Agreement for such Designated
Securities and from time to time, to furnish the Underwriters with copies
of the Prospectus in New York City as amended or supplemented in such
quantities as the Representatives may reasonably request, and, if the
delivery of a prospectus is required at any time in connection with the
offering or sale of the Designated Securities or the Designated
Subordinated Debentures and if at such time any event shall have occurred
as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in
the Prospectus in order to comply with the Act, the Exchange Act or the
Trust Indenture Act, to notify the Representatives and upon their request
to file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(d) In the case of the Company, to make generally available to its
security holders as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act), an earnings statement of the Company
and its subsidiaries (which need not be audited) complying with Section
11(a) of the
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<PAGE> 14
Act and the rules and regulations of the Commission thereunder (including,
at the option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing Agreement
for such Designated Securities and continuing to and including the later of
(i) the termination of trading restrictions for such Designated Securities,
as notified to the LLC and the Company by the Representatives and (ii) 30
days after the last Time of Delivery for such Designated Securities, not to
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder, any Securities, any other beneficial interests in the assets of
the LLC, or any preferred securities or any other securities of the LLC or
the Company, as the case may be, that are substantially similar to such
Designated Securities (including any guarantee of such securities) or any
securities that are convertible into or exchangeable for, or that represent
the right to receive securities, preferred securities or any such
substantially similar securities of either the LLC or the Company without
the prior written consent of the Representatives;
(f) In the case of the Company, to issue the Designated Guarantee
concurrently with the issue and sale of the Designated Securities as
contemplated herein or in the Pricing Agreement; and
(g) If the LLC and the Company elect to rely upon Rule 462(b), the LLC
and the Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C.
time, on the date of this Agreement, and the LLC and the Company shall at
the time of filing either pay to the Commission the filing fee for the rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that it
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Securities, the Guarantees and the Subordinated Debentures
under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, any
Pricing Agreement, any Company Agreement, the Securities and the Subordinated
Debentures, any Blue Sky Memorandum, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities, the Guarantees and the Subordinated
Debentures for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the disbursements and reasonable fees of counsel
for the Underwriters in connection with such qualification and in connection
with the Blue Sky survey(s); (iv) any fees charged by securities rating services
for rating the Securities and the Subordinated Debentures; (v) any filing fees
incident to, and the disbursements and reasonable fees of counsel for the
Underwriters in connection with, any required reviews by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities and the issuance of the Guarantees and the
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<PAGE> 15
Subordinated Debentures; (vi) the cost of preparing the Securities and the
Subordinated Debentures; (vii) the fees and expenses of any Indenture Trustee
and Guarantee Trustee, and any agent of any trustee and the fees and
disbursements of counsel for any trustee in connection with any Indenture,
Guarantee and the Securities; (viii) the cost of qualifying the Securities with
The Depository Trust Company; (ix) any fees and expenses in connection with
listing the Securities and the Subordinated Debentures and the cost of
registering the Securities under Section 12 of the Exchange Act; and (x) all
other costs and expenses incident to the performance of its obligations
hereunder and under any Over-allotment Options which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the LLC and the Company
in or incorporated by reference in the Pricing Agreement relating to such
Designated Securities are, at and as of each Time of Delivery for such
Designated Securities, true and correct, the condition that the LLC and the
Company shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to such
Designated Securities shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the LLC and the Company have elected to rely upon Rule 462(b),
the Rule 462(b) Registration Statement shall have become effective by 10:00
P.M., Washington, D.C. time, on the date of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
(b) Sullivan & Cromwell shall have furnished to the Representatives
such opinion or opinions, dated each Time of Delivery for such Designated
Securities, with respect to the incorporation of the Company, the validity
of the Designated Subordinated Debentures and the Designated Guarantee, the
Registration Statement, the Prospectus as amended or supplemented, as well
as such other related matters as the Representatives may reasonably
request, and such counsel shall have received such papers and information
as they may reasonably request to enable them to pass upon such matters;
(c) Cahill Gordon & Reindel (a partnership including a professional
corporation), counsel for the LLC and the Company, shall have furnished to
the Representatives their written opinion, dated each Time of Delivery for
such Designated Securities, respectively, in form and substance
satisfactory to the Representatives, to the effect that:
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<PAGE> 16
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware;
(ii) Each Significant Subsidiary has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, with corporate power and
authority to own, lease and operate its properties and conduct its
business as described in the Prospectus as amended or supplemented;
each Significant Subsidiary other than an Insurance Subsidiary is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not
have a material adverse effect on the financial condition, earnings or
business of the Company and its subsidiaries considered as one
enterprise; all of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and, to the best of such counsel's knowledge, is
owned by the Company, directly or through subsidiaries, free and clear
of any liens, except such liens as are described in the Prospectus or
in a document filed as an exhibit to the Registration Statement and
such liens that would not have a material adverse effect on the
financial condition, earnings or business of the Company and its
subsidiaries considered as one enterprise;
(iii) The authorized capital stock of the Company is as set forth
in the Prospectus as amended or supplemented;
(iv) The Registration Statement is effective under the Act and,
to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the
Act or proceedings therefor initiated or threatened by the Commission;
(v) To the best of such counsel's knowledge, there are no legal
or governmental proceedings pending or threatened which are required
to be disclosed in the Prospectus, other than those described therein;
based on a certificate of an officer of the Company and such other
investigation as such counsel has deemed appropriate, all pending
legal or governmental proceedings to which the Company or any
subsidiary other than an Insurance Subsidiary is a party or to which
any of their property is subject which are not described in the
Prospectus, including ordinary routine litigation incidental to the
business, would not, considered in the aggregate, reasonably be
expected to have a material adverse effect on the financial condition,
earnings or business of the Company and its subsidiaries, considered
as one enterprise; and there are no statutes or regulations (other
than insurance statutes and regulations, as to which such counsel need
express no opinion) required to be described in the Registration
Statement or the Prospectus which are not described as required;
(vi) This Agreement and the Pricing Agreement with respect to the
Designated Securities have been duly authorized, executed and
delivered by the LLC and the Company;
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<PAGE> 17
(vii) The issuance by the Company of the Designated Guarantee and
the Designated Subordinated Debentures, the compliance by the Company
with all of the provisions of this Agreement and the Pricing Agreement
and the Company Agreements, the execution, delivery and performance by
the Company of the Company Agreements and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, the Company's Certificate of
Incorporation or By-laws or under any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries (other than
the Insurance Subsidiaries) is a party or by which the Company or any
of its subsidiaries (other than the Insurance Subsidiaries) is bound
or to which any of the property or assets of the Company or any of its
subsidiaries (other than the Insurance Subsidiaries) is subject, nor
will such actions result in any violation of any statute or any order,
rule or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the LLC, the Company or any of
its subsidiaries or any of their properties, except, in the case of
any such agreement or instrument that is not described in the
Registration Statement or Prospectus and is not included as an exhibit
to a periodic report filed by the Company with the Commission pursuant
to the Exchange Act, for any such conflict, breach, violation or
default which would not have a material adverse effect on the
financial condition, earnings or business of the Company and its
subsidiaries considered as one enterprise;
(viii) No consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or
body having jurisdiction over the LLC, the Company or any of its
subsidiaries or any of their properties (excluding any such consent,
approval, authorization, order, registration or qualification (1) that
may be required of the Insurance Subsidiaries or (2) that may be
required of the Company and its subsidiaries other than the Insurance
Subsidiaries pursuant to applicable insurance laws and any regulations
thereunder of states other than New York or Delaware, as to which we
express no opinion) is required for the issue and sale of the
Designated Securities being delivered at such Time of Delivery or the
issuance of the Designated Guarantee and the Designated Subordinated
Debentures or the consummation by the LLC or the Company of the
transactions contemplated by this Agreement or such Pricing Agreement
and the Company Agreements, except such as have been obtained under
the Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Designated Securities by the
Underwriters or the issuance of the Designated Guarantee and
Designated Subordinated Debentures by the Company;
(ix) Based on a certificate of an officer of the Company, neither
the Company nor any of its subsidiaries other than the Insurance
Subsidiaries (as to which such counsel has not been asked to express
an opinion) is in violation of its Certificate of Incorporation or
By-laws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument of which it is a party or by which it or any
of its properties may be bound; based on a certificate of an officer
of the Company, the LLC is
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<PAGE> 18
not in violation of its LLC Agreement or in default in the performance
or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound;
(x) The statements set forth (i) in the Prospectus under the
captions "Description of Securities", "Description of Debt Securities"
and "Description of Delphi Funding L.L.C.", and (ii) in the Prospectus
as amended or supplemented under the captions "Certain Terms of Series
A Capital Securities", "Certain Terms of Series A Subordinated
Debentures" and "Certain Terms of Series A Guarantee", "Relationship
Among the Series A Capital Securities, the Series A Subordinated
Debentures and the Series A Guarantee" and "Certain ERISA
Considerations", insofar as they purport to describe the provisions of
the laws and documents referred to therein or constitute a summary of
the terms of the Securities, Subordinated Debentures, the Guarantees
and the Company Agreements (including the Designated Securities, the
Designated Subordinated Debentures and the Designated Guarantees), in
each case are accurate, complete and fair in all material respects;
(xi) The Designated Subordinated Debentures are in the form
prescribed in or pursuant to the Indenture, have been duly and validly
authorized by the Company by all necessary corporate action and, when
completed, executed and authenticated as specified in or pursuant to
the Indenture and issued and delivered against payment of the purchase
price therefore specified in the Pricing Agreement, will be valid and
binding obligations of the Company, enforceable in accordance with
their terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Designated Securities and the Designated Subordinated Debentures
conform in all material respects to the descriptions thereof in the
Prospectus; and the Indenture has been duly qualified under the Trust
Indenture Act;
(xii) The Designated Guarantee, the LLC Agreement and the
Indenture have each been duly authorized, executed and delivered by
the Company and, assuming that (x) each such agreement has been duly
authorized, executed and delivered by each other party thereto and (y)
in the case of the LLC Agreement, that such agreement is valid,
binding and enforceable under the laws of the State of Delaware, such
agreements constitute valid and legally binding instruments,
enforceable in accordance with their respective terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles;
(xiii) The LLC is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in
the Investment Company Act;
(xiv) The documents incorporated by reference in the Prospectus
as amended or supplemented (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with
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<PAGE> 19
the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder.
Additionally, such counsel shall state that the Registration Statement as
of its effective date and the Prospectus as amended or supplemented (and
any further amendments and supplements thereto made by the LLC or the
Company prior to such Time of Delivery), as of the date of such final
amendment or supplement (other than in each case the financial statements
and related schedules and other financial and statistical data therein, as
to which such counsel need express no opinion), comply as to form in all
material respects with the requirements of the Act and the rules and
regulations thereunder; although they do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those referred to in
the opinion in subsection (x) of this Section 7(c), they have no reason to
believe that, as of its effective date, the Registration Statement or any
further amendment thereto made by the LLC or the Company prior to such Time
of Delivery (other than the financial statements and related schedules and
other financial and statistical data therein, as to which such counsel need
express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that, as of its date, the
Prospectus as supplemented or any further amendment or supplement thereto
made by the LLC or the Company prior to such Time of Delivery (other than
the financial statements and related schedules and other financial and
statistical data therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as of
such Time of Delivery, the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the LLC or the Company
prior to such Time of Delivery (other than the financial statements and
related schedules and other financial and statistical date therein, as to
which such counsel need express no opinion) contains an untrue statement of
a material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and to the best of such counsel's knowledge, there
are no contracts or other documents of a character required to be filed as
an exhibit to the Registration Statement or required to be incorporated by
reference into the Prospectus as amended or supplemented or required to be
described in the Registration Statement or the Prospectus as amended or
supplemented which are not filed or incorporated by reference or described
as required;
(d) Chad W. Coulter, general counsel of RSLIC, or Jeffrey W. Otto,
general counsel of SNCC, shall have furnished to the Representatives their
written opinion or opinions dated the Time of Delivery, in form and
substance satisfactory to the Representatives, to the effect that:
(i) The Company is duly qualified as a foreign corporation to
transact business and is in good standing under the laws of each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
material adverse effect on the
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financial condition, earnings or business of the Company and its
subsidiaries considered as one enterprise;
(ii) Each Insurance Subsidiary is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not reasonably
be expected to have a material adverse effect on the financial
condition, earnings or business of the Company and its subsidiaries
considered as one enterprise;
(iii) To the best of such counsel's knowledge, there are no legal
or governmental proceedings pending or threatened against the
Insurance Subsidiaries which are required to be disclosed in the
Registration Statement or Prospectus, other than those disclosed
therein; and all pending legal or governmental proceedings to which
any Insurance Subsidiary is a party or to which any of their property
is subject which are not described in the Registration Statement or
Prospectus, including ordinary routine litigation incidental to the
business, would, considered in the aggregate, not reasonably be
expected to have a material adverse effect on the financial condition,
earnings or business of the Company and its subsidiaries considered as
one enterprise;
(iv) There are no insurance statutes or regulations required to
be described or referred to in the Registration Statement or the
Prospectus which are not described or referred to as required;
(v) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments to which any of the Insurance Subsidiaries is a
party or by which any of them is bound, required to be described or
referred to in the Registration Statement or Prospectus or to be filed
as exhibits thereto other than those described or referred to therein
or filed or incorporated by reference as exhibits thereto; and the
descriptions thereof or references thereto are correct in all material
respects;
(vi) Any authorization, approval, consent or order of any court,
governmental authority or agency that is (a) required to be obtained
or made by the Insurance Subsidiaries or (b) required to be obtained
or made by the Company or its Subsidiaries (other than the Insurance
Subsidiaries) pursuant to the applicable insurance laws and
regulations of the Commonwealth of Pennsylvania or the States of
Texas, Illinois, New York and Missouri in connection with the
offering, issuance or sale of the Designated Securities to the
Underwriters has been obtained or made as required, except such as may
be required under state insurance securities laws and regulations;
(vii) None of the Insurance Subsidiaries is in violation of its
charter or, to the best of such counsel's knowledge, in default in the
performance or observance of any obligation, agreement, covenant or
condition by which any of the Insurance Subsidiaries is or may be
bound and which is contained in any contract, indenture, mortgage,
loan agreement, note,
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<PAGE> 21
lease or other instrument to which any of the Insurance Subsidiaries
is a party or by which any of them is bound, or to which any of the
property or assets of any of the Insurance Subsidiaries is subject,
except for such violations or defaults that would not reasonably be
expected to have a material adverse effect on the financial condition,
earnings or business of the Company and its subsidiaries considered as
one enterprise;
(viii) To the best of such counsel's knowledge, the execution,
delivery and performance by the Company of the Agreement, the Pricing
Agreement and the Company Agreements, the consummation by the Company
of the transactions contemplated herein and therein and the compliance
by the Company with its obligations hereunder and thereunder will not
conflict with or constitute a breach of, or default under, or result
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of any of the Insurance Subsidiaries pursuant
to, any contract, indenture mortgage, loan agreement, note, lease or
other instrument to which any of the Insurance Subsidiaries is a party
or by which any of them may be bound, or to which any of the property
or assets of any of the Insurance Subsidiaries is subject, except for
a conflict, breach, default, lien, charge or encumbrance which would
not be reasonably expected to have a material adverse effect on the
financial condition, earnings or business of the Company and its
subsidiaries considered as one enterprise, nor will such actions by
the Company result in any violation of any law, administrative
regulation or administrative or court decree applicable to the
Insurance Subsidiaries (other than state securities and insurance
security laws and regulations), where such violation would prohibit
the execution, delivery or performance of the Underwriting Agreement
or the transactions contemplated therein or compliance by the Company
with its obligations thereunder;
(ix) Neither the Company nor SIG is required to be licensed as an
insurance company;
(x) RSLIC-Texas, RSLIC, FRSLIC and SNCC are each duly licensed as
an insurer under the insurance laws and regulations of the States of
Texas, Illinois, New York and Missouri, respectively, and, to the best
of such counsel's knowledge RSLIC-Texas, RSLIC, FRSLIC and SNCC have
filed with the appropriate insurance regulatory authorities all
reports, documents and other information required to be filed under
the insurance laws of the States of Texas, Illinois, New York and
Missouri, respectively, except as to filings the failure of which to
make, singly or in the aggregate, would not have a material adverse
effect on the financial condition, earnings or business of the Company
and its subsidiaries considered as one enterprise.
(xi) To the best of such counsel's knowledge, each Insurance
Subsidiary holds such licenses, certificates, authorizations and
permits from governmental authorities (including, without limitation,
the Insurance Licenses) which are necessary to the conduct of its
insurance business as presently operated, each Insurance Subsidiary
has fulfilled and performed all obligations necessary to maintain the
Insurance Licenses; and there is no pending or, to the best of such
counsel's knowledge, threatened action, suit, or proceeding that may
reasonably be expected to lead to the revocation, termination or
suspension of any such license, certificate or permit (including,
without limitation, the Insurance Licenses),
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except for an action, suit, or proceeding which would not have a
material adverse effect on the financial condition, earnings or
business of the Company and its subsidiaries, considered as one
enterprise, except, in each of the foregoing cases, as to licenses,
certificates or permits, the failure of which to obtain or maintain
would not have a material adverse effect on the management, financial
position, stockholders' equity or results of operations, of the
Company and its subsidiaries considered as one enterprise; and
(xii) No insurance regulatory agency or body has issued any order
or decree that by its terms is specifically applicable to one or more
of the Insurance Subsidiaries, as opposed to insurance companies
generally, restricting or prohibiting the payment of dividends by any
of the Insurance Subsidiaries to their respective parent companies.
Such counsel shall also provide a statement as to the matters included in the
last paragraph of Section 7(c) to be included in the opinion of Cahill Gordon &
Reindel (except that no statement need be made as to compliance of the
Registration Statement or the Prospectus as to form with the requirements of the
Act or otherwise).
(e) Morris, Nichols, Arsht & Tunnell, special Delaware Counsel to the
LLC and the Company, shall have furnished to you, the Company and the LLC
its written opinion, dated the respective Time of Delivery, in form and
substance satisfactory to you, to the effect that
(i) The LLC has been duly formed and is validly existing in good
standing as a limited liability company under the Delaware Act, and
all filings required under the laws of the State of Delaware with
respect to the formation and valid existence of the LLC as a limited
liability company have been made;
(ii) Under the Delaware Act and the LLC Agreement, the LLC has
the limited liability company power and authority to own property and
conduct its business, all as described in the Prospectus;
(iii) The LLC Agreement constitutes a valid and legally binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by (a) bankruptcy, insolvency, receivership,
liquidation, fraudulent conveyance, reorganization, moratorium and
similar laws of general application relating to or affecting the
enforcement of creditors' rights and remedies, (b) general principles
of equity (regardless of whether considered and applied in a
proceeding in equity or at law) and (c) considerations of public
policy or the effect of applicable law relating to fiduciary duties.
(iv) Under the Delaware Act and the LLC Agreement, the LLC has
the limited liability company power and authority to (a) execute and
deliver, and to perform its obligations under this Agreement and the
Pricing Agreement and (b) issue and perform its obligations under its
Designated Securities and Common Securities;
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<PAGE> 23
(v) Under the Delaware Act and the LLC Agreement, the execution
and delivery by the LLC of this Agreement and the Pricing Agreement,
and the performance by the LLC of its obligations hereunder and
thereunder, have been duly authorized by all necessary action on the
part of the LLC;
(vi) The Designated Securities have been duly authorized by the
LLC Agreement for issuance and, when issued, delivered and paid for in
accordance with the LLC Agreement, this Agreement and the Pricing
Agreement, will be validly issued and, subject to the qualifications
set forth herein, fully paid and non-assessable limited liability
company interests in the LLC; the Designated Securities have the
rights set forth in the LLC Agreement subject to the qualifications
set forth in clause (iii) above; no holder of Designated Securities,
in its capacity as a member of the LLC, will be obligated personally
for any debt, obligation or liability of the LLC solely by reason of
being a member of the LLC (such counsel may note that the holders of
Designated Securities may be required to make payment or provide
indemnity or security as set forth in the LLC Agreement);
(vii) The Common Securities of the LLC have been duly authorized
by the LLC Agreement for issuance and, when issued, delivered and paid
for in accordance with the LLC Agreement and as described in the
Prospectus, will be validly issued limited liability company interests
in the LLC;
(viii) Under the Delaware Act and the LLC Agreement, the issuance
of the Designated Securities and the Common Securities of the LLC is
not subject to preemptive rights;
(ix) The issuance and sale by the LLC of the Designated
Securities and the Common Securities of the LLC, the execution,
delivery and performance by the LLC of this Agreement and the Pricing
Agreement, the consummation by the LLC of the transactions
contemplated thereby and compliance by the LLC with its obligations
thereunder will not violate (a) any of the provisions of the
Certificate of Formation of the LLC or the LLC Agreement, or (b) any
applicable Delaware law or administrative regulation;
(x) Assuming that the LLC derives no income from or connected
with services provided within the State of Delaware and has no assets,
activities (other than maintaining a registered agent and a registered
office and the filing of documents with the Secretary of State of the
State of Delaware) or employees in the State of Delaware, no
authorization, approval, consent or order of any Delaware court or
governmental authority or agency is required to be obtained by the LLC
solely in connection with the issuance and sale of the Designated
Securities and the Common Securities of the LLC. (In rendering the
opinion expressed in this paragraph (x), such counsel need express no
opinion concerning the securities laws of the State of Delaware); and
(xi) Assuming that the LLC derives no income from or connected
with services provided within the State of Delaware and has no assets,
activities (other than maintaining a registered agent and registered
office and the filing of documents with the Secretary of State of the
State of Delaware) or employees in the State of Delaware, the
Securityholders
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(other than holders of the Securities, or persons who are partners or
S corporation shareholders, or are treated as owners of the assets of
a grantor for federal income tax purposes and who reside or are
domiciled in the State of Delaware or who are otherwise subject to
income taxation in the State of Delaware) will have no liability for
income taxes imposed by the State of Delaware solely as a result of
holding preferred limited liability company interests of LLC and the
LLC will not be liable for any income tax imposed by the State of
Delaware;
(f) Cahill Gordon & Reindel (a partnership including a professional
corporation), tax counsel for the LLC and the Company shall have furnished
to you their written opinion (a draft of such opinion is attached as Annex
III(e) hereto), dated the respective Time of Delivery, in form and
substance satisfactory to you, to the effect that such firm confirms its
opinion set forth in the Prospectus under the caption "Certain Federal
Income Tax Considerations";
(g) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement with
respect to the Designated Securities and at each Time of Delivery for such
Designated Securities, the independent accountants of the Company who have
certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement shall
have furnished to the Representatives a letter, dated the effective date of
the Registration Statement or the date of the most recent report filed with
the Commission containing financial statements and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of Delivery,
respectively, to the effect set forth in Annex II hereto, and with respect
to such letter dated such Time of Delivery, as to such other matters as the
Representatives may reasonably request and in form and substance
satisfactory to the Representatives (the executed copy of the letter
delivered prior to the execution of this Agreement is attached as Annex
II(a) hereto and a draft of the form of letter to be delivered on the
effective date of any post-effective amendment to the Registration
statement and as of each Time of Delivery is attached as Annex II(b)
hereto);
(h) (i) None of the LLC, the Company or any of the Company's
subsidiaries shall have sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus as amended prior to the date of the Pricing Agreement relating
to the Designated Securities any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order, decree or regulation, otherwise than as set forth or contemplated in
the Prospectus as amended prior to the date of the Pricing Agreement
relating to the Designated Securities, and (ii) since the respective dates
as of which information is given in the Prospectus as amended prior to the
date of the Pricing Agreement relating to the Designated Securities there
shall not have been any decrease in the capital stock or increase in
long-term debt or claims and claim expense reserves (other than in the
ordinary course of business in connection with an increase in net premiums
written, if any), or any decrease in combined consolidated statutory
surplus of the Company's life insurance subsidiaries or statutory surplus
of its casualty insurance subsidiary (other than as a result of changes in
the market price of the common stock of the Company held as part of
statutory surplus) of the Company or any of its
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subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus
as amended or supplemented prior to the date of the Pricing Agreement
relating to the Designated Securities, the effect of which, in any such
case described in Clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in the
Prospectus as amended relating to the Designated Securities;
(i) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities or preferred stock or the
claims-paying ability of any Insurance Subsidiary by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act (which shall be
deemed to include A.M. Best Company), and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities or preferred stock or the claims-paying ability of any Insurance
Subsidiary;
(j) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally
on the New York Stock Exchange or on the NASDAQ National Market; (ii) a
suspension or material limitation in trading in the Company's securities on
the New York Stock Exchange; (iii) a general moratorium on commercial
banking activities declared by either Federal or New York State
authorities; or (iv) the outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war, if the effect of any such event specified in this Clause
(iv) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Firm
Designated Securities or Optional Designated Securities or both on the
terms and in the manner contemplated in the Prospectus as first amended or
supplemented relating to the Designated Securities;
(k) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of the Pricing Agreement for such
Designated Securities; and
(l) The LLC and the Company shall have furnished or caused to be
furnished to the Representatives at each Time of Delivery for the
Designated Securities certificates of officers of the LLC and the Company
satisfactory to the Representatives as to the accuracy of the
representations and warranties of the LLC and the Company herein at and as
of such Time of Delivery, as to the performance by the LLC and the Company
of all of its obligations hereunder to be performed at or prior to such
Time of Delivery, as to the matters set forth in the introduction to this
Section and in subsections (a) and (h) of this Section and as to such other
matters as the Representatives may reasonably request.
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8. (a) The LLC and the Company, jointly and severally, will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Designated Securities, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that neither the LLC nor the Company shall be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the LLC and the Company by any
Underwriter of Designated Securities through the Representatives expressly for
use in the Prospectus as amended or supplemented relating to such Securities.
(b) Each Underwriter will indemnify and hold harmless the LLC and the
Company against any losses, claims, damages or liabilities to which the LLC or
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Designated Securities, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the LLC and the Company
by such Underwriter through the Representatives expressly for use therein; and
will reimburse the LLC and the Company for any legal or other expenses
reasonably incurred by the LLC or the Company in connection with investigating
or defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying party
under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify such indemnifying party
shall not relieve it from any liability which it may have to any indemnified
party otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify
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the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include any statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the LLC and the Company on the one hand and the Underwriters of the
Designated Securities on the other from the offering of the Designated
Securities to which such loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the LLC and the Company on the
one hand and the Underwriters of the Designated Securities on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
LLC and the Company on the one hand and such Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from such offering
(before deducting expenses) received by the LLC and the Company bear to the
total underwriting discounts and commissions received by such Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
LLC and the Company on the one hand or such Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The LLC, the Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims,
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<PAGE> 28
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters of Designated Securities in this subsection (d)
to contribute are several in proportion to their respective underwriting
obligations with respect to such Securities and not joint.
(e) The obligations of the LLC and the Company under this Section 8 shall
be in addition to any liability which the LLC and the Company may otherwise have
and shall extend, upon the same terms and conditions, to each person, if any,
who controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the LLC and the
Company and to each person, if any, who controls the LLC and the Company within
the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Firm Designated Securities or Optional Designated Securities which it has agreed
to purchase under the Pricing Agreement relating to such Securities, the
Representatives may in their discretion arrange for themselves or another party
or other parties to purchase such Securities on the terms contained herein. If
within thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Firm Designated
Securities or Optional Designated Securities, as the case may be, then the LLC
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Securities on such terms. In the event that, within the respective
prescribed period, the Representatives notify the LLC that they have so arranged
for the purchase of such Securities, or the LLC notifies the Representatives
that it has so arranged for the purchase of such Securities, the Representatives
or the LLC shall have the right to postpone a Time of Delivery for such
Securities for a period of not more than seven days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus as amended or supplemented, or in any other documents or
arrangements, and the LLC agrees to file promptly any amendments or supplements
to the Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to the Pricing Agreement
with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Firm Designated Securities or Optional Designated Securities, as the case may
be, of a defaulting Underwriter or Underwriters by the Representatives and the
LLC as provided in subsection (a) above, the aggregate number of such Securities
which remains unpurchased does not exceed one-eleventh of the aggregate number
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<PAGE> 29
of the Firm Designated Securities or Optional Designated Securities, as the case
may be, to be purchased at the respective Time of Delivery, then the LLC shall
have the right to require each non-defaulting Underwriter to purchase the number
of Firm Designated Securities or Optional Designated Securities, as the case may
be, which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Firm Designated Securities or Optional Designated Securities, as the case may
be, which such Underwriter agreed to purchase under such Pricing Agreement) of
the Firm Designated Securities or Optional Designated Securities, as the case
may be, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Firm Designated Securities or Optional Designated Securities, as the case may
be, of a defaulting Underwriter or Underwriters by the Representatives and the
LLC as provided in subsection (a) above, the aggregate number of Firm Designated
Securities or Optional Designated Securities, as the case may be, which remains
unpurchased exceeds one-eleventh of the aggregate number of the Firm Designated
Securities or Optional Designated Securities, as the case may be, to be
purchased at the respective Time of Delivery, as referred to in subsection (b)
above, or if the LLC shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Firm Designated
Securities or Optional Designated Securities, as the case may be, of a
defaulting Underwriter or Underwriters, then the Pricing Agreement relating to
such Firm Designated Securities or the Over-allotment Option relating to such
Optional Designated Securities, as the case may be, shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the LLC or
the Company, except for the expenses to be borne by the LLC and the Company and
the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the LLC or the Company and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the LLC or
the Company, or any officer or director or controlling person of the LLC or the
Company, and shall survive delivery of and payment for the Securities.
11. If any Pricing Agreement or Over-allotment Option shall be terminated
pursuant to Section 9 hereof, neither the LLC nor the Company shall then be
under any liability to any Underwriter with respect to the Firm Designated
Securities or Optional Designated Securities with respect to which such Pricing
Agreement shall have been terminated except as provided in Sections 6 and 8
hereof; but, if for any other reason, Designated Securities are not delivered by
or on behalf of the LLC or the Company as provided herein, the Company will
reimburse the Underwriters through the Representatives for all out-of-pocket
expenses approved in writing by the Representatives, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of such Designated Securities,
but the LLC or the Company shall
29
<PAGE> 30
then be under no further liability to any Underwriter with respect to such
Designated Securities except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the LLC or the Company shall be delivered or sent
by mail, telex or facsimile transmission to the address of the LLC or the
Company, respectively, set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the LLC and the Company by the Representatives upon request. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the LLC, the Company and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the LLC, the Company and each person who controls the LLC or the Company or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement or any such Pricing Agreement. No purchaser of any of
the Securities from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
30
<PAGE> 31
If the foregoing is in accordance with your understanding, please sign and
return to us 3 counterparts hereof.
Very truly yours,
DELPHI FINANCIAL GROUP, INC.
By: ________________________________
Name:
Title:
DELPHI FUNDING L.L.C.
By: DELPHI FINANCIAL GROUP, INC.
By: ________________________________
Name:
Title:
Accepted on behalf of ourselves and the other Underwriters listed in Schedule I
to the Pricing Agreement:
- ------------------------------
(Goldman, Sachs & Co.)
31
<PAGE> 32
ANNEX I
Pricing Agreement
Goldman, Sachs & Co.,
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Date: ___________
Ladies and Gentlemen:
Delphi Funding L.L.C., a limited liability company formed under the laws of
the State of Delaware (the "LLC") and Delphi Financial Group, Inc., a Delaware
corporation (the "Company"), propose, subject to the terms and conditions stated
herein and in the Underwriting Agreement, dated March 20, 1997 (the
"Underwriting Agreement"), between the LLC and the Company on the one hand and
Goldman, Sachs & Co., on the other hand, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") the Securities specified in
Schedule II hereto (the "Designated Securities" consisting of Firm Designated
Securities and any Optional Designated Securities the Underwriters may elect to
purchase). The principal asset of the LLC consists of debt securities of the
Company (the "Subordinated Debentures"), as specified in Schedule II to this
Agreement. The Designated Securities will be guaranteed by the Company to the
extent set forth in the Prospectus (as defined in the Underwriting Agreement)
with respect to such Designated Securities (the "Guarantee"). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth in Schedule II hereto.
An amendment to the Initial Registration Statement or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the LLC agrees to
issue and sell to each of the Underwriters,
<PAGE> 33
and each of the Underwriters agrees, severally and not jointly, to purchase from
the LLC, at the time and place and at the purchase price to the Underwriters set
forth in Schedule II hereto, the number of Firm Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto and, (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Designated Securities, as provided below, the LLC agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the LLC at the purchase price to the
Underwriters set forth in Schedule II hereto that portion of the number of
Optional Designated Securities as to which such election shall have been
exercised.
The LLC hereby grants to each of the Underwriters the right to purchase at
their election up to the number of Optional Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto on the terms referred
to in the paragraph above for the sole purpose of covering over-allotments in
the sale of the Firm Designated Securities. Any such election to purchase
Optional Designated Securities may be exercised by written notice from the
Representatives to the LLC and the Company given within a period of 30 calendar
days after the date of this Pricing Agreement, setting forth the aggregate
number of Optional Designated Securities to be purchased and the date on which
such Optional Designated Securities are to be delivered, as determined by the
Representatives, but in no event earlier than the First Time of Delivery or,
unless the Representatives and the LLC otherwise agree in writing, no earlier
than two or later than ten business days after the date of such notice.
2
<PAGE> 34
If the foregoing is in accordance with your understanding, please sign and
return to us [ ] counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the LLC and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the LLC and the Company for examination, upon request, but
without warranty on the part of the Representatives as to the authority of the
signers thereof.
Very truly yours,
DELPHI FINANCIAL GROUP, INC.
By: _____________________________
Name:
Title:
DELPHI FUNDING L.L.C.
By: DELPHI FINANCIAL GROUP, INC.
By: _____________________________
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
As Representatives of the Underwriters
Named in Schedule I hereto
- ------------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
3
<PAGE> 35
SCHEDULE I
<TABLE>
<CAPTION>
Maximum Number
of Optional
Number of Designated
Firm Designated Securities Which
Securities May be
Underwriter to be Purchased Purchased
----------- --------------- ---------
<S> <C> <C>
Goldman, Sachs & Co.......................................
[Names of other Underwriters].............................
Total
</TABLE>
1
<PAGE> 36
SCHEDULE II
Title of Designated Securities:
____% Capital Securities, Series __
Aggregate principal amount:
Aggregate principal amount of Designated
Securities to be sold: $_____________
Price to Public:
100% of the principal amount of the Designated Securities
Purchase Price by Underwriters:
_______% of the principal amount of the Designated Securities
Underwriters' Compensation:
As compensation to the Underwriters for their commitments hereunder, and
in view of the fact that the proceeds of the sale of the Designated
Securities will be used by the LLC to purchase the Subordinated
Debentures of the Company, the Company hereby agrees to pay at each Time
of Delivery to Goldman, Sachs & Co., for the accounts of the several
Underwriters, an amount equal to $__________ per preferred security for
the Designated Securities to be delivered at each Time of Delivery.
Alternatively, as a matter of convenience, Goldman, Sachs & Co. may
deduct such amount from the purchase price of the designated securities
and in such event the Company shall be deemed to have paid the same.
Specified funds for payment of purchase price:
Federal (same day) Funds
Accountants' Letter to be delivered on date of Pricing Agreement:
Yes.
LLC Agreement:
Amended and Restated Limited Liability Company Agreement dated as of
________ __, ____.
Indenture:
2
<PAGE> 37
Indenture, dated as of March 25, 1997, between the Company and
Wilmington Trust Company, as Indenture Trustee
Guarantee:
Guarantee Agreement, dated as of March 1, 1997, between Company and
Wilmington Trust Company, as Guarantee Trustee
Maturity:
-------- --, ----
Interest Rate:
----%
Interest Payment Dates:
Extension Period:
Redemption Provisions:
Sinking Fund Provisions:
No sinking fund provisions.
Time of Delivery:
10:00 a.m., New York City time
-------- --, ----
Closing Location:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
3
<PAGE> 38
Names and addresses of Representatives:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
4
<PAGE> 39
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the LLC and the Company and its subsidiaries within the meaning of the Act
and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been separately furnished to the representatives of the
Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly reports on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which have been separately furnished to the Representatives; and on the
basis of specified procedures including inquiries of officials of the
Company who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations, nothing came
to their attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
<PAGE> 40
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference in
the Company's Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations, or (ii) any material modifications should
be made to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's Quarterly Reports
on Form 10-Q incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items
were derived, and any such unaudited data and items were not determined on
a basis substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included or
incorporated by reference in the Company's Annual Report on Form 10-K for
the most recent fiscal year;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial
statements referred to in clause (A) and any unaudited income statement
data and balance sheet items included in the Prospectus and referred to in
Clause (B) were not determined on a basis substantially consistent with the
basis for the audited financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do not
comply as to form in all material respects
2
<PAGE> 41
with the applicable accounting requirements of the Act and the published
rules and regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options and
stock appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were outstanding
on the date of the latest balance sheet included or incorporated by
reference in the Prospectus) or any increase in the consolidated long-term
debt of the Company and its subsidiaries, or any decreases in consolidated
net current assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the latest
balance sheet included or incorporated by reference in the Prospectus,
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described in
such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in Clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the Representatives, or
any increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with any
other period of corresponding length specified by the Representatives,
except in each case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such letter;
and
(vii) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives
or in documents incorporated by reference in the Prospectus specified by
the Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.
3
<PAGE> 1
Exhibit 4(a)
================================================================================
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
of
DELPHI FUNDING L.L.C.
among
DELPHI FINANCIAL GROUP, INC.,
as Managing Member,
CHESTNUT INVESTORS III, INC.,
as Resigning Member,
and
THE HOLDERS OF CAPITAL SECURITIES DESCRIBED HEREIN,
as Members
Dated as of March 25, 1997
================================================================================
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
ARTICLE I
DEFINED TERMS
SECTION 1.1 Definitions. ........................................................ 1
ARTICLE II
CONTINUATION OF THE COMPANY
SECTION 2.1 Continuation......................................................... 8
SECTION 2.2 Name. ............................................................... 8
SECTION 2.3 Term................................................................. 9
SECTION 2.4 Registered Office.................................................... 9
SECTION 2.5 Registered Agent..................................................... 9
SECTION 2.6 Principal Office..................................................... 9
SECTION 2.7 Treatment as Partnership............................................. 9
SECTION 2.8 Allocation of Profits and Losses..................................... 9
SECTION 2.9 Assets of Company.................................................... 10
SECTION 2.10 Initial Contribution of Company Property; Organizational Expenses... 10
SECTION 2.11 Issuance of the Capital Securities.................................. 10
SECTION 2.12 Issuance of the Common Securities; Subscription and Purchase of
Debentures........................................................................ 10
SECTION 2.13 Purpose............................................................. 10
SECTION 2.14 Management and Control; Authorization to Enter into Certain
Transactions...................................................................... 11
SECTION 2.15 Members............................................................. 13
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1 Payment Account...................................................... 14
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1 Distributions........................................................ 15
SECTION 4.2 Redemption........................................................... 16
SECTION 4.3 Subordination of Common Securities................................... 18
SECTION 4.4 Payment Procedures................................................... 19
SECTION 4.5 Tax Returns and Reports.............................................. 19
SECTION 4.6 Payment of Taxes, Duties, Etc. of the Company........................ 19
SECTION 4.7 Payments under Indenture or Pursuant to Direct Actions............... 19
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE V
LLC SECURITIES CERTIFICATES
SECTION 5.1 Initial Membership; Resignation of Chestnut.......................... 20
SECTION 5.2 The LLC Securities Certificates...................................... 20
SECTION 5.3 Execution and Delivery of LLC Securities Certificates................ 20
SECTION 5.4 Registration of Transfer and Exchange of Capital Securities
Certificates...................................................................... 20
SECTION 5.5 Mutilated, Destroyed, Lost or Stolen LLC Securities Certificates..... 21
SECTION 5.6 Persons Deemed Securityholders....................................... 22
SECTION 5.7 Access to List of Securityholders' Names and Addresses............... 22
SECTION 5.8 Maintenance of Office or Agency. .................................... 22
SECTION 5.9 Appointment of Paying Agent.......................................... 22
SECTION 5.10 Ownership of Common Securities by Group............................. 23
SECTION 5.11 Book-Entry Capital Securities Certificates; Common Securities
Certificate....................................................................... 23
SECTION 5.12 Notices to Clearing Agency.......................................... 24
SECTION 5.13 Definitive Capital Securities Certificates. ........................ 24
SECTION 5.14 Rights of Securityholders........................................... 25
SECTION 5.15 CUSIP Numbers....................................................... 27
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.1 Limitations on Voting Rights......................................... 28
SECTION 6.2 Notice of Meetings................................................... 29
SECTION 6.3 Meetings of Capital Securityholders.................................. 29
SECTION 6.4 Voting Rights........................................................ 29
SECTION 6.5 Proxies, etc......................................................... 29
SECTION 6.6 Securityholder Action by Written Consent............................. 30
SECTION 6.7 Record Date for Voting and Other Purposes............................ 30
SECTION 6.8 Acts of Securityholders.............................................. 30
ARTICLE VII
DISSOLUTION, LIQUIDATION AND MERGER
SECTION 7.1 Dissolution Upon Expiration Date..................................... 31
SECTION 7.2 Early Dissolution.................................................... 31
SECTION 7.3 Termination.......................................................... 32
SECTION 7.4 Liquidation.......................................................... 32
SECTION 7.5 Mergers, Consolidations, Amalgamations or Replacements of the
Company........................................................................... 34
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE VIII
BOOKS AND RECORDS
SECTION 8.1 Books and Records; Accounting........................................ 35
SECTION 8.2 Financial Statements................................................. 35
SECTION 8.3 Fiscal Year.......................................................... 35
SECTION 8.4 Inspection of Records................................................ 35
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Limitation of Rights of Securityholders.............................. 35
SECTION 9.2 Liability of the Common Securityholder............................... 36
SECTION 9.3 Amendment........................................................... 36
SECTION 9.4 Separability......................................................... 37
SECTION 9.5 Governing Law........................................................ 37
SECTION 9.6 Payments Due on Non-Business Day..................................... 37
SECTION 9.7 Successors........................................................... 37
SECTION 9.8 Headings............................................................. 38
SECTION 9.9 Reports, Notices and Demands......................................... 38
SECTION 9.10 Acceptance of Terms of Agreement, Guarantee and Indenture........... 38
SECTION 9.11 Counterparts........................................................ 39
</TABLE>
iii
<PAGE> 5
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of Delphi Funding
L.L.C. (the "Company"), dated as of March 1, 1997 (this "Agreement"), among
Delphi Financial Group, Inc., a Delaware corporation ("Group"), Chestnut
Investors III, Inc., a Delaware corporation ("Chestnut"), and the Holders of
Capital Securities (as hereinafter defined), as members.
WITNESSETH:
WHEREAS, Group and Chestnut have heretofore duly formed a limited liability
company pursuant to the Delaware Act (as defined below) by the entering into a
certain Limited Liability Company Agreement, dated as of March 28, 1994 (the
"Original LLC Agreement"), and by the execution and filing with the Secretary of
State of the State of Delaware of the Certificate of Formation, filed on [March
28, 1994] (the "Certificate of Formation"), attached as parts of Exhibit A; and
WHEREAS, Group and Chestnut desire to continue the Company as a limited
liability company pursuant to the Delaware Act and amend and restate the
Original LLC Agreement in its entirety as set forth herein to provide for, among
other things, (i) the issuance of the Common Securities by the Company to Group,
(ii) the issuance and sale of the Capital Securities by the Company pursuant to
the Underwriting Agreement, (iii) the acquisition by the Company from Group of
all of the right, title and interest in the Debentures and (iv) the resignation
of Chestnut as a member of the Company;
NOW THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, each party, for the benefit of the other parties and for
the benefit of the Securityholders, hereby amends and restates the Original LLC
Agreement in its entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 Definitions.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
(b) unless the context otherwise requires, any reference to an "Article" or
a "Section" refers to an Article or a Section, as the case may be, of this
Agreement; and
<PAGE> 6
2
(c) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to LLC Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest (as
defined in the Indenture) paid by Group on a Like Amount of Debentures for such
period.
"Additional Sums" has the meaning specified in [Section 10.6] of the
Indenture.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this Amended and Restated Limited Liability Company
Agreement, as the same may be modified, amended or supplemented in accordance
with the applicable provisions hereof, including all exhibits hereto.
"Authentication Agent" means Wilmington Trust Company, a Delaware banking
corporation, as transfer agent for the Company (or any successor transfer agent
for the Company approved by it in writing).
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in the
premises judging such Person a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of such Person or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person or of any substantial part of its
<PAGE> 7
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property, or the making by it of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its debts generally as
they become due and its willingness to be adjudicated a bankrupt, or the taking
of corporate action by such Person in furtherance of any such action.
"Book-Entry Capital Securities" means a beneficial interest in the Capital
Securities Certificates, ownership and transfers of which shall be made through
book entries by a Clearing Agency as described in Section 5.11.
"Book-Entry Capital Securities Certificates" means the Capital Securities
Certificates representing Book-Entry Capital Securities.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed, or (c) a day on which Group or the
Corporate Trust Office of the Debenture Trustee is closed for business.
"Capital Securities Certificate" means a certificate evidencing ownership
of Capital Securities, substantially in the form attached as Exhibit B.
"Capital Security" means a limited liability company interest in the
Company, having a Liquidation Amount of $1,000 and having the rights provided
therefor in this Agreement, including the right to receive Distributions and a
Liquidation Distribution as provided herein.
"Certificate Depository Agreement" means the agreement among the Company,
Group and The Depository Trust Company, as the initial Clearing Agency, dated on
or prior to the Closing Date, relating to the LLC Securities Certificates,
substantially in the form attached as Exhibit C, as the same may be amended and
supplemented from time to time.
"Certificate of Formation" has the meaning specified in the recitals
hereof, as such may be amended from time to time.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The
Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date" means ________ __, 1997.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it, then the body performing
such duties at such time.
"Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached as Exhibit D.
"Common Security" means a common limited liability company interest in the
Company having a Liquidation Amount of $1,000 and having the rights provided
therefor in this Agreement, including the right to receive Distributions and a
Liquidation Distribution as provided herein.
"Company" means the Delaware limited liability company continued hereby and
identified on the cover page to this Agreement.
"Company Property" means (a) the Debentures, (b) any cash on deposit in, or
owing to, the Payment Account and (c) all proceeds and rights in respect of the
foregoing.
"Corporate Trust Office" means, with respect to the Debenture Trustee, the
principal office of the Debenture Trustee located in New York, New York.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Debenture Maturity Date" means the date specified pursuant to the terms of
the Debentures as the date on which the principal of the Debentures is due and
payable, as such date may be shortened pursuant to the terms of the Debentures.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.
"Debenture Trustee" means Wilmington Trust Company, a Delaware banking
corporation, as trustee under the Indenture, and any successor trustee appointed
as provided therein.
"Debentures" means the $103,093,000 aggregate principal amount of Group's
___% Junior Subordinated Deferrable Interest Debentures, Series A, issued
pursuant to the Indenture.
"Definitive Capital Securities Certificates" means either or both (as the
context requires) of (a) Capital Securities Certificates issued as Book-Entry
Capital Securities Certificates as provided in Section 5.11(a) and (b) Capital
Securities Certificates issued in certificated, fully registered form as
provided in Section 5.13.
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"Delaware Act" means the Delaware Limited Liability Company Act, Chapter 18
of Title 6 of the Delaware Code, 6 Del. C. 18-101, et seq., as it may be amended
from time to time.
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the LLC Securities as
provided in Section 4.1.
"Early Dissolution Event" has the meaning specified in Section 7.2.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Company in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of 30
days; or
(c) default by the Company in the payment of any Redemption Price of any
LLC Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Managing Member in this Agreement (other than a
covenant or warranty a default in the performance of which or the breach of
which is dealt with in clause (b) or (c) above), and the continuation of such
default or breach for a period of 90 days after there has been given, by
registered or certified mail, to the defaulting Managing Member by the holder of
at least 25% in aggregate Liquidation Amount of the outstanding Capital
Securities, a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" under this
Agreement; or
(e) the occurrence of a Bankruptcy Event with respect to the Managing
Member.
"Expiration Date" has the meaning specified in Section 7.1.
"Guarantee" means the Guarantee Agreement executed and delivered by Group
and Wilmington Trust Company, a Delaware banking corporation, as trustee,
contemporaneously with the execution and delivery of this Agreement, for the
benefit of the Holders of the LLC Securities, as amended from time to time.
"Group" has the meaning specified in the preamble to this Agreement.
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"Indenture" means the Subordinated Indenture, dated as of March 1, 1997,
between Group and the Debenture Trustee, as trustee, as amended or supplemented
from time to time.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of LLC Securities, LLC
Securities having a Liquidation Amount equal to the principal amount of
Debentures to be contemporaneously redeemed, or which will contemporaneously
mature, the proceeds of which will be used to pay the Redemption Price of such
LLC Securities, and (b) with respect to a distribution of Debentures to Holders
of LLC Securities in connection with a dissolution or liquidation of the
Company, Debentures having a principal amount equal to the Liquidation Amount of
the LLC Securities of the Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per LLC Security.
"Liquidation Date" means the date on which Debentures are to be distributed
to Holders of LLC Securities in connection with a dissolution and liquidation of
the Company pursuant to Section 7.4(a).
"Liquidation Distribution" has the meaning specified in Section 7.4(d).
"LLC Securities Certificate" means any one of the Common Securities
Certificates or the Capital Securities Certificates.
"LLC Security" means any one of the Common Securities or the Capital
Securities.
"Managing Member" means Group, in its capacity as the Member that hold all
of the outstanding Common Securities.
"Member" means any member of the Company under the Delaware Act, which
includes the Managing Member and the Holders of Capital Securities from time to
time.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for, or an employee of, the Company or the Managing Member.
"Original LLC Agreement" has the meaning specified in the recitals to this
Agreement.
"Outstanding", when used with respect to LLC Securities, means, as of the
date of determination, all LLC Securities theretofore executed and delivered
under this Agreement, except:
<PAGE> 11
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(a) LLC Securities theretofore cancelled by the Securities Registrar or
delivered to the Securities Registrar for cancellation;
(b) LLC Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Paying Agent for the Holders of
such LLC Securities; provided that, if such LLC Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this Agreement; and
(c) LLC Securities which have been paid or in exchange for or in lieu of
which other LLC Securities have been executed and delivered pursuant to this
Agreement, including pursuant to Sections 5.4, 5.5, 5.11 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Capital
Securities owned by Group or any Affiliate of Group shall be disregarded and
deemed not to be Outstanding, except that the foregoing shall not apply at any
time when all of the outstanding Capital Securities are owned by Group and/or
any such Affiliate. Capital Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Managing Member the pledgee's right so to act with respect
to such Capital Securities and that the pledgee is not Group or any Affiliate of
Group.
"Owner" means (i) with respect to the Capital Securities, each Person who
is the beneficial owner of a Book-Entry Capital Securities Certificate as
reflected in the records of the Clearing Agency or, if a Clearing Agency
Participant is not the beneficial owner, then as reflected in the records of a
Person maintaining an account with such Clearing Agency (directly or indirectly,
in accordance with the rules of such Clearing Agency) and (ii) with respect to
the Common Securities, the Holders thereof.
"Paying Agent" means any paying agent or co-paying agent appointed pursuant
to Section 5.9 and shall initially be Wilmington Trust Company, a Delaware
banking corporation.
"Payment Account" means a segregated non-interest-bearing special account
maintained by the Company with a commercial bank in the name of the Paying Agent
for the benefit of the Securityholders in which all amounts paid in respect of
the Debentures will be held and from which the Company, through the Paying
Agent, shall make payments to the Securityholders in accordance with Sections
4.1 and 4.2.
"Person" means any individual, corporation, partnership, joint venture,
trust, estate, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
<PAGE> 12
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"Redemption Date" means, with respect to any LLC Security to be redeemed,
the date fixed for such redemption by or pursuant to this Agreement; provided
that each Debenture Redemption Date and the Debenture Maturity Date shall be a
Redemption Date for a Like Amount of LLC Securities.
"Redemption Price" means, with respect to any LLC Security, the Liquidation
Amount of such LLC Security, plus accumulated and unpaid Distributions to but
excluding the Redemption Date, plus the amount of the premium, if any, paid by
Group upon the concurrent redemption of Debentures having a principal amount
equal to the Liquidation Amount of such LLC Security.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a LLC Security or
LLC Securities are registered in the Securities Register; provided, however,
that in determining whether the Holders of the requisite amount of Capital
Securities have voted on any matter provided for in this Agreement, then for the
purpose of any such determination, so long as Definitive Capital Securities
Certificates have not been issued, the term Securityholders or Holders as used
herein shall refer to the Owners.
"Underwriting Agreement" means the Underwriting Agreement, dated March
[20], 1997, and the Pricing Agreement, dated March [20], 1997, collectively,
each among the Company, Group and Goldman, Sachs & Co.
ARTICLE II
CONTINUATION OF THE COMPANY
SECTION 2.1 Continuation.
The Members hereby agree to continue the Company as a limited liability
company under and pursuant to the Delaware Act and agree that the rights, duties
and liabilities of the Members shall be as provided in the Delaware Act, except
as otherwise provided herein.
SECTION 2.2 Name.
The name of the Company heretofore formed and continued hereby is "Delphi
Funding L.L.C." The business of the Company shall be conducted under such name
or, upon compliance with all applicable laws, under such other name or names as
the Managing Member may from time to time determine in its sole discretion.
<PAGE> 13
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SECTION 2.3 Term.
The term of the Company commenced on the date the Certificate of Formation
was filed in the office of the Secretary of State of the State of Delaware and
shall continue until ________ __, 2027, unless dissolved before such date in
accordance with the provisions of this Agreement.
SECTION 2.4 Registered Office.
The address of the registered office of the Company in the State of
Delaware is c/o Delphi Financial Group, Inc., 1105 North Market Street, Suite
1230, P.O. Box 8985, Wilmington, New Castle County, Delaware 19899.
SECTION 2.5 Registered Agent.
The name and address of the registered agent of the Company for service of
process on the Company in the State of Delaware is Delphi Financial Group, Inc.,
1105 North Market Street, Suite 1230, P.O. Box 8985, Wilmington, New Castle
County, Delaware 19899.
SECTION 2.6 Principal Office.
The principal office of the Company initially shall be at 1105 North Market
Street, Suite 1230, P.O. Box 8985, Wilmington, New Castle County, Delaware
19899. The Managing Member may change the Company's principal office from time
to time in its sole discretion; provided that such change has no material
adverse effect upon any Member.
SECTION 2.7 Treatment as Partnership.
The Members agree that it is intended that the Company shall be treated as
a partnership for United States Federal income tax purposes and that this
Agreement and all acts of the Members thereof shall, to the fullest extent
permitted by the Delaware Act, be interpreted and construed accordingly.
SECTION 2.8 Allocation of Profits and Losses.
The profits and losses of the Company (other than the allocation of profits
to the Holders of the Capital Securities in amounts equal to the accrued
Distributions on such securities) shall be allocated entirely to the Managing
Member.
SECTION 2.9 Assets of Company.
The assets of the Company shall consist solely of the Company Property.
<PAGE> 14
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SECTION 2.10 Initial Contribution of Company Property; Organizational
Expenses.
The Company acknowledges receipt from Group and Chestnut in connection with
the Original LLC Agreement of the sum of $10 each, which constituted the initial
Company Property. Group shall pay organizational expenses of the Company as they
arise or shall promptly reimburse the Company for any such expenses paid by the
Company. Group shall make no claim upon the Company Property for the payment of
such expenses.
SECTION 2.11 Issuance of the Capital Securities.
As of March __, 1997, the Managing Member, on behalf of the Company and
pursuant to the Original LLC Agreement, executed and delivered the Underwriting
Agreement. On the Closing Date, the Managing Member, on behalf of the Company,
shall execute in accordance with Section 5.2 and deliver to the Underwriters
named in the Underwriting Agreement Capital Securities Certificates, registered
in the name of the nominee of the initial Clearing Agency, in an aggregate
amount of 100,000 Capital Securities having an aggregate Liquidation Amount of
$100,000,000, against receipt by the Company of an aggregate purchase price of
$100,000,000 plus accrued distributions from March __, 1997 on such Capital
Securities.
SECTION 2.12 Issuance of the Common Securities; Subscription and Purchase
of Debentures.
On the Closing Date, the Managing Member, on behalf of the Company, shall
execute in accordance with Section 5.2 and deliver to Group Common Securities
Certificates, registered in the name of Group, in an aggregate amount of 3,093
Common Securities having an aggregate Liquidation Amount of $3,093,000 against
receipt by the Company of an aggregate purchase price therefor of $3,093,000
plus accrued distributions from March __, 1997 on such Common Securities.
Contemporaneously therewith, the Managing Member, on behalf of the Company,
shall subscribe to and purchase from Group Debentures, registered in the name of
the Company and having an aggregate principal amount equal to $103,093,000, and,
in satisfaction of the purchase price plus accrued interest from March __, 1997
for such Debentures, the Company shall deliver to Group the sum of $103,093,000
(being the sum of the amounts delivered pursuant to (i) the second sentence of
Section 2.11 and (ii) the first sentence of this Section).
SECTION 2.13 Purpose.
The sole purpose of the Company is (a) to issue and sell LLC Securities,
(b) to use the proceeds from such sale to acquire the Debentures and (c) to
engage in those activities necessary or incidental thereto. The Company shall
not engage in any "financial or insurance business" within the meaning of
section 7704(d)(2) of the Code or in any other trade or business.
SECTION 2.14 Management and Control; Authorization to Enter into Certain
Transactions.
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(a) Except as otherwise provided herein, the business and affairs of the
Company shall be managed, and all actions required under this Agreement shall be
determined, solely and exclusively by the Managing Member, which shall have all
rights and powers on behalf and in the name of the Company to perform all acts
necessary or desirable to the objects and purposes of the Company. The Managing
Member shall conduct the affairs of the Company in accordance with the terms of
this Agreement.
(b) Subject to the limitations set forth in paragraph (c) of this Section,
the Managing Member on behalf of the Company shall have the authority to enter
into all transactions and agreements determined by the Managing Member to be
appropriate in exercising the authority, express or implied, otherwise granted
to them under this Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following, all in the name and on behalf of
the Company:
(i) issuing and selling the LLC Securities;
(ii) entering into, and executing, delivering and performing the
Certificate Depository Agreement and such other agreements as may be
necessary or desirable in connection with the purposes and function of the
Company;
(iii) registering the Capital Securities under the Securities Act of
1933, as amended, and under state securities or blue sky laws;
(iv) listing the Capital Securities upon such national securities
exchange or exchanges or automated quotation system or systems, if any, as
shall be determined by the Managing Member and registering the Capital
Securities under the Securities Exchange Act of 1934, as amended, and
preparing and filing all periodic and other reports and other documents
pursuant to the foregoing;
(v) entering into, and executing, delivering and performing the
Underwriting Agreement providing for the sale of the Capital Securities and
the Pricing Agreement relating thereto;
(vi) establishing the Payment Account;
(vii) purchasing the Debentures;
(viii) collecting interest, principal and any other payments made in
respect of the Debentures in the Payment Account;
(ix) distributing through the Paying Agent amounts owed to the
Securityholders in respect of the LLC Securities;
<PAGE> 16
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(x) exercising all of the rights, powers and privileges of a holder of
the Debentures including, subject to the provisions of this Agreement, the
granting or approval of waivers, consents or amendments or fights or powers
relating thereto and the execution of appropriate documents to evidence
such waivers, consents or amendments;
(xi) distributing the Company Property in accordance with the terms of
this Agreement;
(xii) sending notices and other information regarding the LLC
Securities and the Debentures to the Securityholders in accordance with
this Agreement;
(xiii) appointing a Paying Agent and Securities Registrar in
accordance with this Agreement;
(xiv) registering transfers of the LLC Securities in accordance with
this Agreement;
(xv) to the extent provided in this Agreement, winding up the affairs
of and liquidating the Company and the executing and filing a certificate
of cancellation with the Secretary of State of the State of Delaware;
(xvi) taking any action incidental to the foregoing as the Managing
Member may from time to time determine is necessary or advisable to give
effect to the terms of this Agreement for the benefit of the
Securityholders (without consideration of the effect of any such action on
any particular Securityholder).
(c) So long as this Agreement remains in effect, the Company (or the
Managing Member acting on behalf of the Company) shall not undertake any
business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Company (or the Managing Member on
behalf of the Company) shall not (i) acquire any investments or engage in any
activities not authorized by this Agreement, (ii) sell, assign, transfer,
exchange, mortgage, pledge, set-off or otherwise dispose of any of the Company
Property or interests therein, including to Securityholders, except as expressly
provided herein, (iii) take any action that would cause the Company to be
taxable as a corporation for United States federal income tax purposes, (iv)
incur any indebtedness for borrowed money or issue any other debt, (v) take or
consent to any action that would result in the placement of a Lien on any of the
Company Property, (vi) invest any proceeds received by the Company from holding
the Debentures, but shall distribute all such proceeds to Holders of LLC
Securities pursuant to the terms of this Agreement and of the LLC Securities,
(vii) acquire any assets other than the Company Property, (viii) possess any
power or otherwise act in such a way as to vary the Company Property, (ix)
possess any power or otherwise act in such a way as to vary the terms of the LLC
Securities in any way whatsoever (except to the extent expressly authorized in
this Agreement or by the terms of the LLC Securities) or (x) issue any
securities or other evidences of
<PAGE> 17
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beneficial ownership of, or beneficial interest in, the Company other than the
LLC Securities. The Managing Member shall defend all claims and demands of all
Persons at any time claiming any Lien on any of the Company Property adverse to
the interest of the Company or the Securityholders in their capacity as
Securityholders.
(d) Persons dealing with the Company are entitled to rely conclusively upon
the power and authority of the Managing Member herein set forth.
(e) Except as otherwise expressly provided herein, no Owner or Holder of
Capital Securities, in its capacity as a Member, shall take part in the
day-to-day management, operation or control of the business and affairs of the
Company. The Beneficial Owners and Holders of Capital Securities, in their
capacity as Members of the Company, shall not be agents of the Company and shall
not have any right, power or authority to transact any business in the name of
the Company or to act for or on behalf of or to bind the Company.
(f) Notwithstanding anything herein to the contrary, the Managing Member is
authorized and directed to conduct the affairs of the Company and to operate the
Company so that the Company will not be taxable as a corporation for United
States federal income tax purposes and so that the Debentures will be treated as
indebtedness of Group for United States federal income tax purposes. In this
connection, the Managing Member is authorized to take any action, not
inconsistent with applicable law, the Certificate of Formation or this
Agreement, that the Managing Member determines in its discretion to be necessary
or desirable for such purposes, as long as such action does not adversely affect
in any material respect the interests of the Holders of the Capital Securities.
SECTION 2.15 Members.
(a) The LLC Securities represent limited liability company Member interests
in the Company. The Company shall have two classes of Members, one represented
by the Capital Securities and the other represented by the Common Securities.
The Capital Securities and the Common Securities shall have such relative
rights, powers and duties as are provided for in this Agreement.
(b) A Person shall be admitted as a Member and shall become bound by the
terms of this Agreement, without execution of this Agreement, if such Person (or
a representative authorized by such Person orally, in writing or by other action
such as payment for an interest) complies with the conditions for becoming a
Member as set forth in Section 2.15(c) and requests (which request shall be
deemed to have been made upon acquisition of a Capital Security from the Company
or upon an assignment of a Capital Security from another Person) that the
records of the Company (maintained by or on behalf of the Company) reflect such
admission.
The Company shall be notified promptly of any change in the Holders of
Capital Securities. The Company will reflect the admission of a Member in the
records of the Company
<PAGE> 18
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(maintained by or on behalf of the Company) as soon as is reasonably practicable
after either of the following events: (i) in the case of a Person acquiring a
Capital Security directly from the Company, at the time of payment therefor, and
(ii) in the case of an assignment of a Capital Security, upon notification
thereof (the Company being entitled to assume, in the absence of knowledge to
the contrary, that proper payment has been made by the assignee).
(c) Whether acquiring a Capital Security directly from the Company or by
assignment, a Person shall be admitted as a Member upon becoming a Holder of a
Capital Security and the reflection of such Person's admission as a Member in
the records of the Company (maintained by or on behalf of the Company). The
consent of any other Member shall not be required for the admission of a Member.
(d) Each Member waives any and all rights that it may have to maintain an
action for partition of the Company's property.
(e) The Managing Member shall have no right to resign from the Company. Any
other Member may only resign from the Company prior to the dissolution or
winding-up of the Company upon the transfer and assignment of its Capital
Securities in accordance with the provisions of this Agreement. A resigning
Member shall not be entitled to receive any distribution and shall not otherwise
be entitled to receive the fair value of its interest in the Company represented
by its Capital Securities except as otherwise expressly provided for in this
Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1 Payment Account.
(a) On or prior to the Closing Date, the Company shall establish the
Payment Account. Transactions in the Payment Account shall be permitted solely
for the purpose of making deposits and withdrawals in accordance with this
Agreement. All monies and other property deposited or held from time to time in
the Payment Account shall be held by the Company in the Payment Account for the
exclusive benefit of the Securityholders and for distribution as herein
provided, including (and subject to) any priority of payments provided for
herein.
(b) The Company shall deposit in the Payment Account, promptly upon
receipt, all payments of principal of or interest or premium on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Company.
<PAGE> 19
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ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1 Distributions.
(a) Distributions from Company Property (including of Additional Amounts)
will be made on the LLC Securities at the rate and on the dates that payments of
interest (including of Additional Interest, as defined in the Indenture) are
made on the Debentures. Accordingly:
(i) Distributions on the LLC Securities shall be cumulative, and will
accumulate whether or not there are funds of the Company available for the
payment of Distributions. Distributions shall accrue from ________ __,
1997, and, except in the event (and to the extent) that Group exercises its
right to defer the payment of interest on the Debentures pursuant to the
Indenture, shall be payable semi-annually in arrears on ________ __ and
________ __, commencing on ________ __, 1997. If any date on which a
Distribution is otherwise payable on the LLC Securities is not a Business
Day, then the payment of such Distribution shall be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, payment of such Distribution shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date (each date on which Distributions
are payable in accordance with this Section 4.1(a), a "Distribution Date").
(ii) Assuming payments of interest on the Debentures are made when due
(and before giving effect to Additional Amounts, if applicable),
Distributions on the LLC Securities shall be payable at a rate of ___% per
annum of the Liquidation Amount of the LLC Securities. The amount of
Distributions payable for any Distribution period shall be computed on the
basis of a 360-day year of twelve 30-day months. The amount of
Distributions for any partial Distribution period shall be computed on the
basis of the number of days elapsed in a 360-day year of twelve 30-day
months. The amount of Distributions payable for any period shall include
the Additional Amounts, if any.
(iii) Distributions on the LLC Securities shall be made by the Company
from the Payment Account and shall be payable on each Distribution Date
only to the extent that the Company has funds then on hand and available in
the Payment Account for the payment of such Distributions.
(b) Distributions on the LLC Securities with respect to a Distribution Date
shall be payable to the Holders thereof as they appear on the Securities
Register for the LLC Securities on the relevant record date, which shall be one
Business Day prior to such Distribution Date; provided, however, that in the
event that the Capital Securities do not remain in book-entry-only
<PAGE> 20
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form, the relevant record date shall be 15 days prior to the relevant
Distribution Date (whether or not such record date is a Business Day).
(c) Notwithstanding anything to the contrary herein contained, the Company
shall not make any distribution under this Agreement to the extent that the
distribution would violate the provisions of Section 18-607 or 18-804 of the
Delaware Act.
SECTION 4.2 Redemption.
(a) On each Debenture Redemption Date and the Debenture Maturity Date, the
Company shall redeem a Like Amount of LLC Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Company by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date to each Holder of LLC Securities to be redeemed, at such
Holder's address appearing in the Security Register; provided no such notice
need be given for any redemption on the Debenture Maturity Date. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding LLC Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular LLC Securities to be redeemed;
(v) that on the Redemption Date the Redemption Price will become due
and payable upon each such LLC Security to be redeemed and that
Distributions thereon will cease to accrue on and after said date; and
(vi) if the Capital Securities are no longer in book-entry-only form,
the place and address where the Holders shall surrender their Capital
Securities Certificates.
(c) The LLC Securities redeemed on each Redemption Date shall be redeemed
at the Redemption Price with the proceeds from the contemporaneous redemption or
payment at stated maturity of Debentures. Redemptions of the LLC Securities
shall be made and the Redemption Price shall be payable on each Redemption Date
only to the extent that the Company has funds then on hand and available in the
Payment Account for the payment of such Redemption Price.
(d) If the Company gives a notice of redemption in respect of any Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date,
subject to Section 4.2(c), the
<PAGE> 21
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Company will, so long as the Capital Securities are in book-entry-only form,
irrevocably deposit with the Clearing Agency for the Capital Securities funds
sufficient to pay the applicable Redemption Price and will give such Clearing
Agency irrevocable instructions and authority to pay the Redemption Price to the
Holders thereof. If the Capital Securities are no longer in book-entry-only
form, the Company, subject to Section 4.2(c), will irrevocably deposit with the
Paying Agent funds sufficient to pay the applicable Redemption Price and will
give the Paying Agent irrevocable instructions and authority to pay the
Redemption Price to the Holders thereof upon surrender of their Capital
Securities Certificates. Notwithstanding the foregoing, Distributions payable on
or prior to the Redemption Date for any LLC Securities called for redemption
shall be payable to the Holders of such LLC Securities as they appear on the
Securities Register for the LLC Securities on the relevant record dates for the
related Distribution Dates. If notice of redemption shall have been given and
funds deposited as required, then upon the date of such deposit, all rights of
Securityholders holding LLC Securities so called for redemption will cease,
except the right of such Securityholders to receive the Redemption Price and any
Distribution payable on or prior to the Redemption Date, but without interest
thereon, and such LLC Securities will cease to be outstanding. In the event that
any date on which any Redemption Price is payable 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. In the event that payment of the Redemption Price in respect of any LLC
Securities called for redemption is improperly withheld or refused and not paid
either by the Company or by Group pursuant to the Guarantee, Distributions on
such LLC Securities will continue to accrue, at the then applicable rate, from
the Redemption Date originally established by the Company for such LLC
Securities to the date such Redemption Price is actually paid, in which case the
actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.
(e) Payment of the Redemption Price on the LLC Securities shall be made to
the recordholders thereof as they appear on the Securities Register for the LLC
Securities on the relevant record date, which shall be one Business Day prior to
the relevant Redemption Date; provided, however, that in the event that the
Capital Securities do not remain in book-entry-only form, the relevant record
date shall be the date fifteen days prior to the relevant Redemption Date.
(f) Subject to Section 4.3, if less than all the Outstanding LLC Securities
are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount
of LLC Securities to be redeemed shall be allocated on a pro rata basis (based
on Liquidation Amounts) among the Common Securities and the Capital Securities.
The particular Capital Securities to be redeemed shall be selected on a pro rata
basis (based upon Liquidation Amounts) not more than 60 days prior to the
Redemption Date by the Company from the Outstanding Capital Securities not
previously called for redemption, by such method as the Managing Member shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $1,000
<PAGE> 22
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or an integral multiple of $1,000 in excess thereof) of the Liquidation Amount
of Capital Securities of a denomination larger than $1,000. The Managing Member
shall promptly notify the Security Registrar in writing of the Capital
Securities selected for redemption and, in the case of any Capital Securities
selected for partial redemption, the Liquidation Amount thereof to be redeemed.
For all purposes of this Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Capital Securities shall relate, in the
case of any Capital Securities redeemed or to be redeemed only in part, to the
portion of the Liquidation Amount of Capital Securities that has been or is to
be redeemed.
SECTION 4.3 Subordination of Common Securities.
Payment of Distributions (including Additional Amounts, if applicable) on,
and the Redemption Price of, the LLC Securities, as applicable, shall be made,
subject to Section 4.2(f), pro rata among the Common Securities and the Capital
Securities based on the Liquidation Amount of the LLC Securities; provided,
however, that if on any Distribution Date or Redemption Date any Event of
Default resulting from a Debenture Event of Default shall have occurred and be
continuing, no payment of any Distribution (including Additional Amounts, if
applicable) on, or Redemption Price of, any Common Security, and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions (including Additional Amounts, if applicable) on all
Outstanding Capital Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price the full amount
of such Redemption Price on all Outstanding Capital Securities then called for
redemption, shall have been made or provided for, and all funds immediately
available to the Company shall first be applied to the payment in full in cash
of all Distributions (including Additional Amounts, if applicable) on, or the
Redemption Price of, Capital Securities then due and payable.
SECTION 4.4 Payment Procedures.
Payments of Distributions (including Additional Amounts, if applicable) in
respect of the Capital Securities shall be made by wire transfer, direct deposit
or check mailed to the address of the Person entitled thereto as such address
shall appear on the Securities Register or, if the Capital Securities are held
by a Clearing Agency, such Distributions shall be made to the Clearing Agency in
immediately available funds, which shall credit the relevant Persons' accounts
at such Clearing Agency on the applicable Distribution Dates. Payments in
respect of the Common Securities shall be made in such manner as shall be
mutually agreed in writing between the Company and the Common Securityholder.
SECTION 4.5 Tax Returns and Reports.
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(a) The Company shall prepare (or cause to be prepared), at Group's
expense, and file all United States federal, state and local tax and information
returns and reports required to be filed by or in respect of the Company. In
this regard, the Company shall (a) prepare and file (or cause to be prepared and
filed) the appropriate Internal Revenue Service Form required to be filed in
respect of the Company in each taxable year of the Company and (b) prepare and
furnish (or cause to be prepared and furnished) to each Securityholder the
appropriate Internal Revenue Service form, if any, and the information required
to be provided by the Company on such form. The Company shall comply with United
States federal withholding and backup withholding tax laws and information
reporting requirements with respect to any payments to Securityholders under the
LLC Securities.
(b) Group is hereby designated as the Company's "Tax Matters Partner" under
Code Section 6231(a)(7) and shall have all the powers and responsibilities of
such position as provided in the Code. Group is specifically directed and
authorized to take whatever steps Group, in its discretion, deems necessary or
desirable to perfect such designation, including filing any forms or documents
with the Internal Revenue Service and taking such other action as may from time
to time be required under the regulations issued under the Code.
SECTION 4.6 Payment of Taxes, Duties, Etc. of the Company.
Upon receipt under the Debentures of Additional Sums, the Company shall
promptly pay any taxes, duties or governmental charges of whatsoever nature
(other than withholding taxes) imposed on the Company by the United States or
any other taxing authority.
SECTION 4.7 Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Capital Securities shall be
reduced by the amount of any corresponding payment such Holder (or an Owner with
respect to the Holder's Capital Securities) has directly received pursuant to
[Section 5.9] of the Indenture or Section 5.14 of this Agreement or the
Guarantee.
ARTICLE V
LLC SECURITIES CERTIFICATES
SECTION 5.1 Initial Membership; Resignation of Chestnut.
Upon the formation of the Company and the contribution by Group and
Chestnut pursuant to Section 2.10 and until the issuance of the LLC Securities,
and at any time during which no LLC Securities are outstanding, Group and
Chestnut shall be the sole members of the Company. Effective upon the issuance
of the LLC Securities, Chestnut shall be deemed to have resigned as a member of
the Company.
<PAGE> 24
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SECTION 5.2 The LLC Securities Certificates.
The Capital Securities Certificates shall be issued in minimum
denominations of $1,000 Liquidation Amount and integral multiples of $1,000 in
excess thereof, and the Common Securities Certificates shall be issued in
denominations of $500 Liquidation Amount and integral multiples thereof. The LLC
Securities Certificates shall be executed on behalf of the Company by manual or
facsimile signature of a Managing Member and, if executed on behalf of the
Company by facsimile, countersigned by the Authentication Agent by the manual
signature of an authorized signatory thereof. LLC Securities Certificates
bearing the manual signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of a Managing
Member or, if executed on behalf of the Company by facsimile, countersigned by
the Authentication Agent by the manual signature of individuals who were, at the
time when such signatures shall have been affixed, authorized to sign on behalf
of the Authentication Agent, shall be validly issued and entitled to the
benefits of this Agreement, notwithstanding that such individuals or any of them
shall have ceased to be so authorized prior to the delivery of such LLC
Securities Certificates or did not hold such offices at the date of delivery of
such LLC Securities Certificates. A transferee of a LLC Securities Certificate
shall become a Securityholder, and shall be entitled to the rights and subject
to the obligations of a Securityholder hereunder, upon due registration of such
LLC Securities Certificate in such transferee's name pursuant to Sections 5.4,
5.11 and 5.13.
SECTION 5.3 Execution and Delivery of LLC Securities Certificates.
On the Closing Date, the Company shall cause LLC Securities Certificates,
in an aggregate Liquidation Amount as provided in Sections 2.11 and 2.12, to be
executed on behalf of the Company and delivered to or upon the written order of
Group in authorized denominations.
SECTION 5.4 Registration of Transfer and Exchange of Capital Securities
Certificates.
The Company shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering LLC Securities Certificates and transfers and exchanges of Capital
Securities Certificates (the "Securities Register") in which the transfer agent
and registrar designated by the Company (the "Securities Registrar"), subject to
such reasonable regulations as it may prescribe, shall provide for the
registration of Capital Securities Certificates and Common Securities
Certificates (subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Capital Securities
Certificates as herein provided. Wilmington Trust Company, a Delaware banking
corporation, shall be the initial Securities Registrar.
Upon surrender for registration of transfer of any Capital Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Managing Member shall execute on behalf of the Company (and if executed on
behalf of the Company by a facsimile signature, such certificate shall be
countersigned by the Authentication Agent as provided in Section 5.2) and
<PAGE> 25
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deliver, in the name of the designated transferee or transferees, one or more
new Capital Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount dated the date of execution by such Managing
Member. The Securities Registrar shall not be required to register the transfer
of any Capital Securities that have been called for redemption during a period
beginning at the opening of business 15 days before the day of selection for
such redemption.
At the option of a Holder, Capital Securities Certificates may be exchanged
for other Capital Securities Certificates in authorized denominations of the
same class and of a like aggregate Liquidation Amount upon surrender of the
Capital Securities Certificates to be exchanged at the office or agency
maintained pursuant to Section 5.8.
Every Capital Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Managing Member or, if such
Capital Securities Certificates so presented or surrendered was executed by the
Managing Member by facsimile signature, to the Authentication Agent and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Capital Securities Certificate surrendered for registration of
transfer or exchange shall be cancelled and subsequently disposed of by the
Managing Member or the Securities Registrar in accordance with such Person's
customary practice.
No service charge shall be made for any registration of transfer or
exchange of Capital Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Capital Securities
Certificates.
SECTION 5.5 Mutilated, Destroyed, Lost or Stolen LLC Securities
Certificates.
If (a) any mutilated LLC Securities Certificate shall be surrendered to the
Securities Registrar, or if the Securities Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any LLC Securities
Certificate and (b) there shall be delivered to the Securities Registrar and the
Managing Member such security or indemnity as may be required by them to save
each of them harmless, then in the absence of notice that such LLC Securities
Certificate shall have been acquired by a bona fide purchaser, the Managing
Member, on behalf of the Company shall execute by manual or facsimile signature
and, if executed on behalf of the Company by facsimile signature, such
certificate shall be countersigned by the Authentication Agent, and make
available for delivery, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen LLC Securities Certificate, a new LLC Securities
Certificate of like class, tenor and denomination. In connection with the
issuance of any new LLC Securities Certificate under this Section, the Company
or the Securities Registrar 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 LLC Securities Certificate issued pursuant to this
Section shall constitute conclusive evidence of a limited liability company
interest in the Company, as if
<PAGE> 26
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originally issued, whether or not the lost, stolen or destroyed LLC Securities
Certificate shall be found at any time.
SECTION 5.6 Persons Deemed Securityholders.
The Company or the Securities Registrar shall treat the Person in whose
name any LLC Securities Certificate shall be registered in the Securities
Register as the owner of such LLC Securities Certificate for the purpose of
receiving Distributions and for all other purposes whatsoever, and neither the
Company nor the Securities Registrar shall be bound by any notice to the
contrary.
SECTION 5.7 Access to List of Securityholders' Names and Addresses.
Each Holder and each Owner shall be deemed to have agreed not to hold the
Managing Member accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
SECTION 5.8 Maintenance of Office or Agency.
The Company shall maintain an office or offices or agency or agencies where
Capital Securities Certificates may be surrendered for registration of transfer
or exchange and where notices and demands to or upon the Company in respect of
the LLC Securities Certificates may be served. The Company initially designates
Wilmington Trust Company, 1100 North Market Street, Wilmington, Delaware 19890,
Attention: Corporate Trust Administration, as its principal corporate trust
office for such purposes. The Company shall give prompt written notice to the
Securityholders of any change in the location of the Securities Register or any
such office or agency.
SECTION 5.9 Appointment of Paying Agent.
The Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such Distributions to the
Managing Member. Any Paying Agent shall have the revocable power to withdraw
funds from the Payment Account for the purpose of making the Distributions
referred to above. The Managing Member may revoke such power and remove the
Paying Agent if they determine in their sole discretion that the Paying Agent
shall have failed to perform its obligations under this Agreement in any
material respect. The Paying Agent shall initially be Wilmington Trust Company,
and any co-paying agent chosen by Wilmington Trust Company and acceptable to the
Managing Member. Any Person acting as Paying Agent shall be permitted to resign
as Paying Agent upon 30 days' written notice to the Company. In the event that
Wilmington Trust Company shall no longer be the Paying Agent or a successor
Paying Agent shall resign or its authority to act be revoked, the Managing
Member shall appoint a successor that is acceptable to them to act as Paying
Agent (which shall be a bank or trust company). Such successor Paying Agent or
any additional Paying Agent appointed by
<PAGE> 27
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the Managing Member shall execute and deliver to the Company an instrument in
which such successor Paying Agent or additional Paying Agent shall agree with
the Company that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders entitled thereto
until such sums shall be paid to such Securityholders. The Paying Agent shall
return all unclaimed funds to the Company and upon resignation or removal of a
Paying Agent such Paying Agent shall also return all funds in its possession to
the Company. Any reference in this Agreement to the Paying Agent shall include
any co-paying agent unless the context requires otherwise.
SECTION 5.10 Ownership of Common Securities by Group.
On the Closing Date, Group shall acquire and retain beneficial and record
ownership of the Common Securities. To the fullest extent permitted by law,
other than a transfer in connection with a consolidation or merger of Group into
another Person, or any conveyance, transfer or lease by Group of its properties
and assets substantially as an entirety to any Person, pursuant to [Section 8.1]
of the Indenture, any attempted transfer of the Common Securities shall be void.
Each Common Securities Certificate shall contain a legend stating "THIS
CERTIFICATE IS NOT TRANSFERABLE".
SECTION 5.11 Book-Entry Capital Securities Certificates; Common Securities
Certificate.
(a) The Capital Securities Certificates, upon original issuance, will be
issued in the form of a typewritten Capital Securities Certificate or
Certificates representing Book-Entry Capital Securities, to be delivered to The
Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the
Company. Such Capital Securities Certificate or Certificates shall initially be
registered on the Securities Register in the name of Cede & Co., the nominee of
the initial Clearing Agency, and no Owner will receive a Definitive Capital
Securities Certificate representing such Owner's interest in such Capital
Securities, except as provided in Section 5.13. Unless and until Definitive
Capital Securities Certificates have been issued to Owners pursuant to Section
5.13:
(i) the provisions of this Section 5.11(a) shall be in full force and
effect;
(ii) the Securities Registrar and the Managing Member shall be
entitled to deal with the Clearing Agency for all purposes of this
Agreement relating to the Book-Entry Capital Securities (including the
payment of the Liquidation Amount of and Distributions on the Capital
Securities evidenced by Book-Entry Capital Securities Certificates and the
giving of instructions or directions to Owners of Capital Securities
evidenced by Book-Entry Capital Securities Certificates) as the sole Holder
of Capital Securities evidenced by Book-Entry Capital Securities
Certificates and shall have no obligations to the Owners thereof;
<PAGE> 28
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(iii) to the extent that the provisions of this Section 5.11 conflict
with any other provisions of this Agreement, the provisions of this Section
5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Capital Securities
Certificates shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Certificate Depository Agreement, unless and until Definitive
Capital Securities Certificates are issued pursuant to Section 5.13, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments on the Capital
Securities to such Clearing Agency Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to Group in the form of a definitive Common
Securities Certificate.
SECTION 5.12 Notices to Clearing Agency.
To the extent that a notice or other communication to the Owners is
required under this Agreement, unless and until Definitive Capital Securities
Certificates shall have been issued to Owners pursuant to Section 5.13, the
Company shall give all such notices and communications specified herein to be
given to Owners to the Clearing Agency, and shall have no obligations to the
Owners.
SECTION 5.13 Definitive Capital Securities Certificates.
If (a) the Clearing Agency notifies the Company that it is no longer
willing or able to properly discharge its responsibilities with respect to the
Capital Securities Certificates, and the Managing Member is unable to locate a
qualified successor, (b) the Managing Member at its option elects to terminate
the book-entry system through the Clearing Agency or (c) after the occurrence of
a Debenture Event of Default, Owners of Capital Securities Certificates
representing beneficial interests aggregating at least a majority of the
Liquidation Amount advise the Company in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best interest
of the Owners of Capital Securities Certificates, then the Company shall notify
the Clearing Agency, and the Clearing Agency, in accordance with its customary
rules and procedures, shall notify all Clearing Agency Participants for whom it
holds Capital Securities of the occurrence of any such event and of the
availability of the Definitive Capital Securities Certificates to Owners of such
class or classes, as applicable, requesting the same. Upon surrender to the
Company of the typewritten Capital Securities Certificate or Certificates
representing the Book-Entry Capital Securities by the Clearing Agency,
accompanied by registration instructions, the Managing Member shall execute the
Definitive Capital Securities Certificates in accordance with the instructions
of the Clearing Agency which, if executed on behalf of the Company by facsimile,
shall be countersigned by a transfer agent or its agent. Neither the Securities
Registrar nor the Managing Member shall be liable for any delay in
<PAGE> 29
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delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Capital Securities Certificates, the Company shall recognize the Holders of the
Definitive Capital Securities Certificates as Securityholders. The Definitive
Capital Securities Certificates shall be typewritten, printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Managing Member that meets the requirements of any stock exchange or
automated quotation system on which the Capital Securities are then listed or
approved for trading, as evidenced by the execution thereof by the Managing
Member.
SECTION 5.14 Rights of Securityholders.
(a) The legal title to the Company Property is vested exclusively in the
Company (in its capacity as such) in accordance with Section 2.9, and the
Securityholders shall not have any right or title therein other than the limited
liability company interest in the Company conferred by their LLC Securities and
they shall have no right to call for any partition or division of property,
profits or rights of the Company except as described below. The LLC Securities
shall be personal property giving only the rights specifically set forth therein
and in this Agreement. The LLC Securities shall have no preemptive or similar
rights and when issued and delivered to Securityholders against payment of the
purchase price therefor will be fully paid and nonassessable by the Company. No
Holder of Capital Securities, in its capacity as a Member of the Company, shall
be obligated personally for any debt, obligation or liability of the Company
solely by reason of being a Member of the Company.
(b) For so long as any Capital Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of at least 25% in Liquidation Amount of the Capital Securities then
Outstanding shall have such right by a notice in writing to the Company and the
Debenture Trustee; and upon any such declaration such principal amount of and
the accrued interest on all of the Debentures shall become immediately due and
payable as set forth in the Indenture, provided that the payment of principal,
premium and interest on such Debentures shall remain subordinated to the extent
provided in the Indenture.
At any time after such a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as in the Indenture
provided, the Holders of a majority in Liquidation Amount of the Capital
Securities, by written notice to the Company, may rescind and annul such
declaration and its consequences if:
(i) Group has paid or deposited with the Debenture Trustee a sum
sufficient to pay
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(A) all overdue installments of interest (including any
Additional Interest (as defined in the Indenture)) on all of the
Debentures,
(B) the principal of (and premium, if any, on) any Debentures
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debentures,
and
(C) all sums paid or advanced by the Debenture Trustee under the
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Debenture Trustee and the Company, their agents and
counsel; and
(ii) all Events of Default with respect to the Debentures, other than
the non-payment of the principal of the Debentures which has become due
solely by such acceleration, have been cured or waived as provided in
[Section 5.14] of the Indenture.
The Holders of a majority in aggregate Liquidation Amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past default under the Indenture, except a default in the payment of
principal, premium or interest (unless all Events of Default with respect to the
Debentures, other than the non-payment of the principal of the Debentures which
has become due solely by such acceleration, have been cured or annulled as
provided in [Section 5.2] of the Indenture and Group has paid or deposited with
the Debenture Trustee a sum sufficient to pay all overdue installments of
interest (including any Additional Interest (as defined in the Indenture)) on
the Debentures, the principal of (and premium, if any, on) any Debentures which
have become due otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Debentures, and all sums paid or advanced by
the Debenture Trustee under the Indenture and the reasonable compensation,
expenses, disbursements and advances of the Debenture Trustee and the Company,
their agents and counsel) or a default in respect of a covenant or provision
which under the Indenture cannot be modified or amended without the consent of
the holder of each outstanding Debenture. No such rescission shall affect any
subsequent default or impair any right consequent thereon.
Upon receipt by the Company of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Capital
Securities all or part of which is represented by Book-Entry Capital Securities
Certificates, a record date shall be established for determining Holders of
Outstanding Capital Securities entitled to join in such notice, which record
date shall be at the close of business on the day the Company receives such
notice. The Holders of Outstanding Capital Securities on such record date, or
their duly designated proxies, and only such Persons, shall be entitled to join
in such notice, whether or not such Holders remain Holders after such record
date; provided, that, unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day which is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case
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may be, shall automatically and without further action by any Holder be canceled
and of no further effect. Nothing in this paragraph shall prevent a Holder, or a
proxy of a Holder, from giving, after expiration of such 90-day period, a new
written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice which has
been canceled pursuant to the proviso to the preceding sentence, in which event
a new record date shall be established pursuant to the provisions of this
Section 5.14(b).
(c) For so long as any Capital Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Agreement and
the Indenture, upon a Debenture Event of Default specified in [Section 5.1(1) or
5.1(2)] of the Indenture, any Holder of Capital Securities shall have the right
to institute a proceeding directly against Group, pursuant to [Section 5.9] of
the Indenture, for enforcement of payment to such Holder of the principal amount
of or premium or interest on Debentures having a principal amount equal to the
Liquidation Amount of the Capital Securities of such Holder (a "Direct Action").
Except as set forth in Section 5.14(b) and this Section 5.14(c), the Holders of
Capital Securities shall have no right to exercise directly any right or remedy
available to the holders of, or in respect of, the Debentures.
SECTION 5.15 CUSIP Numbers.
The Company in issuing the Capital Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Company shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Capital Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Capital Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.1 Limitations on Voting Rights.
(a) Except as provided in this Section, in Sections 5.14 and 9.3 and in the
Indenture and as otherwise required by law, no Holder of Capital Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Company or the obligations of
the parties hereto.
(b) So long as any Debentures are held by the Company, the Company shall
not (i) direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or executing any trust or power
conferred on the Debenture Trustee with respect to such Debentures, (ii) waive
any past default which is waiveable under [Section 5.14]
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of the Indenture, (iii) exercise any right to rescind or annul a declaration
that the principal of all the Debentures shall be due and payable or (iv)
consent to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a majority in
Liquidation Amount of all Outstanding Capital Securities, provided, however,
that where a consent under the Indenture would require the consent of each
holder of Debentures affected thereby, no such consent shall be given by the
Company without the prior written consent of each Holder of Capital Securities.
The Company shall not revoke any action previously authorized or approved by a
vote of the Holders of Capital Securities, except by a subsequent vote of the
Holders of Capital Securities. The Company shall notify all Holders of the
Capital Securities of any notice of default received from the Debenture Trustee
with respect to the Debentures. In addition to obtaining the foregoing approvals
of the Holders of the Capital Securities, prior to taking any of the foregoing
actions, the Company shall, at the expense of Group, obtain an Opinion of
Counsel experienced in such matters to the effect that such action shall not
cause the Company to be taxable as a corporation for United States federal
income tax purposes.
(c) If any proposed amendment to this Agreement provides for, or the
Company otherwise proposes to effect, (i) any action that would adversely affect
in any material respect the powers, preferences or special rights of the Capital
Securities, whether by way of amendment to the Agreement or otherwise, or (ii)
the dissolution, winding-up or termination of the Company, other than pursuant
to the terms of this Agreement, then the Holders of Outstanding Capital
Securities as a class will be entitled to vote on such amendment or proposal and
such amendment or proposal shall not be effective except with the approval of
the Holders of at least a majority in Liquidation Amount of the Outstanding
Capital Securities. Notwithstanding any other provision of this Agreement, no
amendment to this Agreement may be made if, as a result of such amendment, it
would cause the Company to be taxable as a corporation for United States federal
income tax purposes.
SECTION 6.2 Notice of Meetings.
Notice of all meetings of the Capital Securityholders, stating the time,
place and purpose of the meeting, shall be given by the Company pursuant to
Section 9.9 to each Capital Securityholder of record, at his registered address,
at least 15 days and not more than 90 days before the meeting. At any such
meeting, any business properly before the meeting may be so considered whether
or not stated in the notice of the meeting. Any adjourned meeting may be held as
adjourned without further notice.
SECTION 6.3 Meetings of Capital Securityholders.
No annual meeting of Securityholders is required to be held. The Company,
however, shall call a meeting of Capital Securityholders to vote on any matter
as to which Capital Securityholders are entitled to a vote upon the written
request of the Capital Securityholders of
<PAGE> 33
29
record of 25% of the Outstanding Capital Securities (based upon their
Liquidation Amount) and the Managing Member may, at any time in its discretion,
call a meeting of Capital Securityholders to vote on any matters as to which
Capital Securityholders are entitled to vote.
Capital Securityholders of record of 50% of the Outstanding Capital
Securities (based upon their Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Capital Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Capital
Securityholders of record present, in person or by proxy, holding at least a
majority of the Outstanding Capital Securities (based upon their Liquidation
Amount) held by holders of record of Outstanding Capital Securities present,
either in person or by proxy, at such meeting shall constitute the action of the
Capital Securityholders, unless this Agreement requires a greater number of
affirmative votes.
SECTION 6.4 Voting Rights.
Securityholders shall be entitled to one vote for each $1,000 of
Liquidation Amount represented by their LLC Securities in respect of any matter
as to which such Securityholders are entitled to vote.
SECTION 6.5 Proxies, etc.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Company, or with such other
officer or agent of the Company as the Managing Member may direct, for
verification prior to the time at which such vote shall be taken. Proxies may be
solicited in the name of the Managing Member or one or more officers of the
Managing Member. Only Securityholders of record shall be entitled to vote. When
LLC Securities are held jointly by several Persons, any one of them may vote at
any meeting in person or by proxy in respect of such LLC Securities, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such LLC Securities. A proxy
purporting to be executed by or on behalf of a Securityholder shall be deemed
valid unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger. No proxy shall be valid more than three
years after its date of execution.
SECTION 6.6 Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be taken
without a meeting if Securityholders holding at least a majority of all
Outstanding LLC Securities (based upon their Liquidation Amount) entitled to
vote in respect of such action (or such larger
<PAGE> 34
30
proportion thereof as shall be required by any express provision of this
Agreement) shall consent to the action in writing.
SECTION 6.7 Record Date for Voting and Other Purposes.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any Distribution on the LLC Securities in respect of which a record date is not
otherwise provided for in this Agreement, or for the purpose of any other
action, the Company may from time to time fix a date, not more than 90 days
prior to the date of any meeting of Securityholders or the payment of a
Distribution or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes.
SECTION 6.8 Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Agreement to be given, made or taken
by Securityholders or Owners may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Securityholders or
Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to the Managing Member. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders or
Owners signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Managing Member, if
made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which any Managing Member receiving the same deems sufficient.
The ownership of Capital Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Securityholder of any LLC Security shall bind every future
Securityholder of the same LLC Security and the Securityholder of every LLC
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered
<PAGE> 35
31
to be done by the Managing Member or the Company in reliance thereon, whether or
not notation of such action is made upon such LLC Security.
Without limiting the foregoing, a Securityholder entitled hereunder to take
any action hereunder with regard to any particular LLC Security may do so with
regard to all or any part of the Liquidation Amount of such LLC Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the Managing
Member with respect to the authenticity, validity or binding nature of any
request, demand, authorization, direction, consent, waiver or other Act of such
Securityholder under this Article VI, then the determination of such matter by
the Managing Member, in good faith, shall be conclusive with respect to such
matter.
ARTICLE VII
DISSOLUTION, LIQUIDATION AND MERGER
SECTION 7.1 Dissolution Upon Expiration Date.
Unless earlier dissolved, the Company shall automatically dissolve on
________ __, 2052 (the "Expiration Date"), and thereafter of the Company
Property shall be distributed in accordance with Section 7.4.
SECTION 7.2 Early Dissolution.
The first to occur of any of the following events is an "Early Dissolution
Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the dissolution
or liquidation of, the Holder of the Common Securities;
(b) the written direction to the Company from Group at any time to dissolve
the Company and to distribute the Debentures to Securityholders in exchange for
the Capital Securities (which direction is optional and wholly within the
discretion of Group);
(c) the redemption of all of the Capital Securities in connection with the
redemption or maturity of all of the Debentures; and
(d) the entry of an order for dissolution of the Company by a court of
competent jurisdiction.
<PAGE> 36
32
SECTION 7.3 Termination.
As soon as is practicable after the occurrence of an event referred to in
Section 7.1 or Section 7.2, and upon the completion of the winding up and
liquidation of the Company, the Managing Member (who is hereby authorized to
take such action) shall file a certificate of cancellation with the Secretary of
State of the State of Delaware terminating the Company and, upon such filing,
the respective obligations and responsibilities of the Managing Member and the
Company continued hereby shall terminate.
SECTION 7.4 Liquidation.
(a) If an Early Dissolution Event specified in clause (a), (b) or (d) of
Section 7.2 occurs or upon the Expiration Date, the Company shall be wound up
and liquidated by the Managing Member as expeditiously as the Managing Member
determines to be possible by distributing, after satisfaction or the making of
reasonable provisions for the payment of liabilities to creditors of the Company
as provided by applicable law, to each Securityholder a Like Amount of
Debentures, subject to Section 7.4(d). Notice of liquidation shall be given by
the Company by first-class mail, postage prepaid mailed not later than 30 nor
more than 60 days prior to the Liquidation Date to each Holder of LLC Securities
at such Holder's address appearing in the Securities Register. All notices of
liquidation shall:
(i) state the CUSIP Number of the LLC Securities;
(ii) state the Liquidation Date;
(iii) state that from and after the Liquidation Date, the LLC
Securities will no longer be deemed to be Outstanding and any LLC
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iv) provide such information with respect to the mechanics by which
Holders may exchange LLC Securities Certificates for Debentures, or if
Section 7.4(d) applies receive a Liquidation Distribution, as the Managing
Member shall deem appropriate.
(b) Except where Section 7.2(c) or 7.4(d) applies, in order to effect the
liquidation of the Company and distribution of the Debentures to
Securityholders, the Managing Member shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding LLC Securities Certificates.
(c) Except where Section 7.2(c) or 7.4(d) applies, after the Liquidation
Date, (i) the LLC Securities will no longer be deemed to be Outstanding, (ii)
certificates representing a Like Amount of Debentures will be issued to Holders
of LLC Securities Certificates, upon surrender
<PAGE> 37
33
of such certificates to the Company or its agent for exchange, (iii) the
Managing Member shall use its best efforts to have the Debentures listed on each
exchange or automated quotation system (if any) as the Capital Securities are
then listed or traded, (iv) any LLC Securities Certificates not so surrendered
for exchange will be deemed to represent a Like Amount of Debentures, accruing
interest at the rate provided for in the Debentures from the last Distribution
Date on which a Distribution was made on such LLC Securities Certificates until
such certificates are so surrendered (and until such certificates are so
surrendered, no payments of interest or principal will be made to Holders of LLC
Securities Certificates with respect to such Debentures) and (v) all rights of
Securityholders holding LLC Securities will cease, except the right of such
Securityholders to receive Debentures upon surrender of LLC Securities
Certificates.
(d) In the event that, notwithstanding the other provisions of this Section
7.4, whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Debentures in the manner provided
herein is determined by the Managing Member not to be practical, the Company
shall be dissolved and wound up by the Managing Member and the Company Property
shall be liquidated by the Managing Member. In such event, on the date of the
dissolution of the Company, Securityholders will be entitled to receive out of
the assets of the Company available for distribution to Securityholders, after
satisfaction of liabilities to creditors of the Company as provided by
applicable law, an amount equal to the Liquidation Amount per LLC Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"). If, upon any such dissolution, the
Liquidation Distribution can be paid only in part because the Company has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts payable
by the Company on the LLC Securities shall be paid on a pro rata basis (based
upon Liquidation Amounts). The Holder of the Common Securities will be entitled
to receive Liquidation Distributions upon any such dissolution pro rata
(determined as aforesaid) with Holders of Capital Securities, except that, if a
Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a priority over the Common Securities.
SECTION 7.5 Mergers, Consolidations, Amalgamations or Replacements of the
Company.
The Company may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except pursuant
to this Article VII. At the request of the Managing Member and without the
consent of the Holders of the Capital Securities, the Company may merge with or
into, consolidate, amalgamate, or be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to a limited liability
company organized as such under the laws of any State; provided, that (i) such
successor entity expressly assumes all of the obligations of the Company with
respect to the Capital Securities and substitutes for the Capital Securities
other securities having substantially the same rights, powers and privileges and
other terms as the Capital Securities (the "Successor Securities") so long as
the Successor Securities rank the same as the Capital Securities rank in
priority with respect to distributions and payments upon
<PAGE> 38
34
liquidation, redemption and otherwise, (ii) the Managing Member expressly
appoints the managing members of such successor entity possessing the same
powers and duties as the Managing Member, (iii) the Successor Securities are
listed or traded, or any Successor Securities will be listed upon notification
of issuance, on any national securities exchange or automated quotation system
on which the Capital Securities are then listed or traded, if any, (iv) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not cause the Capital Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
Holders of the Capital Securities (including any Successor Securities) in any
material respect, (vi) such successor entity has a purpose identical to that of
the Company, (vii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Managing Member has received an
Opinion of Counsel to the effect that such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Capital Securities (including
any Successor Securities) in any material respect and (viii) Group, or any
successor permitted pursuant to Section 5.10 hereof, owns all of the common
securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee. Notwithstanding the foregoing, the Company shall not, except
with the consent of Holders of 100% in Liquidation Amount of the Capital
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 Person or permit any other Person to consolidate, amalgamate, merge
with or into, or replace it if such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease would cause the Company or the
successor entity to be taxable as a corporation for United States federal income
tax purposes.
ARTICLE VIII
BOOKS AND RECORDS
SECTION 8.1 Books and Records; Accounting.
The Managing Member shall keep or cause to be kept at the address of any of
the Managing Member (or at such other place as the Managing Member shall advise
the Holders of Capital Securities in writing) true and full books and records
regarding the status of the business and financial condition of the Company.
SECTION 8.2 Financial Statements.
The Managing Member shall, as soon as available after the end of each
fiscal year, cause to be prepared and mailed to each Holder of Capital
Securities the unaudited financial statements
<PAGE> 39
35
of the Company for such fiscal year prepared in accordance with generally
accepted accounting principles.
SECTION 8.3 Fiscal Year.
The fiscal year of the Company shall, for all purposes (except as otherwise
required by the Code), begin on January 1 and end on December 31 of each year.
SECTION 8.4 Inspection of Records.
Upon reasonable notice to the Managing Member, the records of the Company
shall be open to inspection by Securityholders during normal business hours for
any purpose reasonably related to such Securityholder's interest as a
Securityholder. Notwithstanding the foregoing, the Managing Member may, to the
maximum extent permitted by law, keep confidential from the Securityholders any
information the disclosure of which the Managing Member reasonably believe is
not in the best interest of the Company or could damage the Company or its
business or which the Company or the Managing Member are required by law or by
an agreement with any Person to keep confidential.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Limitation of Rights of Securityholders.
The death, incapacity, liquidation, dissolution, termination or bankruptcy
of any Person having an interest, beneficial or otherwise, in LLC Securities
shall not operate to terminate this Agreement, nor entitle the legal
representatives or heirs of such Person or any Securityholder for such Person,
to claim an accounting, take any action or bring any proceeding in any court for
a partition or winding up of the arrangements contemplated hereby, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.
SECTION 9.2 Liability of the Common Securityholder.
The Holder of the Common Securities shall be liable for all of the debts
and obligations of the Company (other than with respect to the Securities) to
the extent not satisfied out of the Company's assets.
SECTION 9.3 Amendment.
(a) This Agreement may be amended from time to time by the Managing Member
without the consent of Holders of the Capital Securities (i) to cure any
ambiguity, correct or
<PAGE> 40
36
supplement any provision herein which may be inconsistent with any other
provision herein, or to make any other provisions with respect to matters or
questions arising under this Agreement, which shall not be inconsistent with the
other provisions of this Agreement, (ii) to modify, eliminate or add to any
provisions of this Agreement to such extent as shall be necessary to ensure that
the Company will not be taxable as a corporation at all times that any LLC
Securities are outstanding or (iii) to modify, eliminate or add to any
provisions of this Agreement to such extent as shall be necessary to meet the
requirements of any national securities exchange or automated quotations system
on which the Company seeks to list the Capital Securities; provided, however,
that in the case of clause (i), (ii) or (iii), such action shall not adversely
affect in any material respect the interests of any holder of Capital
Securities, and any amendments of this Agreement shall become effective when
notice thereof is given to the holders of Capital Securities.
(b) Except as provided in Section 9.3(c) hereof, any provision of this
Agreement may be amended by the Managing Member with (i) the consent of LLC
Securityholders representing not less than a majority (based upon Liquidation
Amounts) of the LLC Securities then Outstanding and (ii) receipt by the Company
of an Opinion of Counsel to the effect that such amendment or the exercise of
any power granted to the Managing Member in accordance with such amendment will
not result in the Company being taxable as a corporation for United States
federal income tax purposes.
(c) In addition to and notwithstanding any other provision in this
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 6.3 or 6.6 hereof), this Agreement may
not be amended to (i) change the amount or timing of any Distribution on the LLC
Securities or otherwise adversely affect the amount of any Distribution required
to be made in respect of the LLC Securities as of a specified date or (ii)
restrict the right of a Securityholder to institute suit for the enforcement of
any such payment on or after such date; notwithstanding any other provision
herein, without the unanimous consent of the Securityholders (such consent being
obtained in accordance with Section 6.3 or 6.6 hereof), this paragraph (c) of
this Section 9.3 may not be amended.
(d) Notwithstanding any other provisions of this Agreement, the Company
shall not amend this Agreement in any way which would cause the Company to be
taxable as a corporation for United States federal income tax purposes.
(e) Notwithstanding anything in this Agreement to the contrary, without the
consent of Group, this Agreement may not be amended in a manner which imposes
any additional obligation on Group.
(f) In the event that any amendment to this Agreement is made, the Company
shall promptly provide to Group a copy of such amendment.
SECTION 9.4 Separability.
<PAGE> 41
37
In case any provision in this Agreement or in the LLC Securities
Certificates 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.
SECTION 9.5 Governing Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE COMPANY AND THE MANAGING MEMBER WITH RESPECT TO THIS
AGREEMENT AND THE LLC SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES).
SECTION 9.6 Payments Due on Non-Business Day.
If the date fixed for any payment on any LLC Security shall be a day that
is not a Business Day, then such payment need not be made on such date but may
be made on the next succeeding day that is a Business Day (except as otherwise
provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as
though made on the date fixed for such payment, and no interest shall accrue
thereon for the period after such date.
SECTION 9.7 Successors.
This Agreement shall be binding upon and shall inure to the benefit of any
successor to the Securityholders and Group, including any successor by operation
of law. Except in connection with a consolidation, merger or sale involving
Group that is permitted under [Article Eight] of the Indenture and pursuant to
which the assignee agrees in writing to perform Group's obligations hereunder,
Group shall not assign its obligations hereunder.
SECTION 9.8 Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Agreement.
SECTION 9.9 Reports, Notices and Demands.
Any report, notice, demand or other communication which by any provision of
this Agreement is required or permitted to be given or served to or upon any
Securityholder may be given or served in writing by deposit thereof, first-class
postage prepaid, in the United States mail, hand delivery or facsimile
transmission, in each case, addressed to such Capital Securityholder as such
Securityholder's name and address may appear on the Securities Register. Such
notice, demand or other communication to or upon a Securityholder shall be
deemed to
<PAGE> 42
38
have been sufficiently given or made, for all purposes, upon hand delivery,
mailing or transmission.
Any notice, demand or other communication which by any provision of this
Agreement is required or permitted to be given or served to or upon the Company
or the Managing Member shall be given in writing addressed (until another
address is published by the Company) as follows: (a) with respect to the
Company, to _________________________________________, (b) with respect Group,
to __________________________________________, and (c) with respect to Chestnut,
to _________________________________________. Such notice, demand or other
communication to or upon the Company or the Managing Member shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing by
the Company or the Managing Member.
SECTION 9.10 Acceptance of Terms of Agreement, Guarantee and Indenture.
THE RECEIPT AND ACCEPTANCE OF A LLC SECURITY OR ANY INTEREST THEREIN BY OR
ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH LLC
SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS AGREEMENT AND AGREEMENT TO THE
SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND
SHALL CONSTITUTE THE AGREEMENT OF THE COMPANY, SUCH SECURITYHOLDER AND SUCH
OTHERS THAT THE TERMS AND PROVISIONS OF THIS AGREEMENT SHALL BE BINDING,
OPERATIVE AND EFFECTIVE AS BETWEEN THE COMPANY AND SUCH SECURITYHOLDER AND SUCH
OTHERS.
SECTION 9.11 Counterparts.
This Agreement may contain more than one counterpart of the signature page
and this Agreement may be executed by the affixing of the signature of each of
Group and Chestnut on 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> 43
39
IN WITNESS WHEREOF, the undersigned have caused this Amended and Restated
Limited Liability Company Agreement to be executed as of the day and year first
above written.
DELPHI FINANCIAL GROUP, INC.,
as Managing Member
By: _______________________________
Name:
Title:
Attest:
______________________________
Name:
Title:
CHESTNUT INVESTORS III, INC.,
as Resigning Member
By: _______________________________
Name:
Title:
Attest:
______________________________
Name:
Title:
<PAGE> 44
STATE OF )
) : ss.:
COUNTY OF )
On the ___ day of _________, 199_, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he/she is ________________ of Delphi Financial Group, Inc., one of the
corporations described in and which executed the foregoing instrument, and that
he/she signed his/her name thereto pursuant to authority of the Board of
Directors of said corporation.
_______________________________
Notary Public
STATE OF NEW YORK )
) : ss.:
COUNTY OF NEW YORK )
On the ___ day of _________, 199_, before me personally came _____________,
to me known, who, being by me duly sworn, did depose and say that he/she is
________________ of Chestnut Investors III, Inc., one of the corporations
described in and which executed the foregoing instrument, and that he/she signed
his/her name thereto pursuant to the bylaws of said corporation.
<PAGE> 45
EXHIBIT A
CERTIFICATE OF FORMATION
OF
DELPHI FUNDING, L.L.C.
A-1
<PAGE> 46
EXHIBIT B
This Capital Security is a Global Certificate within the meaning of the
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository. This
Capital Security is exchangeable for Capital Securities registered in the name
of a person other than the Depository or its nominee only in the limited
circumstances described in the Agreement and no transfer of this Capital
Security (other than a transfer of this Capital Security as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except in
limited circumstances.
Unless this Capital Security is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York) to Delphi Funding,
L.L.C. or its agent for registration of transfer, exchange or payment, and any
Capital Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depositary 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 inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
CERTIFICATE NUMBER
NUMBER OF CAPITAL SECURITIES
P-
CUSIP NO.
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
DELPHI FUNDING, L.L.C.
___% CAPITAL SECURITIES,
SERIES A
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
Delphi Funding, L.L.C., a limited liability company formed under the laws
of the State of Delaware (the "Company"), hereby certifies that _______________
(the "Holder") is the
B-1
<PAGE> 47
registered owner of ___________ (__) capital securities of the Company
representing limited liability company interests in the Company and designated
the Delphi Funding, L.L.C. ___% Capital Securities, Series A (liquidation amount
$1,000 per Capital Security) (the "Capital Securities"). The Capital Securities
are transferable on the books and records of the Company, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in Section 5.4 of the Agreement (as defined
below). The designations, rights, privileges, restrictions, preferences and
other terms and provisions of the Capital Securities are set forth in, and this
certificate and the Capital Securities represented hereby are issued and shall
in all respects be subject to the terms and provisions of, the Amended and
Restated Limited Liability Company Agreement of the Company, dated as of March
1, 1997, as the same may be amended from time to time (the "Agreement"),
including the designation of the terms of Capital Securities as set forth
therein. The Holder is entitled to the benefits of the Guarantee Agreement
entered into by Delphi Financial Group, Inc., a Delaware corporation, and
Wilmington Trust Company, as guarantee trustee, dated as of March 1, 1997 (the
"Guarantee"), to the extent provided therein. The Company will furnish a copy of
the Agreement and the Guarantee to the Holder without charge upon written
request to the Company at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Agreement and
is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Managing Member of the Company has executed this
certificate this _____ day of March, 1997.
DELPHI FINANCIAL GROUP, INC.
By: _______________________________
Name:
Managing Member
B-2
<PAGE> 48
This certificate evidences the Capital Securities of the Company referred
to in the within-mentioned Agreement.
Dated:
_________________________________,
as Authentication Agent
By: _______________________________
Name:
Title:
B-3
<PAGE> 49
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Capital Security Certificate on the books of the
Company. The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Capital
Security Certificate)
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 signature guarantee medallion program), pursuant
to S.E.C. Rule 17Ad-15.
B-4
<PAGE> 50
EXHIBIT C
LETTER OF REPRESENTATIONS
C-1
<PAGE> 51
EXHIBIT D
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number: Number of Common Securities:
Certificate Evidencing Common Securities
of
DELPHI FUNDING, L.L.C.
___% Common Securities
(Liquidation Amount $1,000 per Common Security)
Delphi Funding, L.L.C., a limited liability company created under the laws
of the State of Delaware (the "Company"), hereby certifies that_________________
(the "Holder") is the registered owner of ______ common securities of the
Company representing limited liability company interests in the Company and
designated the ___% Common Securities (Liquidation Amount $1,000 per Common
Security) (the "Common Securities"). In accordance with Section 5.10 of the
Agreement (as defined below) the Common Securities are not transferable and any
attempted transfer hereof shall be void. The designations, rights, privileges,
restrictions, preferences, obligations and other terms and provisions of the
Common Securities are set forth in, and this certificate and the Common
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Limited Liability Company
Agreement of the Company dated as of March 1, 1997, as the same may be amended
from time to time (the "Agreement") including the designation of the terms of
the Common Securities as set forth therein. The Company will furnish a copy of
the Agreement to the Holder without charge upon written request to the Company
at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Agreement and
is entitled to the benefits thereunder and by acceptance hereof agrees to the
provisions of (i) the Guarantee Agreement entered into by Delphi Financial
Group, Inc., a Delaware corporation ("Group"), and Wilmington Trust Company, a
Delaware banking corporation ("Wilmington Trust Company"), as guarantee trustee,
dated as of March 1, 1997 and (ii) the Indenture entered into by Group and
Wilmington Trust Company, as trustee, dated as of March 1, 1997.
D-1
<PAGE> 52
IN WITNESS WHEREOF, the Managing Member of the Company has executed this
certificate.
DELPHI FINANCIAL GROUP, INC.
By: _______________________________
Name:
Managing Member
D-2
<PAGE> 1
Exhibit 4(b)
- --------------------------------------------------------------------------------
DELPHI FINANCIAL GROUP, INC.
to
WILMINGTON TRUST COMPANY
Trustee
--------------------------------------------
SUBORDINATED INDENTURE
Dated as of March 1, 1997
--------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
DELPHI FINANCIAL GROUP, INC.
Reconciliation and tie between the Trust Indenture Act of 1939 (including
cross-references to provisions of Sections 310 to and including 317 which,
pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended by the
Company Reform Act of 1990, are a part of and govern the Indenture whether or
not physically contained therein) and the Subordinated Indenture, dated as of
March __, 1997.
<TABLE>
<CAPTION>
Company Indenture Indenture
Act Section Section
- ----------- -------
<S> <C>
ss. 310 (a) (1), (2) and (5)...............................................6.8
(a) (3)............................................................Not Applicable
(a) (4)............................................................Not Applicable
(b)................................................................1.5, 1.6, 6.8,
6.9
(c)................................................................Not Applicable
ss.311 (a)................................................................6.13(a)
(b)................................................................6.13(b)
(b) (2)............................................................7.3(a) (2)
ss.312 (a)................................................................7.1
(b)................................................................7.2
(c)................................................................7.2
ss.313 (a)................................................................7.3
(b)................................................................7.3
(c)................................................................1.5, 1.6
(d)................................................................7.3
ss.314 (a) (1), (2), (3) and .............................................1.5, 1.6, 7.4
(b)................................................................Not Applicable
(c) (1)............................................................1.2
(c) (2)............................................................1.2
(c) (3)............................................................Not Applicable
(d)................................................................Not Applicable
(e)................................................................1.3
(f)................................................................Not Applicable
ss.315 (a)................................................................6.1(b)
(b)................................................................1.5, 1.6, 6.2
(c)................................................................6.1(a)
(d)................................................................6.1(c)
(d) (1)............................................................6.1(c)
(d) (2)............................................................6.1(c)
(d) (3)............................................................6.1(c)
</TABLE>
<PAGE> 3
Company Indenture Indenture
Act Section Section
- ----------- -------
(e).....................................................5.14
ss.316 (a).....................................................3.16
(a) (1) (A).............................................5.13
(a) (1) (B).............................................5.14
(a) (2).................................................Not Applicable
(b).....................................................5.8
(c).....................................................1.4(f)
ss.317 (a) (1).................................................5.3
(a) (2).................................................5.4
(b).....................................................10.3
ss.318 (a).....................................................1.7
- ----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Subordinated Indenture.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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ARTICLE I
<S> <C>
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION................ 1
SECTION 1.1. Definitions......................................................... 1
SECTION 1.2. Certificate and Opinion as to Conditions Precedent.................. 10
SECTION 1.3. Statements Required in Certificate or Opinion....................... 10
SECTION 1.4. Forms of Documents Delivered to Trustee............................. 10
SECTION 1.5. Acts of Holders..................................................... 11
SECTION 1.6. Notices............................................................. 13
SECTION 1.7. Conflict with Trust Indenture Act................................... 13
SECTION 1.8. Effect of Headings and Table of Contents............................ 13
SECTION 1.9. Successors and Assigns.............................................. 14
SECTION 1.10. Separability Clause................................................ 14
SECTION 1.11 Benefits of Indenture............................................... 14
SECTION 1.12. Governing Law...................................................... 14
SECTION 1.13. Non-Business Days.................................................. 14
ARTICLE II
SECURITY FORMS .................................... 15
SECTION 2.1. Forms Generally..................................................... 15
SECTION 2.2. Form of Face of Security............................................ 15
SECTION 2.3. Form of Reverse of Security......................................... 18
SECTION 2.4. Additional Provisions Required in Global Security................... 21
SECTION 2.5. Form of Trustee's Certificate of Authentication..................... 21
ARTICLE III
THE SECURITIES..................................... 23
SECTION 3.1. Title and Terms..................................................... 23
SECTION 3.2. Denominations....................................................... 25
SECTION 3.3. Execution, Authentication, Delivery and Dating...................... 25
SECTION 3.4. Temporary Securities................................................ 27
SECTION 3.5. Registration, Transfer and Exchange................................. 27
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.................... 29
SECTION 3.7. Payment of Interest; Interest Rights Preserved...................... 30
SECTION 3.8. Persons Deemed Owners............................................... 31
SECTION 3.9. Cancellation........................................................ 32
SECTION 3.10. Computation of Interest............................................ 32
SECTION 3.11. Deferrals of Interest Payment Dates................................ 32
</TABLE>
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<TABLE>
<CAPTION>
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<S> <C>
SECTION 3.12. Right of Set-Off................................................... 33
SECTION 3.13. Agreed Tax Treatment............................................... 33
SECTION 3.14. Shortening or Extension of Stated Maturity......................... 34
SECTION 3.15. CUSIP Numbers...................................................... 34
SECTION 3.16. When Treasury Securities Disregarded............................... 34
ARTICLE IV
SATISFACTION AND DISCHARGE .............................. 35
SECTION 4.1. Satisfaction and Discharge of Indenture............................. 35
SECTION 4.2. Application of Company Money........................................ 36
ARTICLE V
REMEDIES ....................................... 36
SECTION 5.1. Events of Default................................................... 36
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.................. 37
SECTION 5.3. Collection Suits by Trustee......................................... 38
SECTION 5.4. Trustee May File Proofs of Claim.................................... 39
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities......... 39
SECTION 5.6. Application of Money Collected...................................... 39
SECTION 5.7. Limitation on Suits................................................. 40
SECTION 5.8. Right of Holders to Receive Payments................................ 40
SECTION 5.9. Direct Action by Holders of Preferred Securities.................... 40
SECTION 5.10. Restoration of Rights and Remedies................................. 41
SECTION 5.11. Rights and Remedies Cumulative..................................... 41
SECTION 5.12. Delay or Omission Not Waiver....................................... 41
SECTION 5.13. Control by Majority................................................ 41
SECTION 5.14. Waiver of Existing Defaults........................................ 42
SECTION 5.15. Undertaking for Costs.............................................. 42
SECTION 5.16. Waiver of Usury, Stay or Extension Laws............................ 42
ARTICLE VI
THE TRUSTEE...................................... 43
SECTION 6.1. Duties of Trustee................................................... 43
SECTION 6.2. Notice of Defaults.................................................. 44
SECTION 6.3. Certain Rights of Trustee........................................... 44
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.............. 45
SECTION 6.5. May Hold Securities................................................. 45
SECTION 6.6. Money Held in Company............................................... 45
SECTION 6.7. Compensation and Reimbursement...................................... 45
SECTION 6.8. Eligibility; Disqualification....................................... 46
SECTION 6.9. Replacement of Trustee.............................................. 46
SECTION 6.10. Acceptance of Appointment by Successor............................. 47
</TABLE>
- ii -
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 6.11. Merger, Conversion, Consolidation or Succession to Business........ 48
SECTION 6.12. Preferential Collection of Claims Against Group.................... 48
SECTION 6.13. Appointment of Authenticating Agent................................ 48
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND GROUP.................... 50
SECTION 7.1. Securityholder Lists................................................ 50
SECTION 7.2. Communications by Holders with Other Holders........................ 50
SECTION 7.3. Reports by Trustee to Holders....................................... 50
SECTION 7.4. Reports by Group.................................................... 51
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE ................. 51
SECTION 8.1. Group May Consolidate, Etc., Only on Certain Terms.................. 51
SECTION 8.2. Successor Corporation Substituted................................... 52
ARTICLE IX
SUPPLEMENTAL INDENTURES................................ 52
SECTION 9.1. Supplemental Indentures without Consent of Holders.................. 52
SECTION 9.2. Supplemental Indentures with Consent of Holders..................... 53
SECTION 9.3. Execution of Supplemental Indentures................................ 55
SECTION 9.4. Effect of Supplemental Indentures................................... 55
SECTION 9.5. Conformity with Trust Indenture Act................................. 55
SECTION 9.6. Reference in Securities to Supplemental Indentures.................. 55
ARTICLE X
COVENANTS....................................... 56
SECTION 10.1. Payment of Principal, Premium and Interest......................... 56
SECTION 10.2. Maintenance of Office or Agency.................................... 56
SECTION 10.3. Paying Agent to Hold Money in Trust................................ 56
SECTION 10.4. Statement as to Compliance......................................... 56
SECTION 10.5. Waiver of Certain Covenants........................................ 57
SECTION 10.6. Additional Sums.................................................... 57
SECTION 10.7. Additional Covenants............................................... 58
SECTION 10.8. Calculation of Original Issue Discount............................. 59
ARTICLE XI
REDEMPTION OF SECURITIES................................ 59
SECTION 11.1. Applicability of This Article...................................... 59
</TABLE>
- iii -
<PAGE> 7
<TABLE>
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<S> <C>
SECTION 11.2. Election to Redeem; Notice to Trustee.............................. 59
SECTION 11.3. Selection of Securities to be Redeemed............................. 59
SECTION 11.4. Notice of Redemption............................................... 60
SECTION 11.5. Deposit of Redemption Price........................................ 61
SECTION 11.6. Payment of Securities Called for Redemption........................ 61
SECTION 11.7. Right of Redemption of Securities.................................. 61
ARTICLE XII
SINKING FUNDS..................................... 62
SECTION 12.1. Applicability of Article........................................... 62
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities.............. 62
SECTION 12.3. Redemption of Securities for Sinking Fund.......................... 62
ARTICLE XIII
SUBORDINATION OF SECURITIES.............................. 64
SECTION 13.1. Securities Subordinate to Senior Indebtedness...................... 64
SECTION 13.2. No Payment When Senior Indebtedness in Default; Payment
Over of Proceeds Upon Dissolution, Etc.......................................... 64
SECTION 13.3. Payment Permitted If No Default.................................... 66
SECTION 13.4. Subrogation to Rights of Holders of Senior Indebtedness............ 66
SECTION 13.5. Provisions Solely to Define Relative Rights........................ 67
SECTION 13.6. Trustee to Effectuate Subordination................................ 67
SECTION 13.7. No Waiver of Subordination Provisions.............................. 67
SECTION 13.8. Notice to Trustee.................................................. 68
SECTION 13.9. Reliance on Judicial Order or Certificate of Liquidating Agent..... 68
SECTION 13.10. Trustee Not Fiduciary for Holders of Senior Indebtedness.......... 69
SECTION 13.11. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights................................................ 69
SECTION 13.12. Article Applicable to Paying Agents............................... 69
</TABLE>
- iv -
<PAGE> 8
SUBORDINATED INDENTURE, dated as of March 1, 1997, between DELPHI FINANCIAL
GROUP, INC., a Delaware corporation (hereinafter called "Group") having its
principal office at 1105 North Market Street, Suite 1230, P.O. Box 8985,
Wilmington, Delaware 19899, and WILMINGTON TRUST COMPANY, a Delaware banking
corporation, as Trustee (hereinafter called the "Trustee").
RECITALS OF GROUP
Group has duly authorized the execution and delivery of this Indenture to
provide for the issuance from time to time of its unsecured junior subordinated
debt securities in one or more series (hereinafter called the "Securities") of
substantially the tenor hereinafter provided, including, without limitation,
Securities of an entire series issued to evidence loans made to Group of the
proceeds from the issuance from time to time by, with respect to an entire
series, a limited liability company or business trust (each a "Company," and,
collectively, the "Companies") of preferred interests in such Company (the
"Preferred Securities" of such Company) and common interests in such Company
(the "Common Securities" of such Company and, collectively with the Preferred
Securities, the "Company Securities" of such Company), and to provide the terms
and conditions upon which the Securities are to be authenticated, issued and
delivered.
All things necessary to make the Securities, when executed by Group and
authenticated and delivered hereunder and duly issued by Group, the valid
obligations of Group, and to make this Indenture a valid agreement of Group, in
accordance with their and its terms, have been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the
premises and the purchase of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities or of any series thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;
<PAGE> 9
2
(2) All other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(3) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and the term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles which are generally accepted at the date or time of such computation;
provided, that when two or more principles are so generally accepted, it shall
mean that set of principles consistent with those in use by Group; and
(4) The words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
"Act" when used with respect to any Holder has the meaning specified in
Section 1.5.
"Additional Interest" means the interest, if any, that shall accrue on any
interest on the Securities of any series the payment of which has not been made
on the applicable Interest Payment Date and which shall accrue at the rate per
annum specified or determined as specified in such Security from the applicable
Interest Payment Date.
"Additional Sums" has the meaning specified in Section 10.6.
"Additional Taxes" means the sum of any additional taxes, duties and other
governmental charges to which a Company has become subject from time to time as
a result of a Tax Event.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that no Company to which
Securities have been issued shall be deemed to be an Affiliate of Group. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.13 to act on behalf of the Trustee to authenticate Securities of
one or more series.
"Board of Directors" means either the board of directors of Group or any
committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of Group to have been duly adopted by the Board of
Directors, or such committee of the Board of Directors or officers of Group to
which authority to act on behalf of the Board of Directors has been delegated,
and to be in full force and effect on the date of such certification, and
delivered to the Trustee.
<PAGE> 10
3
"Bond Resolution", as used in Section 5.14, means a resolution adopted by
the Board of Directors or by an officer or committee of officers pursuant to
delegation by the Board of Directors authorizing a series of Securities.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or (iii) a day on which the
Corporate Trust Office of the Trustee, or, with respect to the Securities of a
series initially issued to a Company, the principal office of the Managing
Members (or, in the case of a Company that is a business trust, of the Property
Trustee) under the related Company Agreement, is closed for business.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it, then the body performing such duties at such time.
"Common Securities" has the meaning specified in the first recital of this
Indenture.
"Common Stock" means the common stock, par value $.01 per share, of Group.
"Company" has the meaning specified in the first recital of this Indenture.
"Company Agreement" means, (i) with respect to a Company that is a limited
liability company, a limited liability company agreement substantially in the
form attached hereto as Annex A, as amended by the form of Amended and Restated
Limited Liability Company Agreement substantially in the form attached hereto as
Annex B, or substantially in such form as may be specified as contemplated by
Section 3.1 with respect to the Securities of any series, in each case as
amended from time to time and (ii) with respect to a Company that is a statutory
business trust, a trust agreement substantially in such form as may be specified
as contemplated by Section 3.1 with respect to the Securities of any series, in
each case as amended from time to time.
"Company Securities" has the meaning specified in the first recital of this
Indenture.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered, which
at the date hereof is 1100 North Market Street, Wilmington, Delaware 19890.
"corporation" includes a corporation, association, company, joint-stock
company or business trust.
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or
<PAGE> 11
4
businesses; (iii) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person; (iv) every obligation of such Person issued or assumed
as the deferred purchase price of property or services (but excluding trade
accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) every
obligation of such Person for claims in respect of derivative products,
including interest rate, foreign exchange rate and commodity forward contracts,
options and swaps and similar arrangements; and (vii) every obligation of the
type referred to in clauses (i) through (vi) of another Person and all dividends
of another Person the payment of which, in either case, such Person has
guaranteed or is responsible or liable for, directly or indirectly, as obligor
or otherwise.
"Default", as used in Section 6.2, means any event which is, or after
notice or passage of time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depositary by Group pursuant to Section 3.1 with respect to
such series (or any successor thereto).
"Discount Security" means any security which provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.
"Distributions", with respect to the Company Securities issued by a
Company, means amounts payable in respect of such Company Securities as provided
in the related Company Agreement and referred to therein as "Distributions."
"Dollar" means the currency of the United States of America that, as at the
time of payment, is legal tender for the payment of public and private debts.
"Event of Default" unless otherwise specified in the supplemental indenture
creating a series of Securities has the meaning specified in Article V.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.4(h).
"Extension Period" has the meaning specified in Section 3.11.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System, as from time to time constituted, or if at any time after the execution
of this Indenture the Federal Reserve
<PAGE> 12
5
is not existing and performing the duties now assigned to it, then the body
performing such duties at such time.
"Global Security" means a Security in the form prescribed in Section 2.4
evidencing all or part of a series of Securities, issued to the Depositary or
its nominee for such series, and registered in the name of such Depositary or
its nominee.
"Group" means the Person named as "Group" in the first paragraph of this
Indenture until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Group" shall mean such
successor Person.
"Group Request" and "Group Order" mean, respectively, the written request
or order signed in the name of Group by the Chairman of the Board of Directors,
the Vice Chairman of the Board of Directors, its President or a Vice President,
and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary of Group, and delivered to the Trustee.
"Guarantee", with respect to the Company Securities issued by a Company,
means the guarantee by Group of Distributions on such Company Securities to the
extent provided in the Guarantee Agreement.
"Guarantee Agreement", with respect to the Company Securities issued by a
Company, means the Guarantee Agreement substantially in the form attached hereto
as Annex C, or substantially in such form as may be specified as contemplated by
Section 3.1 with respect to the Securities of any series, in each case as
amended from time to time.
"Holder" and "Securityholder" means a Person in whose name a Security is
registered in the Securities Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of each particular series of Securities established as
contemplated by Section 3.1.
"Interest Payment Date" means as to each series of Securities the Stated
Maturity of an installment of interest on such Securities.
"Junior Subordinated Debt" means any obligation of Group to its creditors,
whether now outstanding or subsequently incurred, where the instrument creating
or evidencing the obligation or pursuant to which the obligation is outstanding
provides that it is subordinated and junior in right of payment to Senior
Indebtedness pursuant to subordination provisions substantially similar to those
set forth in this Indenture. Junior Subordinated Debt includes the Securities.
"Managing Member" means, (i) in respect of any Company that is a limited
liability company, each person identified as a "Managing Member" in the related
Company Agreement, and
<PAGE> 13
6
(i) in respect of any Company that is a business trust, each Person identified
as an "Administrative Trustee" in the related Company Agreement, in each case
solely in such Person's capacity as Managing Member of such Company under such
Company Agreement and not in such Person's individual capacity, or any successor
administrative trustee appointed as therein provided.
"Maturity" when used with respect to any Security means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc.
"Notice of Default" means a written notice of the kind specified in Section
5.1(3).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board of Directors , a Vice Chairman of the Board of Directors, the President or
a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary of Group, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for, or an employee of, Group, and who shall be acceptable to the Trustee.
"Original Issue Date" means the date of issuance specified as such in each
Security.
"Outstanding" means, when used in reference to any Securities, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except (i) Securities theretofore canceled by the Trustee
or delivered to the Trustee for cancellation, (ii) Securities for whose payment
or redemption price money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent in trust for the Holders of such
Securities, and (iii) Securities in substitution for or in lieu of which other
Securities have been authenticated and delivered or which have been paid
pursuant to Section 3.6, unless proof satisfactory to the Trustee is presented
that any such Securities are held by Holders in whose hands such Securities are
valid, binding and legal obligations of Group; provided, however, that such
definition is subject to the provision of Section 3.16. Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Securities and that the pledgee is not Group or any
other obligor upon the Securities or any Affiliate of Group or such other
obligor. Upon the written request of the Trustee, Group shall furnish to the
Trustee promptly an Officers' Certificate listing and identifying all
Securities, if any, known by Group to be owned or held by or for the account of
Group or any other obligor on the Securities or any Affiliate of Group or such
obligor, and, subject to the provisions of Section 6.1, the Trustee shall be
entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not listed therein
are Outstanding for the purpose of any such determination.
<PAGE> 14
7
"Paying Agent" means the Trustee or any Person authorized by Group to pay
the principal of (or premium, if any) or interest on any Securities on behalf of
Group.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" means, with respect to the Securities of any series, the
place or places where the principal of (and premium, if any) and interest on the
Securities of such series are payable pursuant to Sections 3.1 and 3.11.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Preferred Securities" has the meaning specified in the first recital of
this Indenture.
"Proceeding" has the meaning specified in Section 13.2.
"Property Trustee" means, in respect of any Company that is a business
trust, the commercial bank or trust company identified as the "Property Trustee"
in the related Company Agreement, solely in its capacity as Property Trustee of
such Company under such Company Agreement and not in its individual capacity, or
its successor in interest in such capacity, or any successor property trustee
appointed as therein provided.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of a series, (i) in the case
of Securities of a series held by a Company or represented by one or more Global
Securities, the Business Day next preceding such Interest Payment Date and (ii)
in the case of Securities of a series not held by a Company or represented by
one or more Global Securities, the date which is fifteen days next preceding
such Interest Payment Date (whether or not a Business Day).
"Responsible Officer" when used with respect to the Trustee means any
officer of the Trustee assigned by the Trustee from time to time to administer
its corporate trust matters.
<PAGE> 15
8
"Rights Plan" means a plan of Group providing for the issuance by Group to
all holders of its Common Stock of rights entitling the holders thereof to
subscribe for or purchase shares of Common Stock or any class or series of
preferred stock of Group, which rights (i) are deemed to be transferred with
such shares of Common Stock, (ii) are not exercisable and (iii) are also issued
in respect of future issuances of Common Stock, in each case until the
occurrence of a specified event or events.
"S&P" means Standard & Poor's Ratings Services.
"SEC" means the Securities and Exchange Commission, as from time to time
constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it, then the body performing such duties at such time.
"Securities" or "Security" means any debt securities or debt security, as
the case may be, authenticated and delivered under this Indenture.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.5. "Registrar" shall mean the Securities
Registrar.
"Senior Indebtedness" means any obligation of Group to its creditors,
whether now outstanding or subsequently incurred, other than any obligation as
to which, in the instrument creating or evidencing the obligation or pursuant to
which the obligation is outstanding, it is provided that such obligation is not
Senior Indebtedness. Senior Indebtedness does not include Junior Subordinated
Debt, trade accounts payable or accrued liabilities arising in the ordinary
course of business.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity" when used with respect to any Security or any installment
of principal thereof means the date specified pursuant to the terms of such
Security as the date on which the principal of such Security is due and payable,
as such date may be shortened or extended as provided pursuant to the terms of
such Security and this Indenture. When used with respect to any installment of
interest on any Security, "Stated Maturity" means the date specified pursuant to
the terms of such Security as the date on which such installment of the interest
is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by Group or by one or more
other Subsidiaries, or by Group and one or more other Subsidiaries. For purposes
of this definition, "voting stock" means stock which ordinarily has voting power
for the election of directors, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.
<PAGE> 16
9
"Tax Event", with respect to Securities held by a Company, means the
receipt by such Company of an Opinion of Counsel (as defined in the relevant
Company Agreement) experienced in such matters to the effect that, as a result
of any amendment to, or change (including any 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 as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which proposed change, pronouncement or decision is announced on or after the
date of issuance of the Preferred Securities of such Company, there is more than
an insubstantial risk that (i) such Company is, or will be within 90 days of the
date of such Opinion of Counsel, subject to United States federal income tax
with respect to income received or accrued on the corresponding series of
Securities issued by Group to such Company, (ii) interest payable by Group on
such corresponding series of Securities is not, or within 90 days of the date of
such Opinion of Counsel, will not be, deductible by Group, in whole or in part,
for United States federal income tax purposes or (iii) such Company is, or will
be within 90 days of the date of such Opinion of Counsel, subject to more than a
de minimis amount of other taxes, duties or other governmental charges. With
respect to securities not held by a Company, "Tax Event" means the receipt by
Group of an opinion of counsel experienced in such matters to the effect that,
as a result of any amendment to, or change (including any announced proposed
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, or as a result of
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which proposed change, pronouncement or decision is announced on or after the
date of issuance of the applicable series of Securities under this Indenture,
there is more than an insubstantial risk that interest payable by Group on such
series of Securities is not, or within 90 days of the date of such opinion will
not be, deductible by Group, in whole or in part, for United States federal
income tax purposes.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder and, if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"Trust Indenture Act" and "TIA" mean the Trust Indenture Act of 1939 (15
U.S.C. ss. 77aaa-77bbb), as amended and as in effect on the date as of this
Indenture, except as provided in Section 9.5.
"Trust Officer", as used in Section 6.1, means the Chairman of the Board,
the President or any other officer or assistant officer of the Trustee assigned
by the Trustee to administer its corporate trust matters.
"Vice President", when used with respect to Group means any duly appointed
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president."
<PAGE> 17
10
SECTION 1.2. Certificate and Opinion as to Conditions Precedent.
Upon any application or request by Group to the Trustee to take any action
under this Indenture, Group shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(2) and an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 1.3. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion has read
such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such person, he has made such
examination or investigation as is necessary to enable him or her to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.4. Forms of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of Group may be based, insofar as
it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer or counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a
<PAGE> 18
11
certificate or opinion of, or representations by, an officer or officers of
Group stating that the information with respect to such factual matters is in
the possession of Group, unless such counsel rendering such Opinion of Counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions, or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.5. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given to or taken by Holders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by an agent or proxy duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments is or are
delivered to the Trustee, and, where it is hereby expressly required, to Group.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent or proxy shall be sufficient for any purpose
of this Indenture and (subject to Section 6.1) conclusive in favor of the
Trustee and Group, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
the certificate of any notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a Person acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The fact and date of the execution by any Person of any such instrument
or writing, or the authority of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient and in accordance
with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the Securities Register.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security issued upon the transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or Group in reliance thereon,
whether or not notation of such action is made upon such Security.
<PAGE> 19
12
(f) Group may fix a record date for determining which Holders may consent
to an amendment, supplement or waiver or other action. Only Holders of
Securities of any affected series on the record date may consent to such
amendment, supplement or waiver or other action.
(g) Notwithstanding Section 1.4(f), the Trustee (and only the Trustee) may
set any day as a record date for the purpose of determining the Holders of
Outstanding Securities entitled to join in the giving or making of (i) any
Notice of Default, (ii) any declaration of acceleration referred to in Section
5.2, (iii) any request to institute proceedings referred to in Section 5.7(2) or
(iv) any direction referred to in Section 5.13, in each case with respect to the
relevant Securities. If any record date is set pursuant to this paragraph, the
Holders of the relevant Outstanding Securities on such record date, and no other
Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date,
provided that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of the relevant Outstanding Securities on such record date. Nothing in
this paragraph shall be construed to prevent the Trustee from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of the relevant
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Trustee, at Group's expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to Group in writing and to each Holder of
the relevant Securities in the manner set forth in Section 1.6.
(h) With respect to any record date set pursuant to this Section, the party
hereto which sets such record date may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day, provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of the relevant Outstanding Securities in the manner set forth in
Section 1.6, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
(i) Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
<PAGE> 20
13
SECTION 1.6. Notices.
Any notice or communication shall be sufficiently given if in writing and
delivered in person or by facsimile transmission or mailed by first-class mail,
postage prepaid, addressed as follows:
If to Group:
Delphi Financial Group, Inc.
1105 North Market Street
Suite 1230
P.O. Box 8985
Wilmington, Delaware 19899
Attention: ____________________
If to the Trustee:
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Group or the Trustee by notice to the others may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed to
him or her at his or her address as it appears on the registration books of the
Registrar and shall be sufficiently given to him or her if so mailed within the
time prescribed.
Failure to mail a notice of communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to the other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 1.7. Conflict with Trust Indenture Act.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by any of Sections 310 to 317, inclusive, of the Trust Indenture
Act through operation of Section 318(c) thereof, such imposed duties shall
control.
SECTION 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
<PAGE> 21
14
SECTION 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by Group shall bind its
successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause.
In case any provision of this Indenture or in the Securities 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.
SECTION 1.11 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors and
assigns, the holders of Senior Indebtedness, the Holders of the Securities and,
to the extent expressly provided in Sections 5.2, 5.8, 5.9, 5.10, 5.12, 5.14,
9.1 and 9.2, the holders of Preferred Securities, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAW PRINCIPLES THEREOF.
SECTION 1.13. Non-Business Days.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or the Securities) payment of interest or
principal (and premium, if any) need not be made on such date, but may be made
on the next succeeding Business Day (and no interest shall accrue for the period
from and after such Interest Payment Date, Redemption Date or Stated Maturity,
as the case may be, until such next succeeding Business Day) 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 Interest Payment Date or Redemption Date or at the
Stated Maturity).
<PAGE> 22
15
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article, or
in such other form or forms as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with applicable tax laws or the rules of any
securities exchange or automated quotation system on which the Securities may be
listed or traded or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution of the Securities. If
the form of Securities of any series is established by action taken pursuant to
a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of Group and delivered to
the Trustee at or prior to the delivery of Group Order contemplated by Section
3.3 with respect to the authentication and delivery of such Securities.
The Trustee's certificates of authentication shall be substantially in the
form set forth in this Article.
The definitive Securities shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, if required by any
securities exchange or automated quotation system on which the Securities may be
listed or traded, on a steel engraved border or steel engraved borders or may be
produced in any other manner permitted by the rules of any securities exchange
or automated quotation system on which the Securities may be listed or traded,
all as determined by the officers executing such Securities, as evidenced by
their execution of such securities.
SECTION 2.2. Form of Face of Security.
DELPHI FINANCIAL GROUP, INC. CUSIP ____
__% Junior Subordinated Deferrable Interest Debentures
No. $
DELPHI FINANCIAL GROUP, INC., a corporation organized and existing under
the laws of the state of Delaware (hereinafter called "Group", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ____________________, or
registered assigns, the principal sum of ____________________ Dollars on
__________ __, ____ [; provided that Group may, subject to certain conditions
set forth in Section 3.14 of the Indenture, (i) shorten the Stated Maturity of
the principal of
<PAGE> 23
16
this Security to a date not earlier than __________ __, ____, and (ii) extend
the Stated Maturity of the principal of this Security at any time on one or more
occasions, but in no event to a date later than __________ __, ____]. Group
further promises to pay interest on said principal sum from __________ __, ____,
or from the most recent interest payment date (each such date, an "Interest
Payment Date") on which interest has been paid or duly provided for, [monthly]
[quarterly] [semi-annually] [if applicable, insert - (subject to deferral as set
forth herein)] in arrears on [insert applicable Interest Payment Dates] of each
year, commencing __________ __, ____, at the rate of ___% per annum, until the
principal hereof shall have become due and payable, [if applicable, insert -
plus Additional Interest, if any,] until the principal hereof is paid or duly
provided for or made available for payment [if applicable, insert - and on any
overdue principal and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the rate of ___% per annum, compounded [monthly] [quarterly]
[semi-annually]]. The amount of interest payable for any period shall be
computed on the basis of twelve 30-day months and a 360-day year. The amount of
interest payable for any partial period shall be computed on the basis of the
number of days elapsed in a 360-day year of twelve 30-day months. In the event
that any date on which interest is payable on this Security is not a Business
Day, then a payment of the interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day 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 date the payment was originally payable. A "Business Day" shall mean any
day other than (i) a Saturday or Sunday, (ii) a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office of the Trustee [if applicable, insert - or the principal office of the
[Managing Members] [Property Trustee] under the Company Agreement hereinafter
referred to for [insert name of Company],] is closed for business. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
installment, which shall be the [insert definition of Regular Record Dates]. Any
such interest installment not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the Securities of
this series may be listed or traded, and upon such notice as may be required by
such exchange or self-regulatory organization, all as more fully provided in
said Indenture.
[If applicable, insert - So long as no Event of Default has occurred and is
continuing, Group shall have the right at any time during the term of this
Security to defer payment of interest on this Security, at any time or from time
to time, for up to ____ consecutive [monthly] [quarterly] [semi-annual] interest
payment periods with respect to each deferral period (each an "Extension
Period"), during which Extension Periods Group shall have the right to make
partial payments of interest on any Interest Payment Date, and at the end of
which Group shall pay all interest then accrued and
<PAGE> 24
17
unpaid (together with Additional Interest thereon to the extent permitted by
applicable law); provided, however, that no Extension Period shall extend beyond
the Stated Maturity of the principal of this Security; provided, further, that
during any such Extension Period, Group shall not, and shall not permit any
Subsidiary of Group to, (i) declare or pay any dividends or distributions on or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
Group's capital stock or (ii) make any payment of principal of or interest or
premium, if any, on or repay, repurchase or redeem any debt security of Group
that ranks pari passu with or junior in interest to this Security or (iii) make
any guarantee payments with respect to any guarantee by Group of the debt
securities of any Subsidiary of Group if such guarantee ranks pari passu with or
junior in interest to this Security (other than (a) dividends or distributions
in Group's capital stock, (b) any declaration of a dividend in connection with
the implementation of a Rights Plan or the redemption or repurchase of any
rights distributed pursuant to a Rights Plan, (c) payments under the Guarantee
with respect to this Security, and (d) purchases of Common Stock related to the
issuance of Common Stock or rights or options under any of Group's benefit plans
for its directors, officers, employees or other persons within the definition of
"employee" for purposes of a registration of shares for an employee benefit plan
of Group, related to the issuance of Common Stock or rights under a dividend
reinvestment and stock purchase plan, or related to the issuance of Common Stock
(or securities convertible or exchangeable for Common Stock) as consideration in
an acquisition transaction that was entered into prior to the commencement of
such Extension Period). Prior to the termination of any such Extension Period,
Group may further defer the payment of interest, provided that no Extension
Period shall exceed ___ consecutive [months] [quarters] [semi-annual periods] or
extend beyond the Stated Maturity of the principal of this Security. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due, Group may elect to begin a
new Extension Period, subject to the above requirements. No interest shall be
due and payable during an Extension Period except at the end thereof. Group
shall give the Holder of this Security and the Trustee notice of its election to
begin any Extension Period at least one Business Day prior to the next
succeeding Interest Payment Date on which interest on this Security would be
payable but for such deferral [if applicable, insert - or, with respect to the
Securities issued to a Company, so long as such Securities are held by such
Company, prior to the earlier of (i) the next succeeding date on which
Distributions on the Preferred Securities would be payable but for such deferral
or (ii) the date the Managing Members are required to give notice to any
securities exchange or other applicable self-regulatory organization or to
holders of such Preferred Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business Day prior
to such record date]].
Payment of principal of (and premium, if any) and interest on this Security
will be made at the office or agency of Group maintained for that purpose in the
United States, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts [if
applicable, insert - ; provided, however, that at the option of Group payment of
interest may be made (i) by check mailed to the address of the Person entitled
thereto as such address shall appear in the Securities Register or (ii) by wire
transfer or direct deposit in immediately available funds at such place and to
such account as may be designated in writing by the relevant Regular Record Date
by the Person entitled thereto as specified in the Securities Register].
<PAGE> 25
18
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such actions as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes. Each
Holder hereof, by his acceptance hereof, waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Indebtedness, whether now outstanding or hereafter incurred,
and waives reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, Group has caused this instrument to be duly executed
under its corporate seal.
DELPHI FINANCIAL GROUP, INC.
By: ___________________________________
[President or Vice President]
Attest:
____________________________________________
[Secretary or Assistant Secretary]
SECTION 2.3. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of Group
(herein called the "Securities"), issued and to be issued in one or more series
under a Subordinated Indenture, dated as of __________ __, 1997 (herein called
the "Indenture"), between Group and Wilmington Trust Company, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Trustee, Group and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof [, limited in aggregate principal amount to $___________].
<PAGE> 26
19
All terms used in this Security that are defined in the Indenture [if
applicable, insert - or in the Amended and Restated [Limited Liability Company]
[Trust] Agreement, dated as of __________ __, ____, as amended (the "Company
Agreement"), for [insert name of Company] among Delphi Financial Group, Inc., as
[Managing Member] [Depositor], [if applicable, insert names of other Managing
Members] [if applicable, insert - the Trustees named therein], and the Holders
of Capital Securities described therein, [if applicable, insert - as Members]]
shall have the meanings assigned to them in the Indenture [if applicable, insert
- - or the Company Agreement, as the case may be].
[If applicable, insert - Group may at any time, at its option, on or after
__________ __, ____, and subject to the terms and conditions of Article XI of
the Indenture, redeem this Security in whole at any time or in part from time to
time, without premium or penalty, at a redemption price equal to 100% of the
principal amount thereof plus accrued and unpaid interest [if applicable, insert
- - including Additional Interest, if any] to the Redemption Date.]
Upon the occurrence and during the continuation of a Tax Event, Group may,
at its option, at any time within 90 days of the occurrence of such Tax Event,
redeem this Security, in whole but not in part, subject to the provisions of
Section 11.7 and the other provisions of Article XI of the Indenture, at a
redemption price equal to [100% of the principal amount thereof plus accrued and
unpaid interest, including Additional Interest, if any, to the Redemption Date].
In the event of redemption of this Security in part only, a new Security or
Securities of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for satisfaction and discharge of the
entire indebtedness of this Security upon compliance by Group with certain
conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided, Group
and the Trustee at any time to enter into a supplemental indenture or indentures
for the purpose of modifying in any manner the rights and obligations of Group
and of the Holders of the Securities, with the consent of the Holders of not
less than a majority in principal amount of the Outstanding Securities of all
series to be affected by such supplemental indenture. The Indenture also
contains provisions permitting Holders of specified percentages in principal
amount of the Securities of all series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by Group with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
[If the Security is not a Discount Security, - As provided in and subject
to the provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series may declare the
<PAGE> 27
20
principal amount of all the Securities of this series to be due and payable
immediately, by a notice in writing to Group (and to the Trustee if given by
Holders), provided that, in the case of the Securities of this series issued to
a Company, if upon an Event of Default, the Trustee or the Holders of not less
than 25% in principal amount of the Outstanding Securities of this series fails
to declare the principal of all the Securities of this series to be immediately
due and payable, the holders of at least 25% in aggregate Liquidation Amount of
the Preferred Securities then outstanding shall have such right by a notice in
writing to Group and the Trustee; and upon any such declaration the principal
amount of and the accrued interest (including any Additional Interest) on all
the Securities of this series shall become immediately due and payable, provided
that the payment of principal and interest (including any Additional Interest)
on such Securities shall remain subordinated to the extent provided in Article
XIII of the Indenture.]
[If the Security is a Discount Security, - As provided in and subject to
the provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than such portion
of the principal amount as may be specified in the terms of this series may
declare an amount of principal of the Securities of this series to be due and
payable immediately, by a notice in writing to Group (and to the Trustee if
given by Holders), provided that, in the case of the Securities of this series
issued to a Company, if upon an Event of Default, the Trustee or the Holders of
the requisite principal amount of the Outstanding Securities of this series
fails to declare the principal of all the Securities of this series to be
immediately due and payable, the holders of at least 25% in aggregate
Liquidation Amount of the Preferred Securities then outstanding shall have such
right by a notice in writing to Group and the Trustee. Such amount shall be
equal to - insert formula for determining the amount. Upon any such declaration,
such amount of the principal of and the accrued interest (including any
Additional Interest) on all the Securities of this series shall become
immediately due and payable, provided that the payment of principal and interest
(including any Additional Interest) on such Securities shall remain subordinated
to the extent provided in Article XIII of the Indenture. Upon payment (i) of the
amount of principal so declared due and payable and (ii) of interest on any
overdue principal and overdue interest (in each case to the extent that the
payment of such interest shall be legally enforceable), all of Group's
obligations in respect of the payment of the principal of and interest, if any,
on this Security shall terminate.]
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of Group, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Securities Register,
upon surrender of this Security for registration of transfer at the office or
agency of Group maintained under Section 10.2 of the Indenture duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to Group
and the Securities Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities of this
series, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated
<PAGE> 28
21
transferee or transferees. No service charge shall be made for any such
registration of transfer or exchange, but Group may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to due presentment of this Security for registration of transfer,
Group, the Trustee and any agent of Group or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither Group, the Trustee nor any
such agent shall be affected by notice to the contrary.
The Securities of this series are issuable only in registered form without
coupons in denominations of $_____ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
Group and, by its acceptance of this Security or a beneficial interest
therein, the Holder of, and any Person that acquires a beneficial interest in,
this Security agree that for United States federal, state and local tax purposes
it is intended that this Security constitute indebtedness.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
SECTION 2.4. Additional Provisions Required in Global Security.
Any Global Security issued hereunder shall, in addition to the provisions
contained in Sections 2.2 and 2.3, bear a legend in substantially the following
form:
"This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Security is exchangeable for Securities registered
in the name of a person other than the Depositary or its nominee only in the
limited circumstances described in the Indenture and may not otherwise be
transferred except 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."
SECTION 2.5. Form of Trustee's Certificate of Authentication.
Each Security issued hereunder shall be authenticated by the Authentication
Agent as follows:
<PAGE> 29
22
"This is one of the Securities referred to in the within mentioned
Indenture.
Dated:
WILMINGTON TRUST COMPANY
as Trustee
By: _______________________________
[Authorized Signatory]"
<PAGE> 30
23
ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued from time to time in one or more series. The
following matters shall be established in or pursuant to a Board Resolution, and
set forth in an Officers' Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of a series:
(a) the title of the Securities of such series, which shall distinguish the
Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.6 and except for any
Securities which, pursuant to the last paragraph of Section 3.3, are deemed
never to have been authenticated and delivered hereunder); provided, however,
that the authorized aggregate principal amount of such series may be increased
above such amount by a Board Resolution to such effect;
(c) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable or the method of determination thereof;
(d) the rate or rates, if any, at which the Securities of such series shall
bear interest, if any, the rate or rates and extent to which Additional
Interest, if any, shall be payable in respect of any Securities of such series,
the Interest Payment Dates on which such interest shall be payable, the right,
pursuant to Section 3.11 or as otherwise set forth therein, of Group to defer or
extend an Interest Payment Date, and the Regular Record Date for the interest
payable on any Interest Payment Date or the method by which any of the foregoing
shall be determined;
(e) the place or places where the principal of (and premium, if any) and
interest on the Securities of such series shall be payable, the place or places
where the Securities of such series may be presented for registration of
transfer or exchange, and the place or places where notices and demands to or
upon Group in respect of the Securities of such series may be made;
(f) the period or periods within which, or the date or dates on which, if
any, the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed, in whole or in part, at the option of
Group;
<PAGE> 31
24
(g) the obligation or the right, if any, of Group to redeem, repay or
purchase the Securities of such series pursuant to any sinking fund,
amortization or analogous provisions or upon the happening of a specified event,
or at the option of a Holder thereof, and the period or periods within which,
the price or prices at which, the currency or currencies (including currency
unit or units) in which and the other terms and conditions upon which Securities
of the series shall be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation;
(h) the denominations in which any Securities of such series shall be
issuable, if other than denominations of $25 and any integral multiple thereof;
(i) if other than Dollars, the currency or currencies (including currency
unit or units) in which the principal of (and premium, if any) and interest, if
any, on the Securities of the series shall be payable, or in which the
Securities of the series shall be denominated;
(j) the additions, modifications or deletions, if any, in the Events of
Default or covenants of Group set forth herein with respect to the Securities of
such series;
(k) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;
(l) the additions or changes, if any, to this Indenture with respect to the
Securities of such series as shall be necessary to permit or facilitate the
issuance of the Securities of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;
(m) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series or the manner
in which such amounts will be determined;
(n) whether the Securities of the series, or any portion thereof, shall
initially be issuable in the form of a temporary Global Security representing
all or such portion of the Securities of such series and provisions for the
exchange of such temporary Global Security for definitive Securities of such
series;
(o) if applicable, that any Securities of the series shall be issuable in
whole or in part in the form of one or more Global Securities and, in such case,
the respective Depositaries for such Global Securities, the form of any legend
or legends which shall be borne by any such Global Security in addition to or in
lieu of that set forth in Section 2.4 and any circumstances in addition to or in
lieu of those set forth in Section 3.5 in which any such Global Security may be
exchanged in whole or in part for Securities registered, and any transfer of
such Global Security in whole or in part may be registered, in the name or names
of Persons other than the Depositary for such Global Security or a nominee
thereof;
(p) the appointment of any Paying Agent or Agents for the Securities of
such series;
<PAGE> 32
25
(q) the terms of any right to convert or exchange Securities of such series
into any other securities or property of Group, and the additions or changes, if
any, to this Indenture with respect to the Securities of such series to permit
or facilitate such conversion or exchange;
(r) the form or forms of the Company Agreement, Amended and Restated
Company Agreement and Guarantee Agreement, if different from the forms attached
hereto as Annexes A, B and C, respectively;
(s) the relative degree, if any, to which the Securities of the series
shall be senior to or be subordinated to other series of Securities in right of
payment, whether such other series of Securities are Outstanding or not; and
(t) any other terms of the Securities of such series (which terms shall not
be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided herein or in or pursuant
to such Board Resolution and set forth in such Officers' Certificate or in any
such indenture supplemental hereto.
If any of the terms of the Securities of any series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of
Group and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article XIII.
SECTION 3.2. Denominations.
The Securities of each series shall be in registered form without coupons
and shall be issuable in denominations of $25 and any integral multiple thereof,
unless otherwise specified as contemplated by Section 3.1.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of Group by its President or one
of its Vice Presidents under its corporate seal reproduced or impressed thereon
and attested by its Secretary or one of its Assistant Secretaries. The signature
of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of Group shall bind Group, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to
the authentication and delivery of such Securities or did not hold such offices
at the date of such Securities. At any time and from time to time after the
execution and
<PAGE> 33
26
delivery of this Indenture, Group may deliver Securities of any series executed
by Group to the Trustee for authentication, together with a Group Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with Group Order shall authenticate and make such Securities available for
delivery. If the form or terms of the Securities of the series have been
established by or pursuant to one or more Board Resolutions as permitted by
Sections 2.1 and 3.1, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or pursuant
to Board Resolution as permitted by Section 2.1, that such form has been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 3.1, that such terms
have been established in conformity with the provisions of this Indenture;
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by Group in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally
binding obligations of Group enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and
(4) that all requirements of New York and Federal law and the Delaware
Corporation Law in respect of the execution and delivery by Group of such
Securities, and all covenants and conditions set forth in this Indenture
which are conditions precedent hereto, have been complied with.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or Group Order and Opinion of Counsel otherwise
required pursuant to such preceding paragraph at or prior to the authentication
of each Security of such series if such documents are delivered at or prior to
the authentication upon original issuance of the first Security of such series
to be issued.
Each Security shall be dated the date of its authentication.
<PAGE> 34
27
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by
Group, and Group shall deliver such Security to the Trustee for cancellation as
provided in Section 3.9, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall not
be entitled to the benefits of this Indenture.
SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities of any series, Group may
execute, and upon Group Order the Trustee shall authenticate and make available
for delivery, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities of such series in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, Group will cause
definitive Securities of such series to be prepared without unreasonable delay.
After the preparation of definitive Securities, the temporary Securities shall
be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of Group designated for that purpose without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, Group shall execute and the Trustee shall authenticate and
make available for delivery in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations, of like
aggregate principal amount, having the same Original Issue Date and Stated
Maturity and having the same terms as such temporary Securities. Until so
exchanged, the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
SECTION 3.5. Registration, Transfer and Exchange.
Group shall cause to be kept at the Corporate Trust Office of the Trustee a
register in which, subject to such reasonable regulations as it may prescribe,
Group shall provide for the registration of Securities and of transfers of
Securities. Such register is herein sometimes referred to as the "Securities
Register." The Trustee is hereby appointed "Securities Registrar" for the
purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at the office
or agency of Group designated for that purpose Group shall execute, and the
Trustee shall authenticate and make available for delivery, in the name of the
designated transferee or transferees, one or more new Securities of the same
series of any authorized denominations, of a like aggregate principal amount, of
the same Original Issue Date and Stated Maturity and having the same terms.
<PAGE> 35
28
At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of a like
aggregate principal amount, of the same Original Issue Date and Stated Maturity
and having the same terms, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange,
Group shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any transfer or exchange of Securities shall be
the valid obligations of Group, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall (if
so required by Group or the Securities Registrar) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to Group
and the Securities Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or exchange of
Securities, but Group may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any transfer
or exchange of Securities.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or a nominee
thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered,
in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (A) such Depositary (i) has notified
Group that it is unwilling or unable to continue as Depositary for such
Global Security or (ii) has ceased to be a clearing agency registered under
the Exchange Act at a time when the Depositary is required to be so
registered to act as depositary, in either case unless Group has approved a
successor Depositary within 90 days, (B) there shall have occurred and be
continuing an Event of Default with respect to such Global Security, (C)
Group in its sole discretion determines that such Global Security will be
so exchangeable or transferable or (D) there shall exist such
circumstances, if any, in addition to or in lieu of the foregoing as have
been specified for this purpose as contemplated by Section 3.1.
(3) Subject to Clause (2) above, any exchange of a Global Security for
other Securities may be made in whole or in part, and all Securities issued
in exchange for a Global
<PAGE> 36
29
Security or any portion thereof shall be registered in such names as the
Depositary for such Global Security shall direct.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 3.4, 3.6, 9.6 or
11.6 or otherwise, shall be authenticated and delivered in the form of, and
shall be, a Global Security, unless such Security is registered in the name
of a Person other than the Depositary for such Global Security or a nominee
thereof.
Neither Group nor the Trustee shall be required, pursuant to the provisions
of this Section, (a) to issue, transfer or exchange any Security of any series
during a period beginning at the opening of business 15 days before the mailing
of notice of redemption of Securities pursuant to Article XI and ending at the
close of business on the day of such mailing of notice of redemption or (b) to
transfer or exchange any Security selected for redemption in whole or in part,
except, in the case of any Security to be redeemed in part, any portion thereof
not to be redeemed.
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee together with such
security or indemnity as may be required by Group or the Trustee to hold each of
them harmless, Group shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a new Security of the same issue and
series of like tenor and principal amount, having the same Original Issue Date
and Stated Maturity and bearing the same interest rate as such mutilated
Security, and bearing a number not contemporaneously outstanding.
If there shall be delivered to Group and to the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security, and (ii)
such security or indemnity as may be required by them to hold each of them
harmless, then, in the absence of notice to Group or the Trustee that such
Security has been acquired by a bona fide purchaser, Group shall execute and
upon its request the Trustee shall authenticate and make available for delivery,
in lieu of any such destroyed, lost or stolen Security, a new Security of the
same issue and series of like tenor and principal amount, having the same
Original Issue Date and Stated Maturity and bearing the same interest rate as
such destroyed, lost or stolen Security, and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, Group in its discretion may, instead of
issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, Group may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of Group, whether or not the
<PAGE> 37
30
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7. Payment of Interest; Interest Rights Preserved.
Interest on any Security of any series which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date, shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
in respect of Securities of such series, except that, unless otherwise provided
in the Securities of such series, interest payable on the Stated Maturity of the
principal of a Security shall be paid to the Person to whom principal is paid.
The initial payment of interest on any Security of any series which is issued
between a Regular Record Date and the related Interest Payment Date shall be
payable as provided in such Security or in the Board Resolution pursuant to
Section 3.1 with respect to the related series of Securities. At the option of
Group, interest on any series of Securities may be paid (i) by check mailed to
the address of the Person entitled thereto as it shall appear on the Securities
Register of such series or (ii) by wire transfer or direct deposit in
immediately available funds at such place and to such account as designated by
the Person entitled thereto as specified in the Securities Register of such
series, provided that proper transfer instructions have been received prior to
the relevant Regular Record Date.
Any interest on any Security which is payable, but is not timely paid or
duly provided for, on any Interest Payment Date for Securities of such series
(herein called "Defaulted Interest"), shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by Group, at its election
in each case, as provided in Clause (1) or (2) below:
(1) Group may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series in respect of which
interest is in default (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. Group
shall notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Security and the date of the proposed payment, and at the
same time Group shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify
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Group of such Special Record Date and, in the name and at the expense of Group,
shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first class, postage prepaid, to each
Holder of a Security of such series at the address of such Holder as it appears
in the Securities Register not less than 10 days prior to such Special Record
Date. The Trustee may, in its discretion, in the name and at the expense of
Group, cause a similar notice to be published at least once in a newspaper,
customarily published in the English language on each Business Day and of
general circulation in the Borough of Manhattan, The City of New York, but such
publication shall not be a condition precedent to the establishment of such
Special Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are registered on such
Special Record Date and shall no longer be payable pursuant to the following
Clause (2).
(2) Group may make payment of any Defaulted Interest in any other lawful
manner not inconsistent with the requirements of any securities exchange or
automated quotation system on which the Securities of the series in respect of
which interest is in default may be listed or traded and, upon such notice as
may be required by such exchange (or by the Trustee if the Securities are not
listed), if, after notice given by Group to the Trustee of the proposed payment
pursuant to this Clause, such payment shall be deemed practicable by the
Trustee.
Any interest on any Security which is deferred or extended pursuant to
Section 3.11 shall not be Defaulted Interest for the purposes of this Section
3.7.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
SECTION 3.8. Persons Deemed Owners.
Group, the Trustee and any agent of Group or the Trustee may treat the
Person in whose name any Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and (subject to Section
3.7) any interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither Group, the Trustee nor any
affected by notice to the contrary.
SECTION 3.9. Cancellation.
All Securities surrendered for payment, redemption, transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee, and any such Securities and Securities surrendered directly to the
Trustee for any such purpose shall be promptly canceled by it. Group may at any
time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which Group may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be
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authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
Securities shall be returned by the Trustee to Group and destroyed by Group.
SECTION 3.10. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for Securities
of any series, interest on the Securities of each series for any period shall be
computed on the basis of a 360- day year of twelve 30-day months and interest on
the Securities of each series for any partial period shall be computed on the
basis of the number of days elapsed in a 360-day year of twelve 30-day months.
SECTION 3.11. Deferrals of Interest Payment Dates.
If specified as contemplated by Section 2.1 or Section 3.1 with respect to
the Securities of a particular series, so long as no Event of Default has
occurred and is continuing, Group shall have the right, at any time during the
term of such series, from time to time to defer the payment of interest on such
Securities for such period or periods as may be specified as contemplated by
Section 3.1 (each, an "Extension Period") during which Extension Periods Group
shall have the right to make partial payments of interest on any Interest
Payment Date. No Extension Period shall end on a date other than an Interest
Payment Date. At the end of any such Extension Period Group shall pay all
interest then accrued and unpaid on the Securities (together with Additional
Interest thereon, if any, at the rate specified for the Securities of such
series to the extent permitted by applicable law) to the Persons in whose names
that Securities are registered at the close of business on the Regular Record
Date with respect to the Interest Payment Date at the end of such Extension
Period; provided, however, that no Extension Period shall extend beyond the
Stated Maturity of the principal of the Securities of such series; provided,
further, that during any such Extension Period, Group shall not, and shall not
permit any Subsidiary to, (i) declare or pay any dividends or distributions on,
or redeem, purchase, acquire or make a liquidation payment with respect to, any
of Group's capital stock, (ii) make any payment of principal of or interest or
premium, if any, on or repay, repurchase or redeem any debt security of Group
that ranks pari passu with or junior in interest to the Securities of such
series or (iii) make any guarantee payments with respect to any guarantee by
Group of the debt securities of any Subsidiary of Group that by their terms rank
pari passu with or junior in interest to the securities of such series (other
than (a) dividends or distributions in Group's capital stock, (b) any
declaration of a dividend in connection with the implementation of a Rights
Plan, or the redemption or repurchase of any rights distributed pursuant to a
the Guarantee with respect to such Security, and (d) purchases of Common Stock
related to the issuance of Common Stock or rights or options under any of
Group's benefit plans for its directors, officers, employees or other persons
within the definition of "employee" for purposes of a registration of shares for
an employee benefit plan of Group, related to the issuance of Common Stock or
rights under a dividend reinvestment and stock purchase plan, or related to the
issuance of Common Stock (or securities convertible or exchangeable for Common
Stock) as consideration in an acquisition transaction that was entered into
prior to the commencement of such Extension Period). Prior to the termination of
any such Extension Period, Group may further defer the payment of interest,
provided that no Extension Period shall exceed the period or periods specified
in such
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Securities or extend beyond the Stated Maturity of the principal of such
Securities. Upon termination of any Extension Period and upon the payment of all
accrued and unpaid interest and any Additional Interest then due on any Interest
Payment Date, Group may elect to begin a new Extension Period, subject to the
above requirements. No interest shall be due and payable during an Extension
Period, except at the end thereof. Group shall give the Holders of the
Securities of such series and the Trustee written notice of its election to
begin any such Extension Period at least one Business Day prior to the next
succeeding Interest Payment Date on which interest on Securities of such series
would be payable but for such deferral or, with respect to the Securities of a
series issued to a Company, so long as such Securities are held by such Company,
prior to the earlier of (i) the next succeeding date on which Distributions on
the Preferred Securities of such Company would be payable but for such deferral
or (ii) the date such Company is required to give notice to any securities
exchange or other applicable self-regulatory organization or to holders of such
Preferred Securities of the record date or the date such Distributions are
payable, but in any event not less than one Business Day prior to such record
date.
The Trustee shall promptly give notice, in the name and at the expense of
Group, of Group's election to begin any such Extension Period to the Holders of
the Outstanding Securities of such series.
SECTION 3.12. Right of Set-Off.
With respect to the Securities of a series issued to a Company,
notwithstanding anything to the contrary in the Indenture, Group shall have the
right to set-off any payment it is otherwise required to make thereunder in
respect of any such Security to the extent Group has theretofore made, or is
concurrently on the date of such payment making, a payment under the Guarantee
relating to such Security or under Section 5.8 or 5.9 of the Indenture.
SECTION 3.13. Agreed Tax Treatment.
Each Security issued hereunder shall provide that Group and, by its
acceptance of a Security or a beneficial interest therein, the Holder of, and
any Person that acquires a beneficial interest in, such Security intend that
such Security constitutes indebtedness and agree to treat such Security as
indebtedness for United States federal, local and state tax purposes.
SECTION 3.14. Shortening or Extension of Stated Maturity.
If specified as contemplated by Section 2.1 or Section 3.1 with respect to
the Securities of a particular series, Group shall have the right to (i) shorten
the Stated Maturity of the principal of the Securities of such series at any
time to any date not earlier than the first date on which Group has the right to
redeem the Securities of such series, and (ii) extend the Stated Maturity of the
principal of the Securities of such series at any time at its election for one
or more periods, but in no event to a date later than the 49th anniversary of
the Original Issue Date of the Securities of such series; provided that, if
Group elects to exercise its right to extend the Stated Maturity of the
principal of the Securities of such series pursuant to clause (ii), above, at
the time such election is made and at
<PAGE> 41
34
the time of extension (A) Group is not in bankruptcy, otherwise insolvent or in
liquidation, (B) Group is not in default in the payment of any interest or
principal on such Securities, (C) in the case of any series of Securities held
by a Company, such Company is not in arrears on payments of Distributions on the
Preferred Securities issued by such Company and no deferred Distributions are
accumulated, (D) such Securities are rated not less than BBB-by S&P or Baa3 by
Moody's or the equivalent by any other nationally recognized statistical rating
organization and (E) the Securities will not have a remaining period to maturity
of more than 30 years after such extension. In the event Group elects to shorten
or extend the Stated Maturity of any Securities, it shall give written notice to
the Trustee, and the Trustee shall give notice of such shortening or extension
to the Holders, no less than 30 and no more than 60 days prior to the
effectiveness thereof.
SECTION 3.15. CUSIP Numbers.
Group in issuing the Securities may use "CUSIP" numbers (if then generally
in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of
redemption as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. Group will promptly notify the Trustee of any change
in the CUSIP numbers.
SECTION 3.16. When Treasury Securities Disregarded.
In determining whether the Holders of the required principal amount of
Securities outstanding have concurred in any direction, waiver or consent,
Securities owned by Group or any person directly or indirectly controlling or
controlled by or under direct or indirect common control with Group shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be disregarded.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall, upon Group Request, cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for and as otherwise provided in this
Section 4.1) and the Trustee, on demand of and at the expense of Group, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when
(1) either
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(A) all Securities theretofore authenticated and delivered (other than (i)
Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.6 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by Group and thereafter repaid to Group or discharged from such trust, as
provided in Section 10.3) have been delivered to the Trustee for cancellation;
or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year of the date of deposit, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of Group,
and Group, in the case of Clause (B) (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for such purpose
an amount in the currency or currencies in which the Securities of such series
are payable sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, including
principal (and premium, if any) and interest (including any Additional Interest)
to the date of such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be;
(2) Group has paid or caused to be paid all other sums payable hereunder by
Group; and
(3) Group has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of Group to the Trustee under Section 6.7, the obligations of Group
to any Authenticating Agent under Section 6.13 and, if money shall have been
deposited with the Trustee pursuant to subclause (B) of clause (1) of this
Section, the obligations of the Trustee under Section 4.2 and 10.3 shall
survive.
SECTION 4.2. Application of Company Money.
All money deposited with the Trustee pursuant to Section 4.1 shall be held
in trust and applied by the Trustee, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including Group acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for the payment of which such money or obligations have been
deposited with or received by the Trustee.
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ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default", wherever used herein with respect to the Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series, including any Additional Interest in respect thereof, when it becomes
due and payable, and continuance of such default for a period of 30 days
(subject to the deferral of any interest payment date in the case of an
Extension Period); or
(2) default in the payment of the principal of (or premium, if any, on) any
Security of that series at its Maturity; or
(3) default in the performance, or breach, in any material respect, of any
covenant or warranty of Group in this Indenture with respect to that series
(other than a covenant or warranty a default in the performance of which or the
breach of which is elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 90 days after there has
been given, by registered or certified mail, to Group by the Trustee or to Group
and the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying such default
or breach and requiring it to be remedied; or
(4) the entry of a decree or order by a court having jurisdiction in the
premises adjudging Group bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of or in
respect of Group under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or appointing a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of Group or of any
substantial part of its property or ordering the winding up or liquidation of
its affairs, and the continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days; or
(5) the institution by Group of proceedings to be adjudicated bankrupt or
insolvent, or the consent by it to the institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law, or the consent by
it to the filing of any such petition or to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of Group
or of any substantial part of its property, or the making by it of an assignment
for the benefit for creditors, or the admission by it in writing of its
inability to pay its
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debts generally as they become due and its willingness to be adjudicated a
bankrupt, or the taking of corporate action by Group in furtherance of any such
action; or
(6) any other Event of Default provided with respect to Securities of that
series.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in Section
5.1(4) or 5.1(5)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Securities of
that series to be due and payable immediately, by a notice in writing to Group
(and to the Trustee if given by Holders), provided that, in the case of the
Securities of a series issued to a Company, if, upon an Event of Default, the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series fail to declare the principal amount (or,
if the Securities of that series are Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Securities of that series to be immediately due and payable, the holders of at
least 25% in aggregate liquidation amount of the corresponding series of
Preferred Securities then outstanding shall have such right by a notice in
writing to Group and the Trustee; and upon any such declaration such principal
amount (or specified portion thereof) of and the accrued interest (including any
Additional Interest) on all the Securities of such series shall become
immediately due and payable. Payment of principal and interest (including any
Additional Interest) on such Securities shall remain subordinated to the extent
provided in Article XIII notwithstanding that such amount shall become
immediately due and payable as herein provided. If an Event of Default specified
in Section 5.1(4) or 5.1(5) with respect to Securities of any series at the time
Outstanding occurs, the principal amount of all the Securities of that series
(or, if the Securities of that series are Discount Securities, such portion of
the principal amount of such Securities as may be specified by the terms of that
series) shall automatically, and without any declaration or other action on the
part of the Trustee or any Holder, become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to Group and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) Group has paid or deposited with the Trustee a sum sufficient to pay:
(A) all overdue installments of interest (including any Additional
Interest) on all Securities of that series,
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(B) the principal of (and premium, if any, on) any Securities of that
series which have become due otherwise than by such declaration of acceleration
and interest thereon at the rate borne by the Securities, and
(C) all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel; and
(2) all Events of Default with respect to Securities of that series, other
than the non-payment of the principal of Securities of that series which has
become due solely by such acceleration, have been cured or waived as provided in
Section 5.14;
provided that, in the case of Securities of a series held by a Company, if the
Holders of at least a majority in principal amount of the Outstanding Securities
of that series fails to rescind and annul such declaration and its consequences,
the holders of a majority in aggregate Liquidation Amount (as defined in the
Company Agreement under which such Company is formed) of the related series of
Preferred Securities then outstanding shall have such right by written notice to
Group and the Trustee, subject to the satisfaction of the conditions set forth
in Clauses (1) and (2) above of this Section 5.2.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.3. Collection Suits by Trustee.
If an Event of Default in payment of interest or principal specified in
Section 5.1(1) or (2) occurs and is continuing on a series, the Trustee, subject
to Section 8.2, may recover judgment in its own name and as trustee of an
express trust against Group for the whole amount of principal and interest
remaining unpaid on the series.
SECTION 5.4. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and the
Securityholders allowed in any judicial proceedings relative to Group and its
creditors or property. Nothing herein shall be deemed to authorize the Trustee
to authorize or consent to or accept on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities,
or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding.
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
recovery of judgment shall, after provision for the payment of all the amounts
owing the Trustee and any predecessor Trustee under Section 6.7, its agents and
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counsel, be for the ratable benefit of the Holders of the Securities in respect
of which such judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money or property on account of principal (or premium,
if any) or interest (including any Additional Interest), upon presentation of
the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any predecessor
Trustee under Section 6.7;
SECOND: Subject to Article XIII, to the payment of the amounts then due and
unpaid upon such series of Securities for principal (and premium, if any),
interest (including any Additional Interest) and Additional Taxes, in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such series of Securities for principal (and premium, if any) and
interest (including any Additional Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 5.7. Limitation on Suits.
No Holder of any Securities of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture or for the
appointment of a receiver, assignee, trustee, liquidator, sequestrator (or other
similar official) or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of security or indemnity has failed to institute any such proceeding; and
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(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 5.8. Right of Holders to Receive Payments.
Notwithstanding any other provision in this Indenture, the right of any
Holder of a Security to receive payment of principal of and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of the Holders.
SECTION 5.9. Direct Action by Holders of Preferred Securities.
In the case of Securities of a series held by a Company, any holder of the
corresponding series of Preferred Securities held by such Company shall have the
right, upon the occurrence of an Event of Default described in Section 5.1(1) or
5.1(2), to institute a suit directly against Group for enforcement of payment to
such holder of principal of (premium, if any) and (subject to Section 3.7)
interest (including any Additional Interest) on the Securities having a
principal amount equal to the aggregate Liquidation Amount (as defined in the
Company Agreement under which such Company is formed) of such Preferred
Securities of the corresponding series held by such holder.
SECTION 5.10. Restoration of Rights and Remedies.
If the Trustee, any Holder or any holder of Preferred Securities has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee, such Holder or such holder of
Preferred Securities, then and in every such case Group, the Trustee, the
Holders and such holder of Preferred Securities shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee, the Holders and the holders of Preferred Securities shall continue as
though no such proceeding had been instituted.
SECTION 5.11. Rights and Remedies Cumulative.
Except as otherwise provided in the last paragraph of Section 3.6, no right
or remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or
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in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.12. Delay or Omission Not Waiver.
No delay or omission of the Trustee, any Holder of any Security or any
holder of any Preferred Security to exercise any right or remedy accruing upon
any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to
the Holders and the right and remedy given to the holders of Preferred
Securities by Section 5.8 and 5.9 may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee, the Holders or the holders of
Preferred Securities, as the case may be.
SECTION 5.13. Control by Majority.
The Holders of a majority in principal amount of a series may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on it under this
Indenture with respect to the series. The Trustee, however, subject to Sections
6.1 and 6.3, may refuse to follow any direction that conflicts with law or this
Indenture. The Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 5.14. Waiver of Existing Defaults.
Subject to Section 9.2, and unless a Bond Resolution or Supplemental
Indenture otherwise provides, the Holders of a majority in principal amount of a
series by notice to the Trustee may consent to the waiver of a past or existing
Default or Event of Default on the series and its consequences. When a Default
or Event of Default is waived, it is cured. No such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right or
consequence thereon.
SECTION 5.15. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of
<PAGE> 49
42
the Outstanding Securities of any series, or to any suit instituted by any
Holder for the enforcement of the payment of the principal of (or premium, if
any) or interest (including any Additional Interest) on any Security on or after
the respective Stated Maturities expressed in such Security.
SECTION 5.16. Waiver of Usury, Stay or Extension Laws.
Group covenants (to the extent that it may lawfully do so) that it will not
at any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and Group (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing on a series, the
Trustee shall exercise its rights and powers vested in it by this Indenture 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) Except during the continuance of an Event of Default on a series:
(1) The Trustee shall not be liable except for the performance of such
duties as are specifically set out in this Indenture.
(2) In the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. The Trustee, however, shall
examine the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section.
(2) The Trustee shall not be liable for any error of judgment made in good
faith by a Trust Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.
<PAGE> 50
43
(3) The Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 5.14.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section.
(f) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(g) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree with Group.
SECTION 6.2. Notice of Defaults.
If a Default occurs and is continuing on a series and if it is known to the
Trustee, the Trustee shall mail to each Securityholder of the series notice of
the Default within 90 days after it occurs. Except in the case of a Default in
payment of principal of or interest on any Security of a series, the Trustee may
withhold the notice if and so long as the board of directors of the Trustee, the
executive or any trust committee of such board and/or responsible officers of
the Trustee in good faith determine(s) that withholding the notice is in the
interest of the Securityholders of the series.
SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, Security or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of Group mentioned herein shall be
sufficiently evidenced by a Group Request or Group Order and any resolution of
the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
<PAGE> 51
44
(d) the Trustee may consult with counsel of its selection and the advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, indenture,
Security or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of Group, personally or
by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the 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; and
(h) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of Group, and
neither the Trustee nor any Authenticating Agent assumes any responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by Group of
the Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Securities
Registrar or any other agent of Group, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to Sections 6.8 and
6.12, may otherwise deal with Group with the same rights it would have if it
were not Trustee, Authenticating Agent, Paying Agent, Securities Registrar or
such other agent.
SECTION 6.6. Money Held in Company.
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45
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with Group.
SECTION 6.7. Compensation and Reimbursement.
Group, as borrower, agrees
(1) to pay to the Trustee from time to time such compensation as shall be
agreed in writing between Group and the Trustee for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) to reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
and
(3) to indemnify each of the Trustee and any predecessor Trustee for, and
to hold it harmless against, any and all loss, liability, damage, claim or
expense (including the reasonable compensation and the expenses and
disbursements of its agents and counsel) incurred without negligence or bad
faith, arising out of or in connection with the acceptance or administration of
this trust or the performance of its duties hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. This
indemnification shall survive the termination of this Agreement.
To secure Group's payment obligations in this Section, Group and the
Holders agree that the Trustee shall have a lien prior to the Securities on all
money or property held or collected by the Trustee. Such lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Reform Act of 1978 or any successor statute.
SECTION 6.8. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss. 310(a)(1). The Trustee shall have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA ss. 310(b).
SECTION 6.9. Replacement of Trustee.
<PAGE> 53
46
The Trustee may resign by so notifying Group. The Holders of a majority in
principal amount of the outstanding Securities may remove the Trustee by so
notifying the removed Trustee and may appoint a successor Trustee with Group's
consent. Group may remove the Trustee if:
(1) the Trustee fails to comply with Section 6.8;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of the Trustee for any reason, Group shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to Group. Immediately thereafter, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee, the resignation or removal of the retiring Trustee shall become
effective and the successor Trustee shall have all the rights, powers and duties
of the Trustee under this Indenture. A successor Trustee shall mail notice of
its succession to each Securityholder.
SECTION 6.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to Group and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of Group or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, Group, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any
<PAGE> 54
47
of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee,
it being understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts, and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
Group or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, Group shall execute any and
all instruments for more fully and certainly vesting in and confirming to such
successor Trustee all rights, powers and trusts referred to in paragraph (a) or
(b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
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. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated, and in case any
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or in
the name of such successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall have.
SECTION 6.12. Preferential Collection of Claims Against Group.
If and when the Trustee shall be or become a creditor of Group (or any
other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
Group (or any such other obligor).
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SECTION 6.13. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to Group and
shall at all times be a corporation organized and doing business under the laws
of the United States of America, or of any state or territory or the District of
Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by federal or state authority. If such Authenticating
Agent publishes reports of condition at least annually, pursuant to law or to
the requirements of said supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such Authenticating
Agent shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section, such Authenticating Agent shall resign immediately in the manner and
with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to Group. The Trustee may at any time terminate the
agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to Group. Upon receiving such a notice of resignation
or upon such a termination, or in case at any time such Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
the Trustee may appoint a successor Authenticating Agent which shall be
acceptable to Group and shall give notice of such appointment in the manner
provided in Section 1.6 to all Holders of Securities of the series with respect
to which such Authenticating Agent will serve. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provision of this Section.
Group agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
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If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
"This is one of the Securities referred to in the within mentioned
Indenture.
Dated:
/s/ WILMINGTON TRUST COMPANY
----------------------------
As Trustee
By:
-------------------------
As Authenticating Agent
By:
-------------------------
Authorized Officer"
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND GROUP
SECTION 7.1. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, Group, based on all
information in its possession or control, shall furnish to the Trustee on or
before each semiannual interest payment date and at such other times as the
Trustee may request in writing a list of the names and addresses of the
Securityholders in such form and as of such date as the Trustee may reasonably
require.
SECTION 7.2. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture of the
Securities. Group, the Trustee, the Registrar and anyone else shall have the
protection of TIA ss. 312(c).
SECTION 7.3. Reports by Trustee to Holders.
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50
Within 60 days after each May 15 beginning with May 15, 1997, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Securityholders shall
be filed with the SEC and each stock exchange, if any, on which the Securities
are listed.
SECTION 7.4. Reports by Group.
Group shall file with the Trustee, within 15 days after Group files them
with the SEC, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC may
by rules and regulations prescribe) which Group is required to file with the SEC
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. If Group
is not required to file information, documents or reports pursuant to either of
such sections, then Group shall file with the Trustee and the SEC, in accordance
with rules and regulations prescribed by the SEC, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Securities Exchange Act of 1934, in respect of a security
listed and registered on a national securities exchange as may be prescribed in
such rules and regulations. Group also shall comply with the other provisions of
TIA ss. 314(a).
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Group May Consolidate, Etc., Only on Certain Terms.
Group shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, and no Person shall consolidate with or merge into Group or convey,
transfer or lease its properties and assets substantially as an entirety to
Group, unless:
(1) in case Group shall consolidate with or merge into another Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, the Person formed by such consolidation or into which Group is
merged or the Person which acquires by conveyance or transfer, or which leases,
the properties and assets of Group substantially as an entirety shall be a
corporation, partnership or trust organized and existing under the laws of the
United States of America or any State or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee, the due and punctual payment
of the principal of (and premium, if any) and interest (including any Additional
Interest) on all the Securities and the performance of every covenant of this
Indenture on the part of Group to be performed or observed;
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51
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;
(3) in the case of the Securities of a series held by a Company, such
consolidation, merger, conveyance, transfer or lease is permitted under the
related Company Agreement and Guarantee and does not give rise to any breach or
violation of the related Company Agreement or Guarantee; and
(4) Group has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and any such supplemental indenture complies with this Article
and that all conditions precedent herein provided for relating to such
transaction have been complied with; and the Trustee, subject to Section 6.1,
may rely upon such Officers' Certificate and Opinion of Counsel as conclusive
evidence that such transaction complies with this Section 8.1.
SECTION 8.2. Successor Corporation Substituted.
Upon any consolidation or merger by Group with or into any other Person, or
any conveyance, transfer or lease by Group of its properties and assets
substantially as an entirety to any Person in accordance with Section 8.1, the
successor Person formed by such consolidation or into which Group is merged or
to which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, Group under this
Indenture with the same effect as if such successor Person had been named as
Group herein; and in the event of any such conveyance, transfer or lease Group
shall be discharged from all obligations and covenants under the Indenture and
the Securities and may be dissolved and liquidated.
Such successor Person may cause to be signed, and may issue either in its
own name or in the name of Group, any or all of the Securities issuable
hereunder which theretofore shall not have been signed by Group and delivered to
the Trustee; and, upon the written order of such successor Person instead of
Group and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall make available for delivery
any Securities which previously shall have been signed and delivered by the
officers of Group to the Trustee for authentication pursuant to such provisions
and any Securities which such successor Person thereafter shall cause to be
signed and delivered to the Trustee on its behalf for the purpose pursuant to
such provisions. All the Securities so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Securities theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form may be made in the Securities thereafter to be
issued as may be appropriate.
<PAGE> 59
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, Group, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form reasonably satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to Group, and the
assumption by any such successor of the covenants of Group herein and in the
Securities contained; or
(2) to convey, transfer, assign, mortgage or pledge any property to or with
the Trustee or to surrender any right or power herein conferred upon Group; or
(3) to establish the form or terms of Securities of any series as permitted
by Sections 2.1 or 3.1; or
(4) to add to the covenants of Group for the benefit of the Holders of all
or any series of Securities (and if such covenants are to be for the benefit of
less than all series of Securities, stating that such covenants are expressly
being included solely for the benefit of such series) or to surrender any right
or power herein conferred upon Group; or
(5) to add any additional Events of Default for the benefit of the Holders
of all or any series of Securities (and if such additional Events of Default are
to be for the benefit of less than all series of Securities, stating that such
additional Events of Default are expressly being included solely for the benefit
of such series); or
(6) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
or
(7) to cure any ambiguity, to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising under
this Indenture, provided that such action pursuant to this clause (7) shall not
adversely affect the interest of the Holders of Securities of any series in any
material respect or, in the case of the Securities of a series issued to a
Company and for so long as any of the corresponding series of Preferred
Securities issued by such Company shall remain outstanding, the holders of such
Preferred Securities; or
(8) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Securities of one or more series and to
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, pursuant to the requirements of Section 6.10(b); or
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(9) to comply with the requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act.
SECTION 9.2. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to Group and the
Trustee, Group, when authorized by a Board Resolution, and the Trustee may enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) except to the extent permitted by Section 3.11 or as otherwise
specified as contemplated by Section 2.1 or Section 3.1 with respect to the
deferral of the payment of interest on the Securities of any series, change the
Stated Maturity of the principal of, or any installment of interest (including
any Additional Interest) on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or reduce any premium payable upon the
redemption thereof, or reduce the amount of principal of a Discount Security
that would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.2, or change the place of payment where, or the
coin or currency in which, any Security or interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding Securities
of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 5.14 or Section
10.5, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Security affected thereby; or
(4) modify the provisions in Article XIII of this Indenture with respect to
the subordination of Outstanding Securities of any series in a manner adverse to
the Holders thereof;
provided, further, that, in the case of the Securities of a series issued to a
Company, so long as any of the corresponding series of Preferred Securities
issued by such Company remains outstanding, (i) no such amendment shall be made
that adversely affects the holders of such Preferred Securities in any material
respect, and no termination of this Indenture shall occur, and no waiver of any
Event of Default or compliance with any covenant under this Indenture shall be
effective, without the prior consent of the holders of at least a majority of
the aggregate Liquidation Amount (as defined in the Company Agreement under
which such Company is organized) of such Preferred Securities then
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outstanding unless and until the principal (and premium, if any) of the
Securities of such series and all accrued and, subject to Section 3.7, unpaid
interest (including any Additional Interest) thereon have been paid in full and
(ii) no amendment shall be made to Sections 5.8 or 5.9 of this Indenture that
would impair the rights of the holders of Preferred Securities provided therein
without the prior consent of the holders of each Preferred Security then
outstanding unless and until the principal (and premium, if any) of the
Securities of such series and all accrued and (subject to Section 3.7) unpaid
interest (including any Additional Interest) thereon have been paid in full.
A supplemental indenture that changes or eliminates any covenant or other
provision of this Indenture that has expressly been included solely for the
benefit of one or more particular series of Securities or Preferred Securities,
or which modifies the rights of the Holders of Securities or holders of
Preferred Securities of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under this Indenture of the
Holders of Securities or holders of Preferred Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture, and that
all conditions precedent have been complied with. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6. Reference in Securities to Supplemental Indentures.
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Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by Group, bear a
notation in form approved by Group as to any matter provided for in such
supplemental indenture. If Group shall so determine, new Securities of any
series so modified as to conform, in the opinion of Group, to any such
supplemental indenture may be prepared and executed by Group and authenticated
and delivered by the Trustee in exchange for Outstanding Securities of such
series.
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
Group covenants and agrees for the benefit of each series of Securities
that it will duly and punctually pay the principal of (and premium, if any) and
interest (including Additional Interest) on the Securities of that series in
accordance with the terms of such Securities and this Indenture.
SECTION 10.2. Maintenance of Office or Agency.
Group will maintain in each Place of Payment for any series of Securities,
an office or agency where Securities of that series may be presented or
surrendered for payment and an office or agency where Securities of that series
may be surrendered for transfer or exchange and where notices and demands to or
upon Group in respect of the Securities of that series and this Indenture may be
served. Group initially appoints the Trustee, acting through its Corporate Trust
Office, as its agent for said purposes. Group will give prompt written notice to
the Trustee of any change in the location of any such office or agency. If at
any time Group shall fail to maintain such office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and Group hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
Group may also from time to time designate one or more other offices or
agencies where the Securities may be presented or surrendered for any or all of
such purposes, and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve
Group of its obligation to maintain an office or agency in each Place of Payment
for Securities of any series for such purposes. Group will give prompt written
notice to the Trustee of any such designation and any change in the location of
any such office or agency.
SECTION 10.3. Paying Agent to Hold Money in Trust.
Each Paying Agent for a series shall hold in trust for the benefit of
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of, premium, if any, or interest on the Securities of the
series, and shall notify the Trustee of any default by the Company in making any
such payment. If Group or one of its Subsidiaries acts as Paying Agent, it shall
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segregate the money and hold it as a separate trust fund. Group or the Trustee
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon doing so the Paying Agent shall have no further liability for the
money.
SECTION 10.4. Statement as to Compliance.
Group shall deliver to the Trustee, within 120 days after the end of each
calendar year of Group ending after the date hereof, an Officers' Certificate,
one of the signatories of which shall be the principal executive, principal
financial or principal accounting officer of Group, covering the preceding
calendar year, stating whether or not to the best knowledge of the signers
thereof Group is in default in the performance, observance or fulfillment of or
compliance with any of the terms, provisions, covenants and conditions of this
Indenture, and if Group shall be in default, specifying all such defaults and
the nature and status thereof of which they may have knowledge. For the purpose
of this Section, compliance shall be determined without regard to any grace
period or requirement of notice provided pursuant to the terms of this
Indenture.
SECTION 10.5. Waiver of Certain Covenants.
Group may omit in any particular instance to comply with any covenant or
condition provided pursuant to Section 3.1, 9.1(3) or 9.1(4) with respect to the
Securities of any series, if before or after the time for such compliance the
Holders of at least a majority in principal amount of the Outstanding Securities
of such series shall, by Act of such Holders, either waive such compliance in
such instance or generally waive compliance with such covenant or condition, but
no such waiver shall extend to or affect such covenant or condition except to
the extent so expressly waived, and, until such waiver shall become effective,
the obligations of Group in respect of any such covenant or condition shall
remain in full force and effect.
SECTION 10.6. Additional Sums.
In the case of the Securities of a series initially issued to a Company, so
long as no Event of Default has occurred and is continuing and except as
otherwise specified as contemplated by Section 2.1 or Section 3.1, if (i) a
Company is the Holder of all of the Outstanding Securities of such series, and
(ii) a Tax Event has occurred and is continuing in respect of such Securities,
Group shall pay to such Company (or its permitted successor under the related
Company Agreement) for so long as such Company (or its permitted successor) is
the registered holder of the Outstanding Securities of such series, together
with any payment of principal of (or premium, if any) or interest (including any
Additional Interest) on such Securities, such additional sums as may be
necessary in order that the amount of Distributions (including any Additional
Amounts (as defined in such Company Agreement)) then payable by such Company in
respect of the related Preferred Securities and Common Securities in accordance
with the terms thereof shall not be reduced as a result of any Additional Taxes
arising from such Tax Event (the "Additional Sums"). Whenever in this Indenture
or the Securities there is a reference in any context to the payment of
principal of (or premium, if any) or interest (including Additional Interest) on
the Securities, such mention shall be deemed to include mention of the payments
of the Additional Sums provided for in this paragraph to the extent
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that, in such context, Additional Sums are, were or would be payable in respect
thereof pursuant to the provisions of this paragraph, and any express mention of
the payment of Additional Sums (if applicable) in any provision hereof shall not
be construed as excluding Additional Sums in those provisions hereof where such
express mention is not made; provided, however, that the deferral of the payment
of interest pursuant to Section 3.11 or the terms of the Securities shall not
defer the payment of any Additional Sums that may be due and payable.
SECTION 10.7. Additional Covenants.
Group covenants and agrees with each Holder of Securities of each series
that it shall not, and it shall not permit any Subsidiary of Group to, (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any shares of Group's capital
stock, or (ii) make any payment of principal of or interest or premium, if any,
on or repay, repurchase or redeem any debt securities of Group that rank pari
passu with or junior in interest to the Securities of such series or (iii) make
any guarantee payments with respect to any guarantee by Group of debt securities
of any subsidiary of Group if such guarantee ranks pari passu with or junior in
interest to the Securities (other than (a) dividends or distributions in Group's
capital stock, (b) any declaration of a dividend in connection with the
implementation of a Rights Plan or the redemption or repurchase of any rights
distributed pursuant to a Rights Plan, (c) payments under the Guarantee with
respect to the Preferred Securities relating to Securities of such Series, and
(d) purchases of Common Stock related to the issuance of Common Stock or rights
or options under any of Group's benefit plans for its directors, officers,
employees or other persons within the definition of "employee" for purposes of a
registration of shares for an employee benefit plan of Group, related to the
issuance of Common Stock or rights under a dividend reinvestment and stock
purchase plan, or related to the issuance of Common Stock (or securities
convertible or exchangeable for Common Stock) as consideration in an acquisition
transaction that was entered into prior to the commencement of such Extension
Period) if at such time (x) there shall have occurred any event of which Group
has actual knowledge that (A) with the giving of notice or the lapse of time or
both, would constitute an Event of Default with respect to the Securities of
such series and (B) in respect of which Group shall not have taken reasonable
steps to cure, (y) if the Securities of such series are held by a Company, Group
shall be in default with respect to its payment of any obligations under the
Guarantee relating to the Preferred Securities issued by such Company or (z)
Group shall have given notice of its election to begin an Extension Period with
respect to the Securities of such series as provided herein and shall not have
rescinded such notice, or such Extension Period, or any extension thereof, shall
be continuing.
Group also covenants with each Holder of Securities of a series issued to a
Company (i) to maintain directly or indirectly 100% ownership of the Common
Securities of such Company; provided, however, that any permitted successor of
Group hereunder may succeed to Group's ownership of such Common Securities, (ii)
not to voluntarily terminate, wind-up or liquidate such Company, except (a) in
connection with a distribution of the Securities of such series to the holders
of the Company Securities of such Company in liquidation of such Company or (b)
in connection with certain mergers, consolidations or amalgamations permitted by
the related Company Agreement and (iii) to use its reasonable efforts,
consistent with the terms and provisions of such Company
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Agreement, to cause such Company to remain not taxable as a corporation for
United States federal income tax purposes.
SECTION 10.8. Calculation of Original Issue Discount.
Group shall file with the Trustee promptly at the end of each calendar year
a written notice specifying the amount of original issue discount (including
daily rates and accrual periods) accrued on Outstanding Securities as of the end
of such year, if any.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of This Article.
Redemption of Securities of any series (whether by operation of a sinking
fund or otherwise) as permitted or required by any form of Security issued
pursuant to this Indenture shall be made in accordance with such form of
Security and this Article; provided, however, that if any provision of any such
form of Security shall conflict with any provision of this Article, the
provision of such form of Security shall govern. Except as otherwise set forth
in the form of Security for such series, each Security of such series shall be
subject to partial redemption only in the amount of $25 or, in the case of the
Securities of a series issued to a Company, $25, or integral multiples thereof.
SECTION 11.2. Election to Redeem; Notice to Trustee.
The election of Group to redeem any Securities shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of
Group of the Securities, Group shall, not less than 45 nor more than 60 days
prior to the Redemption Date (unless a shorter notice shall be satisfactory to
the Trustee), notify the Trustee of such date and of the principal amount of
Securities of that series to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities, Group shall furnish the Trustee with
an Officers' Certificate and an Opinion of Counsel evidencing compliance with
such restriction.
SECTION 11.3. Selection of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed (unless
all the Securities of a specified tenor are to be redeemed or unless such
redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities of such series not previously
called for redemption, by lot or such other method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of a
portion of the principal amount of any Security of such series, provided that
the unredeemed portion of the principal amount of any Security shall be
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in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify Group in writing of the Securities
selected for partial redemption and the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed. If Group
shall so direct, Securities registered in the name of Group, any Affiliate or
any Subsidiary thereof shall not be included in the Securities selected for
redemption.
SECTION 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not later than the thirtieth day, and not earlier than the sixtieth day,
prior to the Redemption Date, to each Holder of Securities to be redeemed, at
the address of such Holder as it appears in the Securities Register.
With respect to Securities of each series to be redeemed, each notice of
redemption shall identify the Securities to be redeemed (including CUSIP number,
if a CUSIP number has been assigned to such Securities of such Series) and shall
state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities of such particular series and
having the same terms are to be redeemed, the identification (and, in the case
of partial redemption, the respective principal amounts) of the particular
Securities to be redeemed;
(d) that on the Redemption Date, the Redemption Price will become due and
payable upon each such Security or portion thereof, and that interest thereon,
if any, shall cease to accrue on and after said date;
(e) the place or places where such Securities are to be surrendered for
payment of the Redemption Price; and
(f) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of Group
shall be given by Group or, at Group's request, by the Trustee in the name and
at the expense of Group and shall not
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be irrevocable. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail or any
defect in the notice to the Holder of any Security designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security.
SECTION 11.5. Deposit of Redemption Price.
Prior to 10:00 a.m. New York City time on the Redemption Date specified in
the notice of redemption given as provided in Section 11.4, Group will deposit
with the Trustee or with one or more Paying Agents (or if Group is acting as its
own Paying Agent, Group will segregate and hold in trust as provided in Section
10.3) an amount of money sufficient to pay the Redemption Price of, and any
accrued interest (including Additional Interest) on, all the Securities which
are to be redeemed on that date.
SECTION 11.6. Payment of Securities Called for Redemption.
If any notice of redemption has been given as provided in Section 11.4, the
Securities or portion of Securities with respect to which such notice has been
given shall become due and payable on the date and at the place or places stated
in such notice at the applicable Redemption Price. On presentation and surrender
of such Securities at a Place of Payment in said notice specified, the said
securities or the specified portions thereof shall be paid and redeemed by Group
at the applicable Redemption Price, together with accrued interest (including
any Additional Interest) to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 3.1, installments of interest
whose Stated Maturity is on or prior to the Redemption Date will be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 3.7.
Upon presentation of any Security redeemed in part only, Group shall
execute and the Trustee shall authenticate and make available for delivery to
the Holder thereof, at the expense of Group, a new Security or Securities of the
same series, of authorized denominations, in aggregate principal amount equal to
the unredeemed portion of the Security so presented and having the same Original
Issue Date, Stated Maturity and terms. If a Global Security is so surrendered,
such new Security will also be a new Global Security.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal of and premium, if any, on such Security
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
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SECTION 11.7. Right of Redemption of Securities.
Except as otherwise established pursuant to Section 3.1 for the Securities
of a series, Group, at its option, may redeem (A) the Securities of any series,
in whole (but not in part), upon the occurrence and during the continuation of a
Tax Event, at any time within 90 days of the occurrence of such Tax Event, or
(B) the Securities of a series initially issued to a Company, on or after the
date five years after the Original Issue Date of such Securities, in whole at
any time or in part from time to time, in each case at a Redemption Price equal
to 100% of the principal amount thereof.
ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series except as otherwise specified as
contemplated by Section 3.1 for such Securities.
The minimum amount of any sinking fund payment provided for by the terms of
any Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any sinking fund payment in excess of such minimum amount which is
permitted to be made by the terms of such Securities of any series is herein
referred to as an "optional sinking fund payment". If provided for by the terms
of any Securities of any series, the cash amount of any sinking fund payment may
be subject to reduction as provided in Section 12.2. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of such Securities.
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities.
In lieu of making all or any part of a mandatory sinking fund payment with
respect to any Securities of a series in cash, Group may at its option, at any
time no more than 16 months and no less than 30 days prior to the date on which
such sinking fund payment is due, deliver to the Trustee Securities of such
series (together with the unmatured coupons, if any, appertaining thereto)
theretofore purchased or otherwise acquired by Group, except Securities of such
series that have been redeemed through the application of mandatory or optional
sinking fund payments pursuant to the terms of the Securities of such series,
accompanied by a Group Order instructing the Trustee to credit such obligations
and stating that the Securities of such series were originally issued by Group
by way of bona fide sale or other negotiation for value; provided that the
Securities to be so credited have not been previously so credited. The
Securities to be so credited shall be received and credited for such purpose by
the Trustee at the redemption price for such Securities, as specified in the
Securities so to be redeemed, for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
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SECTION 12.3. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, Group will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash in the currency in which the
Securities of such series are payable (except as provided pursuant to Section
3.1) and the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities pursuant to Section 12.2 and will also deliver to the
Trustee any Securities to be so delivered. Such Officers' Certificate shall be
irrevocable and upon its delivery Group shall be obligated to make the cash
payment or payments therein referred to, if any, on or before the succeeding
sinking fund payment date. In the case of the failure of Group to deliver such
Officers' Certificate (or, as required by this Indenture, the Securities and
coupons, if any, specified in such Officers' Certificate), the sinking fund
payment due on the succeeding sinking fund payment date for such series shall be
paid entirely in cash and shall be sufficient to redeem the principal amount of
the Securities of such series subject to a mandatory sinking fund payment
without the right to deliver or credit securities as provided in Section 12.2
and without the right to make the optional sinking fund payment with respect to
such series at such time.
Any sinking fund payment or payments (mandatory or optional) made in cash
plus any unused balance of any preceding sinking fund payments made with respect
to the Securities of any particular series shall be applied by the Trustee (or
by Group if Group is acting as its own Paying Agent) on the sinking fund payment
date on which such payment is made (or, if such payment is made before a sinking
fund payment date, on the sinking fund payment date immediately following the
date of such payment) to the redemption of Securities of such series at the
Redemption Price specified in such Securities with respect to the sinking fund.
Any sinking fund moneys not so applied or allocated by the Trustee (or, if Group
is acting as its own Paying Agent, segregated and held in trust by Group as
provided in Section 10.3) for such series and together with such payment (or
such amount so segregated) shall be applied in accordance with the provisions of
this Section 12.3. Any and all sinking fund moneys with respect to the
Securities of any particular series held by the Trustee (or if Group is acting
as its own Paying Agent, segregated and held in trust as provided in Section
10.3) on the last sinking fund payment date with respect to Securities of such
series and not held for the payment or redemption of particular Securities of
such series shall be applied by the Trustee (or by Group if Group is acting as
its own Paying Agent), together with other moneys, if necessary, to be deposited
(or segregated) sufficient for the purpose, to the payment of the principal of
the Securities of such series at Maturity. The Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 11.3 and cause notice of the redemption thereof to be given
in the name of and at the expense of Group in the manner provided in Section
11.4. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Section 11.6. On or
before each sinking fund payment date, Group shall pay to the Trustee (or, if
Group is acting as its own Paying Agent, Group shall segregate and hold in trust
as provided in Section 10.3) in cash a sum in the currency in which Securities
of such series are payable (except as provided pursuant to Section 3.1) equal to
the principal and any interest accrued to the Redemption Date for Securities or
portions thereof to be redeemed on such sinking fund payment date pursuant to
this Section 12.3.
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Neither the Trustee nor Group shall redeem any Securities of a series with
sinking fund moneys or mail any notice of redemption of Securities of such
series by operation of the sinking fund for such series during the continuance
of a default in payment of interest, if any, on any Securities of such series or
of any Event of Default (other than an Event of Default occurring as a
consequence of this paragraph) with respect to the Securities of such series,
except that if the notice of redemption shall have been provided in accordance
with the provisions hereof, the Trustee (or Group, if Group is then acting as
its own Paying Agent) shall redeem such Securities if cash sufficient for that
purpose shall be deposited with the Trustee (or segregated by Group) in
accordance with the terms of this Article XII. Except as aforesaid, any moneys
in the sinking fund for such series at the time when any such default or Event
of Default shall occur and any moneys thereafter paid into such sinking fund
shall, during the continuance of such default or Event of Default, be held as
security for the payment of the Securities and coupons, if any, of such series;
provided, however, that in case such default or Event of Default shall have been
cured or waived herein, such moneys shall thereafter be applied on the next
sinking fund payment date for the Securities of such series on which such moneys
may be applied pursuant to the provisions of this Section 12.3.
ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. Securities Subordinate to Senior Indebtedness.
Group covenants and agrees, and each Holder of a Security, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the payment of the principal
of (and premium, if any) and interest (including any Additional Interest) on
each and all of the Securities are hereby expressly made subordinate and subject
in right of payment to the prior payment in full of all Senior Indebtedness.
SECTION 13.2. No Payment When Senior Indebtedness in Default; Payment Over
of Proceeds Upon Dissolution, Etc.
In the event that Group shall default in the payment of any principal of
(or premium, if any) or interest on any Senior Indebtedness when the same
becomes due and payable, whether at maturity or at a date fixed for prepayment
or by declaration of acceleration or otherwise, then, upon written notice of
such default to Group by the holders of Senior Indebtedness or any trustee
therefor, unless and until such default shall have been cured or waived or shall
have ceased to exist, no direct or indirect payment (in cash, property,
securities, by set-off or otherwise) shall be made or agreed to be made on
account of the principal of (or premium, if any) or interest on any of the
Securities, or in respect of any redemption, repayment, retirement, purchase or
other acquisition of any of the Securities.
In the event of (a) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceedings relating
to Group, its creditors or its property,
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(b) any proceeding for the liquidation, dissolution or other winding up of
Group, voluntary or involuntary, whether or not involving insolvency or
bankruptcy proceedings, (c) any assignment by Group for the benefit of creditors
or (d) any other marshalling of the assets of Group (each such event, if any,
herein sometimes referred to as a "Proceeding"), all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) shall first be paid in full before any payment or distribution,
whether in cash, securities or other property, shall be made to any Holder of
any of the Securities on account thereof. Any payment or distribution, whether
in cash, securities or other property (other than securities of Group or any
other corporation provided for by a plan of reorganization or readjustment the
payment of which is subordinate, at least to the extent provided in these
subordination provisions with respect to the indebtedness evidenced by the
Securities, to the payment of all Senior Indebtedness at the time outstanding
and to any securities issued in respect thereof under any such plan of
reorganization or readjustment), which would otherwise (but for these
subordination provisions) be payable or deliverable in respect of the Securities
of any series, shall be paid or delivered directly to the holders of Senior
Indebtedness in accordance with the priorities then existing among such holders
until all Senior Indebtedness (including any interest thereon accruing after the
commencement of any Proceeding) shall have been paid in full.
In the event of any Proceeding, after payment in full of all sums owing
with respect to Senior Indebtedness, the Holders of the Securities, together
with the holders of any obligations of Group ranking on a parity with the
Securities, shall be entitled to be paid from the remaining assets of Group the
amounts at the time due and owing on account of unpaid principal of (and
premium, if any) and interest on the Securities and such other obligations
before any payment or other distribution, whether in cash, property or
otherwise, shall be made on account of any capital stock or any obligations of
Group ranking junior to the Securities and such other obligations.
In the event that, notwithstanding the foregoing, any payment or
distribution of any character or any security, whether in cash, securities or
other property (other than securities of Group or any other corporation provided
for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in these subordination provisions
with respect to the indebtedness evidenced by the Securities, to the payment of
all Senior Indebtedness at the time outstanding and to any securities issued in
respect thereof under any such plan of reorganization or readjustment), shall be
received by the Trustee or any Holder in contravention of any of the terms
hereof and before all Senior Indebtedness shall have been paid in full, such
payment or distribution or security shall be received in trust for the benefit
of, and shall be paid over or delivered and transferred to, the holders of the
Senior Indebtedness at the time outstanding in accordance with the priorities
then existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness in full. In the event of the failure of the Trustee or any Holder
to endorse or assign any such payment, distribution or security, each holder of
Senior Indebtedness is hereby irrevocably authorized to endorse or assign the
same.
The Trustee and Holders will take such action (including, without
limitation, the delivery of this Indenture to an agent for the holders of Senior
Indebtedness or consent to the filing of a
<PAGE> 72
65
financing statement with respect hereto) as may, in the opinion of counsel
designated by the holders of a majority in principal amount of the Senior
Indebtedness at the time outstanding, be necessary or appropriate to assure the
effectiveness of the subordination effected by these provisions.
The provisions of this Section 13.2 shall not impair any rights, interests,
remedies or powers of any secured creditor of Group in respect of any security
interest the creation of which is not prohibited by the provisions of this
Indenture.
The securing of any obligations of Group, otherwise ranking on a parity
with the Securities or ranking junior to the Securities, shall not be deemed to
prevent such obligations from constituting, respectively, obligations ranking on
a parity with the Securities or ranking junior to the Securities.
SECTION 13.3. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture, or in any
of the Securities, shall prevent (a) Group at any time, except during the
conditions described in the first paragraph of Section 13.2 or the pendency of
any Proceeding referred to in Section 13.2, from making payments at any time of
principal of (and premium, if any) or interest (including Additional Interest)
on the Securities, or (b) the application by the Trustee of any moneys deposited
with it hereunder to the payment of or on account of the principal of (and
premium, if any) or interest (including any Additional Interest) on the
Securities or the retention of such payment by the Holders, if, at the time of
such application by the Trustee, it did not have knowledge that such payment
would have been prohibited by the provisions of this Article.
SECTION 13.4. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all amounts due or to become due on all
Senior Indebtedness, or the provision for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, the Holders of the Securities shall be subrogated to the extent of
the payments or distributions made to the holders of such Senior Indebtedness
pursuant to the provisions of this Article (equally and ratably with the holders
of all indebtedness of Group which by its express terms is subordinated to
Senior Indebtedness of Group to substantially the same extent as the Securities
are subordinated to the Senior Indebtedness and is entitled to like rights of
subrogation by reason of any payments or distributions made to holders of such
Senior Indebtedness) to the rights of the holders of such Senior Indebtedness to
receive payments and distributions of cash, property and securities applicable
to the Senior Indebtedness until the principal of (and premium, if any) and
interest on the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to the
holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as among Group, its creditors other than holders of Senior Indebtedness,
and the Holders of the Securities, be deemed to be a payment or distribution by
Group to or on account of the Senior Indebtedness.
<PAGE> 73
66
SECTION 13.5. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as between Group and the Holders of the Securities, the
obligations of Group, which are absolute and unconditional, to pay to the
Holders of the Securities the principal of (and premium, if any) and interest
(including any Additional Interest) on the Securities as and when the same shall
become due and payable in accordance with their terms; or (b) affect the
relative rights against Group of the Holders of the Securities and creditors of
Group other than their rights in relation to the holders of Senior Indebtedness;
or (c) prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under this Indenture
including, without limitation, filing and voting claims in any Proceeding,
subject to the rights, if any, under this Article of the holders of Senior
Indebtedness to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.
SECTION 13.6. Trustee to Effectuate Subordination.
Each Holder of a Security by his or her acceptance thereof authorizes and
directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination provided in this
Article and appoints the Trustee his or her attorney-in-fact for any and all
such purposes.
SECTION 13.7. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of Group or by
any act or failure to act, in good faith, by any such holder, or by any
noncompliance by Group with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such holder may have or
be otherwise charged with.
Without in any way limiting the generality of the immediately preceding
paragraph, the holders of Senior Indebtedness may, at any time and from to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness, or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against Group and any other Person.
<PAGE> 74
67
SECTION 13.8. Notice to Trustee.
Group shall give prompt written notice to the Trustee of any fact known to
Group which would prohibit the making of any payment to or by the Trustee in
respect of the Securities. Notwithstanding the provisions of this Article or any
other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of the Securities, unless and until the
Trustee shall have received written notice thereof from Group or a holder of
Senior Indebtedness or from any trustee, agent or representative therefor;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section at least two Business Days prior to the date upon
which by the terms hereof any monies may become payable for any purpose
(including, without limitation, the payment of the principal of (and premium, if
any) or interest (including any Additional Interest) on any Security), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such monies and to apply the same to
the purpose for which they were received and shall not be affected by any notice
to the contrary which may be received by it within two Business Days prior to
such date.
Subject to the provisions of Section 6.1, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Senior Indebtedness (or a trustee or attorney-in-fact
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee or attorney-in-fact therefor). In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any Person as a holder of Senior Indebtedness to participate in
any payment or distribution pursuant to this Article, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article, and if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 13.9. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of Group referred to in this
Article, the Trustee, subject to the provisions of Section 6.1, and the Holders
of the Securities shall be entitled to rely upon any order or decree entered by
any court of competent jurisdiction in which such Proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and
other indebtedness of Group, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article.
<PAGE> 75
68
SECTION 13.10. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee, in its capacity as trustee under this Indenture, shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall
not be liable to any such holders if it shall in good faith mistakenly pay over
or distribute to Holders of Securities or to Group or to any other Person cash,
property or securities to which any holders of Senior Indebtedness shall be
entitled by virtue of this Article or otherwise. With respect to the Holders of
Senior Indebtedness, the Trustee undertakes to perform or to observe only such
of its covenants or obligations as are specifically set forth in this Article
and no implied covenants or obligations with respect to Holders of Senior
Indebtedness shall be read into this Indenture against the Trustee.
SECTION 13.11. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of
Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.7.
SECTION 13.12. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by Group and be then acting hereunder, the term "Trustee" as used in
this Article shall in such case (unless the context otherwise requires) be
construed as extending to and including such Paying Agent within its meaning as
fully for all intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee.
<PAGE> 76
69
* * * * *
This instrument 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.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and Delphi Financial Group, Inc. has caused its corporate seal to
be hereunder affixed and attested, all as of the day and year first above
written.
DELPHI FINANCIAL GROUP, INC.
By: ______________________________
Name:
Title:
Attest:
________________________________
Name:
Title:
WILMINGTON TRUST COMPANY
as Trustee
By: ______________________________
Name:
Title:
Attest:
________________________________
Name:
Title:
<PAGE> 77
70
STATE OF )
) : ss.:
COUNTY OF )
On the ___ day of _________, 199_, before me personally came , to me known,
who, being by me duly sworn, did depose and say that he/she is ________________
of Delphi Financial Group, Inc., one of the corporations described in and which
executed the foregoing instrument; that he/she knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that he/she signed his/her name thereto by like authority.
___________________
Notary Public
STATE OF NEW YORK )
): ss.:
COUNTY OF NEW YORK )
On the ___ day of _________, 199_, before me personally came , to me known,
who, being by me duly sworn, did depose and say that he/she is ________________
of Wilmington Trust Company, one of the corporations described in and which
executed the foregoing instrument; that he/she signed his/her name thereto
pursuant to the bylaws of said Corporation.
___________________
Notary Public
<PAGE> 1
Exhibit 4(c)
- --------------------------------------------------------------------------------
GUARANTEE AGREEMENT
Between
DELPHI FINANCIAL GROUP, INC.
(as Guarantor)
and
WILMINGTON TRUST COMPANY
(as Trustee)
dated as of
March 1, 1997
- --------------------------------------------------------------------------------
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
ARTICLE I
<S> <C>
DEFINITIONS...................................... 1
Section 1.1. Definitions......................................................... 1
ARTICLE II
TRUST INDENTURE ACT.................................. 4
SECTION 2.1. Trust Indenture Act; Application.................................... 4
SECTION 2.2. List of Holders..................................................... 4
SECTION 2.3. Reports by the Guarantee Trustee.................................... 4
SECTION 2.4. Periodic Reports to the Guarantee Trustee........................... 5
SECTION 2.5. Evidence of Compliance with Conditions Precedent.................... 5
SECTION 2.6. Events of Default; Waiver........................................... 5
SECTION 2.7. Event of Default; Notice............................................ 5
SECTION 2.8. Conflicting Interests............................................... 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE................... 6
SECTION 3.1. Powers and Duties of the Guarantee Trustee.......................... 6
SECTION 3.2. Certain Rights of Guarantee Trustee................................. 7
SECTION 3.3. Indemnity........................................................... 9
ARTICLE IV
GUARANTEE TRUSTEE................................... 9
SECTION 4.1. Guarantee Trustee: Eligibility...................................... 9
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee..................................................................... 10
</TABLE>
ARTICLE V
- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
GUARANTEE....................................... 11
SECTION 5.1. Guarantee........................................................... 11
SECTION 5.2. Waiver of Notice and Demand......................................... 11
SECTION 5.3. Obligations Not Affected............................................ 11
SECTION 5.4. Rights of Holders................................................... 12
SECTION 5.5. Guarantee of Payment................................................ 12
SECTION 5.6. Subrogation......................................................... 12
SECTION 5.7. Independent Obligations............................................. 13
ARTICLE VI
COVENANTS AND SUBORDINATION.............................. 13
SECTION 6.1. Subordination....................................................... 13
SECTION 6.2. Pari Passu Guarantees............................................... 13
ARTICLE VII
TERMINATION...................................... 13
SECTION 7.1. Termination......................................................... 13
ARTICLE VIII
MISCELLANEOUS..................................... 14
SECTION 8.1. Successors and Assigns.............................................. 14
SECTION 8.2. Amendments.......................................................... 14
Section 8.3. Notices............................................................. 14
SECTION 8.4. Benefit............................................................. 15
SECTION 8.5. Interpretation...................................................... 15
SECTION 8.6. Governing Law....................................................... 16
</TABLE>
- ii -
<PAGE> 4
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of March 1, 1997, is executed and
delivered by DELPHI FINANCIAL GROUP, INC., a Delaware corporation (the
"Guarantor") having its principal office at 1105 North Market Street, Suite
1230, P.O. Box 8985, Wilmington, Delaware 19899, and WILMINGTON TRUST COMPANY, a
Delaware banking corporation, as trustee (the "Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Capital
Securities and Common Securities (each as defined herein and together, the
"Securities") of Delphi Funding L.L.C., a Delaware limited liability company
(the "Issuer").
WHEREAS, pursuant to an Amended and Restated Limited Liability Company
Agreement, dated as of March 25, 1997 (the "Company Agreement"), among the
Guarantor, as Managing Member, Chestnut Investors III, Inc., as Resigning
Member, and the Holders from time to time of the Capital Securities of the
Issuer, the Issuer is issuing $100,000,000 aggregate Liquidation Amount (as
defined in the Company Agreement) of its 9.310% Capital Securities, Series A,
Liquidation Amount $1,000 per security (the "Capital Securities") representing
preferred limited liability company interests in the Issuer and having the terms
set forth in the Company Agreement;
WHEREAS, the Capital Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined herein), will be used to purchase the Debentures
(as defined in the Company Agreement) of the Guarantor which will be held by the
Company; and
WHEREAS, as incentive for the Holders to purchase Securities the Guarantor
desires irrevocably and unconditionally to agree, to the extent set forth
herein, 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.
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 Agreement for the
benefit of the Holders from time to time of the Securities.
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined
<PAGE> 5
2
terms used but not otherwise defined herein shall have the meanings assigned to
such terms in the Company Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to be an Affiliate of the Issuer. For the purposes
of this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Common Securities" means the securities representing common limited
liability company interests in the Issuer.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement; provided, however, that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 90 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Securities, to the extent not paid or made by
or on behalf of the Issuer: (i) any accumulated and unpaid Distributions (as
defined in the Company Agreement) required to be paid on the Securities, to the
extent the Issuer shall have funds on hand available therefor at such time, (ii)
the redemption price, including all accrued and unpaid Distributions to the date
of redemption (the "Redemption Price"), with respect to any Securities called
for redemption by the Issuer, to the extent the Issuer shall have funds on hand
available therefor at such time, and (iii) upon a voluntary or involuntary
termination, winding up or liquidation of the Issuer, unless Debentures are
distributed to the Holders, the lesser of (a) the aggregate of the Liquidation
Amount plus accrued and unpaid Distributions to the date of payment and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
in liquidation of the Issuer after satisfaction of liabilities to creditors of
the Issuer as required by applicable law (in either case, the "Liquidation
Distribution").
"Guarantee Trustee" means Wilmington Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement, and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of the
Issuer, of any Securities; provided, however, that in determining whether the
holders of the requisite percentage of Securities have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the Guarantor,
the Guarantee Trustee, or any Affiliate of the Guarantor or the Guarantee
Trustee.
<PAGE> 6
3
"Indenture" means the Subordinated Indenture dated as of March 1, 1997, as
supplemented and amended, between the Guarantor and Wilmington Trust Company, as
trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in aggregate Liquidation Amount of the Securities" means, except
as provided by the Trust Indenture Act, a vote by the Holder(s), voting
separately as a class, of more than 50% of the aggregate Liquidation Amount of
all then outstanding Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman or a Vice Chairman of the Board of Directors of such
Person or the President or a Vice President of such Person, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
such Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each officer, 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.
"Responsible Officer" when used with respect to the Guarantee Trustee means
any officer of the Guarantee Trustee assigned by the Guarantee Trustee from time
to time to administer its corporate trust matters.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
<PAGE> 7
4
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) Although this Guarantee Agreement shall not be qualified under the
Trust Indenture Act, it shall be governed by the provisions thereof to the
extent provided herein as though it were subject thereto.
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2. List of Holders.
(a) The Guarantor will furnish or cause to be furnished to the Guarantee
Trustee:
(i) semi-annually, not more than 15 days after January 15 and July 15
in each year, a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders as of such January 1 and
July 1, and
(ii) at such other times as the Guarantee Trustee may request in
writing, within 30 days after the receipt by the Guarantor of any such
request, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished,
excluding from any such list names and addresses received by the Guarantee
Trustee in its capacity as Securities Registrar.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act.
SECTION 2.3. Reports by the Guarantee Trustee.
The Guarantee Trustee shall transmit to Holders such reports concerning the
Guarantee Trustee and its actions under this Guarantee Agreement as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. If required by Section 313(a) of the Trust Indenture
Act, the Guarantee Trustee shall, within sixty days after each May 15 following
the date of this Guarantee Agreement deliver to Holders a brief report, dated as
of such May 15, which complies with the provisions of such Section 313(a).
<PAGE> 8
5
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee and the Holders such
documents, reports and information, if any, as required by Section 314 of the
Trust Indenture Act and the compliance certificate required by Section 314 of
the Trust Indenture Act, in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act. Delivery of such reports, information
and documents to the Guarantee Trustee is for informational purposes only and
the Guarantee Trustee's receipt of such shall not constitute constructive notice
of any information contained therein, including the Guarantor's compliance with
any of its covenants hereunder (as to which the Guarantee Trustee is entitled to
rely exclusively on Officers' Certificates).
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in aggregate Liquidation Amount of the Securities
may, by vote, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders,
notices of all Events of Default actually known to the Guarantee Trustee, unless
such defaults have been cured before the giving of such notice, provided, that,
except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the Board of Directors, the executive committee or a trust committee of the
Board of Directors and/or Responsible Officers of the Guarantee Trustee in good
faith determines that the withholding of such notice is in the interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of
Default.
<PAGE> 9
6
SECTION 2.8. Conflicting Interests.
The Company Agreement shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for the
benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(iv) 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 shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read into this Guarantee
Agreement against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement 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 Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee Agreement,
and the Guarantee
<PAGE> 10
7
Trustee shall not be liable, except for the performance of such duties and
obligations as are specifically set forth in this Guarantee Agreement; 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 Agreement; but in the case of any
such certificates or opinions that by any provision hereof or of the Trust
Indenture Act 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
Agreement;
(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 aggregate
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 Agreement; and
(iv) no provision of this Guarantee Agreement 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
Agreement and adequate indemnity against such risk or liability is not
reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document reasonably believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties.
<PAGE> 11
8
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take 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 rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel of its
selection, and the written advice or opinion of such legal counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken
by it hereunder in good faith and in accordance with such advice or
opinion. Such legal counsel may be legal counsel to the Guarantor or any of
its Affiliates and may be one of its employees. The Guarantee Trustee shall
have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have provided
to the Guarantee Trustee such adequate security and indemnity as would
satisfy a reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Guarantee Trustee; provided that, nothing contained in this Section
3.2(a)(v) shall be taken to relieve the Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Guarantee Agreement.
(vi) 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.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, and the Guarantee Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
<PAGE> 12
9
(viii) Whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive written instructions
with respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders, (B) may refrain from enforcing such remedy or right or taking such
other action until such written instructions are received, and (C) shall be
protected in acting in accordance with such written instructions.
(ix) The Guarantee Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Guarantee Agreement.
(b) No provision of this Guarantee Agreement 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 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 to act in accordance with such power and
authority.
SECTION 3.3. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Guarantee Trustee, arising out of or in connection
with the acceptance or administration of this Guarantee Agreement, including the
reasonable costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee: Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of Section
310(a) of the Trust Indenture Act. If
<PAGE> 13
10
such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining authority,
then, for the purposes of this Section and to the extent permitted by the
Trust Indenture Act, 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 the Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed 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. If an instrument of acceptance by a Successor Guarantee Trustee shall
not have been delivered to the Guarantee Trustee within 30 days after such
removal, the Guarantee Trustee being removed may petition any court of competent
jurisdiction for the appointment of a Successor Guarantee Trustee.
(c) The Guarantee Trustee appointed hereunder shall hold 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 resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, 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.
<PAGE> 14
11
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer 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 Issuer to pay such amounts to the Holders.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee Agreement
and any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Guarantee Trustee,
Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Securities to be performed or
observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension or deferral of any interest
payment period on the Debentures as provided in the Indenture), 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;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Securities, or any action
on the part of the Issuer granting indulgence or extension of any kind;
<PAGE> 15
12
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in aggregate
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 Agreement or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv)
any Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a
legal proceeding against the Guarantee Trustee, the Issuer or any other Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Debentures to Holders as provided in the
Company Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory
<PAGE> 16
13
provisions of law) be entitled to enforce or exercise any rights which 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 Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the 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 Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 5.3 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Indebtedness (as defined in the
Indenture) of the Guarantor, except those made pari passu or subordinate to such
obligations expressly by their terms, in the same manner as set forth in Article
XIII of the Indenture.
SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee Agreement shall rank
pari passu with the obligations of the Guarantor under any similar guarantee
agreements issued by the Guarantor on behalf of the holders of preferred
securities issued by any Trust (as defined in the Indenture).
ARTICLE VII
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Securities, (ii) the
distribution of Debentures to the
<PAGE> 17
14
Holders in exchange for all of the Securities or (iii) full payment of the
amounts payable in accordance with the Company Agreement upon liquidation of the
Issuer. Notwithstanding the foregoing, this Guarantee Agreement will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid with respect to Securities or this
Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement 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. Except in connection with a consolidation, merger or sale involving
the Guarantor that is permitted under Article VIII of the Indenture and pursuant
to which the successor or assignee agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its obligations hereunder.
SECTION 8.2. Amendments.
Except with respect to any changes which do not adversely affect the rights
of the Holders or the Guarantee Trustee in any material respect (in which case
no consent of the Holders or the Guarantee Trustee, as the case may be, will be
required), this Guarantee Agreement may only be amended by the Guarantor with
the prior approval of the Holders of not less than a Majority in Liquidation
Amount of all the outstanding Securities and of the Guarantee Trustee. The
provisions of Article VI of the Company Agreement concerning meetings of the
Holders shall apply to the giving of such approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such other
address, facsimile number or to the attention of such other Person as the
Guarantor may give notice to the Holders:
Delphi Financial Group, Inc.
1105 North Market Street, Suite 1230
P.O Box 8985
Wilmington, Delaware 19899
Facsimile No.: (___) ___-____
Attention: _______________
<PAGE> 18
15
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:
Delphi Funding, L.L.C.
c/o Delphi Financial Group, Inc.
1105 North Market Street, Suite 1230
P.O Box 8985
Wilmington, Delaware 19899
Facsimile No.: (___) ___-____
Attention: _______________
with a copy to:
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890
Facsimile No.: (___) ___-____
Attention: Corporate Trust Administration
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder 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 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and is
not separately transferable from the Securities.
SECTION 8.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
<PAGE> 19
16
(a) capitalized terms used in this Guarantee Agreement but not defined in
the preamble hereto have the respective meanings assigned to them in Section
1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections are
to Articles and Sections of this Guarantee Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include the
masculine, feminine and neuter genders.
SECTION 8.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
<PAGE> 20
17
This instrument 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.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
DELPHI FINANCIAL GROUP, INC.
By: ____________________________________
Name:
Title:
Attest:
_____________________________
Name:
Title:
WILMINGTON TRUST COMPANY
as Guarantee Trustee
By: ____________________________________
Name:
Title:
Attest:
_____________________________
Name:
Title:
<PAGE> 21
STATE OF )
) : ss.:
COUNTY OF )
On the ___ day of _________, 199_, before me personally came
_________________________, to me known, who, being by me duly sworn, did depose
and say that he/she is ________________ of Delphi Financial Group, Inc., one of
the corporations described in and which executed the foregoing instrument; that
he/she knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation; and that he/she signed his/her name
thereto by like authority.
-----------------------------
Notary Public
STATE OF NEW YORK )
) : ss.:
COUNTY OF NEW YORK )
On the ___ day of _________, 199_, before me personally came
_________________________, to me known, who, being by me duly sworn, did depose
and say that he/she is ________________ of Wilmington Trust Company, one of the
corporations described in and which executed the foregoing instrument, and that
he/she signed his/her name thereto pursuant to the bylaws of said Corporation.
-----------------------------
Notary Public
<PAGE> 1
EXHIBIT 12
DELPHI FINANCIAL GROUP, INC. AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
(dollars in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------
1996 1995 1994 1993 1992
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Income from continuing opera- $ 81,350 $50,912 $37,642 $72,851 $37,153
tions before provision for in-
come taxes
Add:
Interest on indebtedness 18,269 13,257 12,252 17,720 19,949
Rental expense representative
of the interest factor 863 866 858 839 827
-------- ------- ------- ------- -------
Total Earnings $100,482 $65,035 $50,752 $91,410 $57,929
======== ======= ======= ======= =======
Fixed Charges:
Interest on indebtedness $ 18,269 $13,257 $12,252 $17,720 $19,949
Rental expense representative
of the interest factor 863 866 858 839 827
-------- ------- ------- ------- -------
Total fixed charges $ 19,132 $14,123 $13,110 $18,559 $20,776
======== ======= ======= ======= =======
Ratio of earnings to fixed 5.25 4.60 3.87 4.93 2.79
charges ======== ======= ======= ======= =======
</TABLE>
<PAGE> 1
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |X|
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
DELPHI FINANCIAL GROUP, INC.
(Exact name of obligor as specified in its charter)
Delaware 13-3427277
(State of incorporation) (I.R.S. employer identification no.)
1105 North Market Street
Suite 1230
P.O. Box 8985
Wilmington, Delaware 19899
(Address of principal executive offices) (Zip Code)
% Junior Subordinated Deferrable Interest Debentures, Series A
(Title of the indenture securities)
================================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee
and upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to commence
business and the authorization of Wilmington Trust Company to
exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 19th day
of March, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest:/s/ Donald G. MacKelcan By:/s/ Emmett R. Harmon
------------------------- -------------------------
Assistant Secretary Name: Emmett R. Harmon
Title: Vice President
2
<PAGE> 3
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
<PAGE> 4
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "Wilmington Trust Company" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of Delaware
is at Rodney Square North, in the City of Wilmington, County of New
Castle; the name of its resident agent is Wilmington Trust Company whose
address is Rodney Square North, in said City. In addition to such
principal office, the said corporation maintains and operates branch
offices in the City of Newark, New Castle County, Delaware, the Town of
Newport, New Castle County, Delaware, at Claymont, New Castle County,
Delaware, at Greenville, New Castle County Delaware, and at Milford
Cross Roads, New Castle County, Delaware, and shall be empowered to
open, maintain and operate branch offices at Ninth and Shipley Streets,
418 Delaware Avenue, 2120 Market Street, and 3605 Market Street, all in
the City of Wilmington, New Castle County, Delaware, and such other
branch offices or places of business as may be authorized from time to
time by the agency or agencies of the government of the State of
Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation
are to do any or all of the things herein mentioned as fully and to the
same extent as natural persons might or could do and in any part of the
world, viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and property, and to appoint such officers
and agents as the business of the
<PAGE> 5
Corporation shall require, to make by-laws not inconsistent with
the Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive
deposits of money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of exchange, and
generally to use, exercise and enjoy all the powers, rights,
privileges and franchises incident to a corporation which are
proper or necessary for the transaction of the business of the
Corporation hereby created.
(2) To insure titles to real and personal property, or any estate
or interests therein, and to guarantee the holder of such property,
real or personal, against any claim or claims, adverse to his
interest therein, and to prepare and give certificates of title for
any lands or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every
description, and to carry on the business of conveyancing in all
its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort
and kind, from executors, administrators, guardians, public
officers, courts, receivers, assignees, trustees, and from all
fiduciaries, and from all other persons and individuals, and from
all corporations whether state, municipal, corporate or private,
and to rent boxes, safes, vaults and other receptacles for such
property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or
underwriting the stock, bonds or other obligations of any
corporation, association, state or municipality, and may receive
and manage any sinking fund therefor on such terms as may be agreed
upon between the two parties, and in like manner may act as
Treasurer of any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
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(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding places
of responsibility or trust; to become surety for any person, or
persons, for the faithful performance of any trust, office, duty,
contract or agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations, or in like
manner become surety upon any bond, recognizance, obligation,
judgment, suit, order, or decree to be entered in any court of
record within the State of Delaware or elsewhere, or which may now
or hereafter be required by any law, judge, officer or court in the
State of Delaware or elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity in the receiving, holding, managing, and disposing of any
and all estates and property, real, personal or mixed, and to be
appointed as such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator, guardian
or bailee by any persons, corporations, court, officer, or
authority, in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity, it shall not be
required to give bond with surety, but its capital stock shall be
taken and held as security for the performance of the duties
devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of
the duties which it may undertake or be called upon to perform, or
for the assumption of any responsibility the said Corporation may
be entitled to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without the
State of Delaware, or of the Government of the United States, or of
any state, territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect, receipt for,
and dispose of interest, dividends and income upon and from any of
the bonds, mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in respect of
all such bonds, mortgages, debentures, notes, shares of capital
stock, securities, obligations, contracts, evidences of
indebtedness and other property, any and all the rights, powers and
privileges of individual
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<PAGE> 7
owners thereof, including the right to vote thereon; to invest and
deal in and with any of the moneys of the Corporation upon such
securities and in such manner as it may think fit and proper, and
from time to time to vary or realize such investments; to issue
bonds and secure the same by pledges or deeds of trust or mortgages
of or upon the whole or any part of the property held or owned by
the Corporation, and to sell and pledge such bonds, as and when the
Board of Directors shall determine, and in the promotion of its
said corporate business of investment and to the extent authorized
by law, to lease, purchase, hold, sell, assign, transfer, pledge,
mortgage and convey real and personal property of any name and
nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that
the said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and
to undertake the whole or any part of the assets and liabilities of
any person, firm, association or corporation, and to pay for the
same in cash, stock of this Corporation, bonds or otherwise; to
hold or in any manner to dispose of the whole or any part of the
property so purchased; to conduct in any lawful manner the whole or
any part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose
of property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and,
without limit as to amount, to draw, make, accept, endorse,
discount, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures, and other negotiable or
transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent
as natural persons might or could do, to purchase or otherwise
acquire, to hold, own, to mortgage, sell, convey or otherwise
dispose of, real and personal property, of every class and
description, in any State, District, Territory or Colony of the
United States, and in any foreign country or place.
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<PAGE> 8
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except
where otherwise expressed in said paragraph) be nowise limited or
restricted by reference to or inference from the terms of any other
clause of this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the clauses of
this paragraph shall be regarded as independent objects, purposes
and powers.
Fourth: - (a) The total number of shares of all classes of stock which
the Corporation shall have authority to issue is forty-one million
(41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock");
and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and
the preferences and relative, participating, optional and other special
rights of each such series, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other
series at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article Fourth, the Board of
Directors of the Corporation is hereby expressly granted authority to
fix by resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers and
the designations, preferences and relative, optional and other special
rights, and the qualifications, limitations and restrictions of such
series, including, but without limiting the generality of the foregoing,
the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number
may be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall
be paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes,
or series of the same or other class of
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<PAGE> 9
stock and whether such dividends shall be cumulative or
non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any
other class or classes of stock of the Corporation and the terms
and conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject
to redemption, and the redemption price or prices and the time or
times at which, and the terms and conditions on which, Preferred
Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of such
series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under
such circumstances and on such conditions as the Board of Directors
may determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section
(b) of this Article Fourth), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section
(b) of this Article Fourth), and subject further to any conditions which
may be fixed in accordance with the provisions of section (b) of this
Article Fourth, then and not otherwise the holders of Common Stock shall
be entitled to receive such dividends as may be declared from time to
time by the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article Fourth), to be distributed to the holders of Preferred
Stock in the event of voluntary or involuntary liquidation,
distribution or sale of assets, dissolution or winding-up, of the
Corporation, the holders of the Common Stock shall be entitled to
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<PAGE> 10
receive all of the remaining assets of the Corporation, tangible
and intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of
Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article Fourth, each
holder of Common Stock shall have one vote in respect of each share
of Common Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or
series of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of
indebtedness, debentures or other securities convertible into or
exchangeable for stock of the Corporation of any class or series, or
carrying any right to purchase stock of any class or series, but any
such unissued stock, additional authorized issue of shares of any class
or series of stock or securities convertible into or exchangeable for
stock, or carrying any right to purchase stock, may be issued and
disposed of pursuant to resolution of the Board of Directors to such
persons, firms, corporations or associations, whether such holders or
others, and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case, be
as fixed from time to time by the Board of Directors in the resolution
or resolutions adopted pursuant to authority granted in section (b) of
this Article Fourth and the consent, by class or series vote or
otherwise, of the holders of such of the series of Preferred Stock as
are from time to time outstanding shall not be required for the issuance
by the Board of Directors of any other series of Preferred Stock whether
or not the powers, preferences and rights of such other series shall be
fixed by the Board of Directors as senior to, or on a parity with, the
powers, preferences and rights of such outstanding series, or any of
them; provided, however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred Stock adopted
pursuant to section (b) of this Article Fourth that the consent of the
holders of a majority (or such greater proportion as shall be therein
fixed) of the outstanding shares of such series voting thereon shall be
required for the issuance of any or all other series of Preferred Stock.
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<PAGE> 11
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for
such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board
of Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a majority
of the stock of the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the
whole Board, provided, however, that the number of directors shall not
be reduced so as to shorten the term of any director at the time in
office, and provided further, that the number of directors constituting
the whole Board shall be twenty-four until otherwise fixed by a majority
of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in 1982,
directors of the first class shall be elected to hold office for a term
expiring at the next succeeding annual meeting, directors of the second
class shall be elected to hold office for a term expiring at the second
succeeding annual meeting and directors of the third class shall be
elected to hold office for a term expiring at the third succeeding
annual meeting. Any vacancies in the Board of Directors for any reason,
and any newly created directorships resulting from any increase in the
directors, may be filled by the Board of Directors, acting by a majority
of the directors then in office, although less than a quorum, and any
directors so chosen shall hold office until the next annual election of
directors. At such election, the stockholders shall elect a successor to
such director to hold office until the next election of the class for
which such director shall have been chosen and until his successor shall
be elected and qualified. No decrease in the number of directors shall
shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter
or Act of Incorporation or the ByLaws of the Corporation), any director
or the entire Board of Directors of the
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Corporation may be removed at any time without cause, but only by the
affirmative vote of the holders of two-thirds or more of the outstanding
shares of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board
of Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing,
delivered or mailed by first class United States mail, postage prepaid,
to the Secretary of the Corporation not less than 14 days nor more than
50 days prior to any meeting of the stockholders called for the election
of directors; provided, however, that if less than 21 days' notice of
the meeting is given to stockholders, such written notice shall be
delivered or mailed, as prescribed, to the Secretary of the Corporation
not later than the close of the seventh day following the day on which
notice of the meeting was mailed to stockholders. Notice of nominations
which are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee
proposed in such notice, (ii) the principal occupation or employment of
such nominee and (iii) the number of shares of stock of the Corporation
which are beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so
declare to the meeting and the defective nomination shall be
disregarded.
(g) No action required to be taken or which may be taken at any annual
or special meeting of stockholders of the Corporation may be taken
without a meeting, and the power of stockholders to consent in writing,
without a meeting, to the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find
necessary or proper.
Seventh: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General Corporation
Law", approved March 10, 1899, as from time to time amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
9
<PAGE> 13
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority of
the whole Board, may designate any of their number to constitute an
Executive Committee, which Committee, to the extent provided in said
resolution, or in the By-Laws of the Company, shall have and may
exercise all of the powers of the Board of Directors in the management
of the business and affairs of the Corporation, and shall have power to
authorize the seal of the Corporation to be affixed to all papers which
may require it.
Eleventh: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the
world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make,
alter or repeal any By-Law whether or not adopted by them, provided
however, that any such additional By-Laws, alterations or repeal may be
adopted only by the affirmative vote of the holders of two-thirds or
more of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (considered for
this purpose as one class).
Fourteenth: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be from
time to time designated by them.
Fifteenth: - (a) In addition to any affirmative vote required by law,
and except as otherwise expressly provided in sections (b) and (c) of
this Article Fifteenth:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any Interested
Stockholder (as hereinafter defined) or (ii) any other corporation
(whether or not itself an Interested Stockholder), which, after
such merger or consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair market value
of $1,000,000 or more, or
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(C) the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of related transactions) of any
securities of the Corporation or any Subsidiary to any Interested
Stockholder or any Affiliate of any Interested Stockholder in
exchange for cash, securities or other property (or a combination
thereof) having an aggregate fair market value of $1,000,000 or
more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or
any similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly
or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities
of the Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any Affiliate of
any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
Fifteenth shall mean any transaction which is referred to any one
or more of clauses (A) through (E) of paragraph 1 of the section
(a).
(b) The provisions of section (a) of this Article Fifteenth shall
not be applicable to any particular business combination and such
business combination shall require only such affirmative vote as is
required by law and any other provisions of the Charter or Act of
Incorporation of By-Laws if such business combination has been
approved by a majority of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary)
who or which as of the record date for the determination of stockholders
entitled to notice of and to vote on
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such business combination, or immediately prior to the consummation of
any such transaction:
(A) is the beneficial owner, directly or indirectly, of more than
10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or
indirectly, of not less than 10% of the then outstanding voting
Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested
Stockholder, and such assignment or succession shall have occurred
in the course of a transaction or series of transactions not
involving a public offering within the meaning of the Securities
Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has
(i) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any agreement,
arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement, or
upon exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
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(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect
in December 31, 1981) is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition
of Investment Stockholder set forth in paragraph (2) of this section
(c), the term "Subsidiary" shall mean only a corporation of which a
majority of each class of equity security is owned, directly or
indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article Fifteenth on the basis
of information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an
Affiliate or Associate of another, (3) whether a person has an
agreement, arrangement or understanding with another as to the
matters referred to in paragraph (3) of section (c), or (4) whether
the assets subject to any business combination or the consideration
received for the issuance or transfer of securities by the
Corporation, or any Subsidiary has an aggregate fair market value
of $1,00,000 or more.
(e) Nothing contained in this Article Fifteenth shall be construed
to relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles Fifth, Thirteenth, Fifteenth
or Sixteenth of this Charter or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware
General Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on January 16, 1997
<PAGE> 18
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its
<PAGE> 19
members, or at the call of the Chairman of the Board of Directors or the
President.
Section 6. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
ARTICLE III
Committees
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more than
nine members who shall be selected by the Board of Directors from its own
members and who
2
<PAGE> 20
shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the
Board of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The majority
of its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Executive Committee may be held at any time
when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be
kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity
to prevent the conduct and management of the affairs and business of the Company
by its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such implementary
Resolutions shall be suspended during such a disaster period until it shall be
determined by any interim Executive Committee acting under this section that it
shall be to the advantage of the Company to resume the conduct and management of
its affairs and business under all of the other provisions of these By-Laws.
3
<PAGE> 21
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than
thirteen members who shall be selected by the Board of Directors, a majority of
whom shall be members of the Board of Directors and who shall hold office during
the pleasure of the Board.
(B) The Trust Committee shall have general supervision over the
Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(D) Minutes of each meeting of the Trust Committee shall be
kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who
shall be selected by the Board of Directors from its own members, none of whom
shall be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the
Audit Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more
than
4
<PAGE> 22
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any
time by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by
the Board of Directors as an associate director, to serve during the pleasure of
the Board.
(B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absence or disqualified member.
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of
5
<PAGE> 23
Directors shall preside at all meetings of the Board of Directors at which the
Chairman of the Board shall not be present and shall have such further authority
and powers and shall perform such duties as the Board of Directors or the
Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for all
monies, funds and valuables of the Company and for the keeping of proper records
of the evidence of property or indebtedness and of all the transactions of the
Company. He shall have general supervision of the expenditures of the Company
and shall report to the Board of Directors at each regular meeting of the
condition of the Company, and perform such other duties as may be assigned to
him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
6
<PAGE> 24
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to
all Vice Presidents with such functional titles as shall be determined from time
to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificate of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of
7
<PAGE> 25
any dividend, or to any allotment or rights, or to exercise any rights in
respect of any change, conversion or exchange of capital stock, or in connection
with obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the date
for the allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in connection with
obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words "Wilmington Trust
Company" within the inner circle the words "Wilmington,
Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
8
<PAGE> 26
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses,
under this Article X is not paid in full within ninety days after a written
claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In any
such action the Corporation shall have the burden of proving that the claimant
was not entitled to the requested indemnification of payment of expenses
9
<PAGE> 27
under applicable law.
(D) The rights conferred on any person by this Article X shall
not be exclusive of any other rights which such person may have or hereafter
acquire under any statute, provision of the Charter or Act of Incorporation,
these By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
(E) Any repeal or modification of the foregoing provisions of
this Article X shall not adversely affect any right or protection hereunder of
any person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in whole
or in part, and any new By-Law or By-Laws adopted at any regular or special
meeting of the Board of Directors by a vote of the majority of all the members
of the Board of Directors then in office.
10
<PAGE> 28
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: March 19, 1997 By: /s/ Emmett R. Harmon
--------------------
Name: Emmett R. Harmon
Title: Vice President
<PAGE> 29
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ---------------------------------------------------------- ------------------
Name of Bank City
in the State of DELAWARE , at the close of business on December 31, 1996.
-----------
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins............213,895
Interest-bearing balances.......................................... 0
Held-to-maturity securities.......................................... 465,818
Available-for-sale securities..........................................752,297
Federal funds sold......................................................95,000
Securities purchased under agreements to resell........................ 39,190
Loans and lease financing receivables:
Loans and leases, net of unearned income............. 3,634,003
LESS: Allowance for loan and lease losses........... 51,847
LESS: Allocated transfer risk reserve............... 0
Loans and leases, net of unearned income, allowance, and reserve...3,582,156
Assets held in trading accounts..............................................0
Premises and fixed assets (including capitalized leases)................89,129
Other real estate owned................................................. 3,520
Investments in unconsolidated subsidiaries and associated companies....... 52
Customers' liability to this bank on acceptances outstanding.................0
Intangible assets........................................................4,593
Other assets...........................................................114,300
Total assets.........................................................5,359,950
CONTINUED ON NEXT PAGE
<PAGE> 30
LIABILITIES
Deposits:
In domestic offices..................................................3,749,697
Noninterest-bearing ............... 852,790
Interest-bearing................... 2,896,907
Federal funds purchased................................................ 77,825
Securities sold under agreements to repurchase........................ 192,295
Demand notes issued to the U.S. Treasury................................53,526
Trading liabilities..........................................................0
Other borrowed money:..................................................///////
With original maturity of one year or less.....................714,000
With original maturity of more than one year....................43,000
Mortgage indebtedness and obligations under capitalized leases...............0
Bank's liability on acceptances executed and outstanding.....................0
Subordinated notes and debentures............................................0
Other liabilities.......................................................98,756
Total liabilities....................................................4,929,099
Limited-life preferred stock and related surplus.............................0
EQUITY CAPITAL
Perpetual preferred stock and related surplus................................0
Common Stock...............................................................500
Surplus.................................................................62,118
Undivided profits and capital reserves.................................367,371
Net unrealized holding gains (losses) on available-for-sale securities.....862
Total equity capital...................................................430,851
Total liabilities, limited-life preferred stock, and equity capital..5,359,950
2
