<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 30, 1998
REGISTRATION NO. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
--------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------
DYNEGY INC. DYNEGY CAPITAL TRUST II
(Exact Name of Registrant as (Exact Name of Registrant as Specified in
Specified in its Charter) its Charter)
94-3248415 APPLIED FOR
(I.R.S. Employer Identification (I.R.S. Employer Identification No.)
No.)
DELAWARE
DELAWARE (State of organization)
(State of incorporation)
C/O DYNEGY INC.
1000 LOUISIANA, SUITE 5800 1000 LOUISIANA, SUITE 5800
HOUSTON, TEXAS 77002 HOUSTON, TEXAS 77002
(713) 507-6400 (713) 507-6400
(Address, including zip code, (Address, including zip code, and
and telephone number, telephone number,
including area code, of including area code, of Registrant's
Registrant's principal executive principal executive office)
office)
KENNETH E. RANDOLPH, ESQ.SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
1000 LOUISIANA, SUITE 5800
HOUSTON, TEXAS 77002
(713) 507-6400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------
Copies To:
VINSON & ELKINS L.L.P.
1001 FANNIN, SUITE 2300
HOUSTON, TEXAS 77002-6760
ATTN: KEITH R. FULLENWEIDER, ESQ.
(713) 758-2838
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the
same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
================================================================================
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED(1)(2) PRICE(3)(4)(5) REGISTRATION FEE
- -------------------------------------------------------------------------------
Debt Securities(6)
Preferred Stock
Depositary Shares(7)
Common Stock
Securities Warrants
Preferred Securities of Dynegy Capital
Trust II
Trust Debentures(8)
Guarantees of Preferred Securities of
Dynegy Capital Trust II by Dynegy Inc.(9)
Total..................................... $500,000,000 $147,500
===============================================================================
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
(Footnotes on following page)
<PAGE>
(Footnotes from previous page)
(1) Not specified as to each class of securities to be registered pursuant to
General Instruction II(D) to Form S-3.
(2) This registration statement also covers such indeterminate amount of
securities as may be issued in exchange for, or upon conversion or
exercise of, as the case may be, the Debt Securities, Preferred Stock,
Depositary Shares or Securities Warrants registered hereunder. Any
securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
(4) No separate consideration will be received for any securities registered
hereunder that are issued in exchange for, or upon conversion of, as the
case may be, the Debt Securities, Preferred Stock or Depositary Shares
registered hereunder.
(5) The proposed maximum offering price per unit will be determined from time
to time by the registrant in connection with, and at the time of, the
issuance by the registrant of the securities registered hereunder.
(6) The aggregate principal amount of the Debt Securities may be increased if
any Debt Securities are issued at an original issue discount by an amount
such that the gross proceeds to be received by Dynegy Inc. shall be equal
to the above amount to be registered. Any offering of Debt Securities
denominated other than in U.S. dollars will be treated as the equivalent
of U.S. dollars based on the exchange rate applicable to the purchase of
such Debt Securities at the time of initial offering.
(7) Such indeterminate number of Depositary Shares to be evidenced by
Depositary Receipts issued pursuant to a Deposit Agreement. In the event
that Dynegy Inc. elects to offer to the public fractional interests in
shares of the Preferred Stock registered hereunder, Depositary Receipts
will be distributed to those persons purchasing such fractional interests
and such shares will be issued to the Depositary under the Deposit
Agreement.
(8) The Trust Debentures of Dynegy Inc. will be purchased by Dynegy Capital
Trust II with the proceeds from the sale of the Preferred Securities of
Dynegy Capital Trust II.
(9) No separate consideration will be received for the Guarantee or back-up
undertakings of Dynegy Inc. Includes the rights of holders of the
Preferred Securities under such Guarantee and back-up undertakings,
consisting of obligations of Dynegy Inc. as set forth in the Trust
Agreement of Dynegy Capital Trust II (including the obligation to pay
expenses of Dynegy Capital Trust II) and the Indenture governing the Trust
Debentures of Dynegy Inc., in each case as further described in the
Registration Statement.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JULY 30, 1998
PROSPECTUS
DYNEGY INC.
[LOGO OF DYNEGY INC.
APPEARS HERE] DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
SECURITIES WARRANTS
TRUST DEBENTURES
DYNEGY CAPITAL TRUST II
PREFERRED SECURITIES
GUARANTEED AS SET FORTH HEREIN BY
DYNEGY INC.
------------
Dynegy Inc. ("Dynegy" or the "Company") may offer and sell, from time to
time, (i) unsecured debt securities, in one or more series, consisting of
notes, debentures or other evidences of indebtedness (the "Debt Securities"),
(ii) shares of preferred stock, par value $0.01 per share, in one or more
series (the "Preferred Stock"), which may be issued in the form of depositary
shares evidenced by depositary receipts (the "Depositary Shares"), (iii) shares
of common stock, par value $0.01 per share (the "Common Stock"), (iv)
Securities Warrants ("Securities Warrants") to purchase Debt Securities,
Preferred Stock, Depositary Shares or Common Stock, and (v) in addition to the
Debt Securities, debentures (the "Trust Debentures") to be purchased by Dynegy
Capital Trust II, a statutory business trust created under the laws of the
State of Delaware (the "Trust") with the proceeds from the sale by the Trust of
preferred securities ("Preferred Securities") representing undivided beneficial
ownership interests in the assets of the Trust and (vi) a guaranty by the
Company of the Preferred Securities (the "Guarantee"). The Trust may offer its
Preferred Securities. The aggregate initial offering price of all of the Debt
Securities, Preferred Stock, Depositary Shares, Common Stock, Securities
Warrants and Preferred Securities (excluding the aggregate initial offering
price of the Trust Debentures) (collectively, including the Trust Debentures
and the Guarantee, the "Securities") which may be sold pursuant to this
Prospectus will not exceed $500,000,000 or, if applicable, the equivalent
thereof in any other currency.
The specific terms of the particular Securities to be issued, to the extent
such terms are not provided for in this Prospectus or to the extent that such
terms are inconsistent with the terms set forth in this Prospectus, will be set
forth in a supplement to this Prospectus (a "Prospectus Supplement"), which
will be delivered together with this Prospectus, including, as applicable, (i)
in the case of Debt Securities or Trust Debentures, the specific designation,
aggregate principal amount, ranking as senior or subordinated Debt Securities,
maturity, rate or rates (or method of determining the same) and time or times
for the payment of interest, if any, any exchangeability or conversion terms or
any terms for optional or mandatory redemption or repurchase, or payment of
additional amounts or any sinking fund provisions, (ii) in the case of
Preferred Stock, the specific designation, number of shares and liquidation
value thereof and the dividend, liquidation, redemption, voting and other
rights, including conversion or exchange rights, if any, and any other special
terms, as well as whether interests in the Preferred Stock will be represented
by Depositary Shares, (iii) in the case of Common Stock, the number of shares,
(iv) in the case of Securities Warrants, the number and terms thereof, the
designation and number or amount of Securities issuable upon their exercise,
the exercise price, the terms of the offering and sale thereof and, where
applicable, the duration and detachability thereof and (v) in the case of
Preferred Securities, the specific title, aggregate amount, stated liquidation
preference, number of securities, the rate of payment of periodic distributions
or method of calculating such rate, applicable extension period or distribution
deferral terms, if any, and any terms of redemption. The Prospectus Supplement
will also contain information regarding the initial public offering price, the
net proceeds to the Company and, where applicable, the United States Federal
income tax considerations relating to the Securities covered by the Prospectus
Supplement.
The Securities may be sold directly by the Company, or in the case of the
Preferred Securities, the Trust, to investors, through agents designated from
time to time or to or through underwriters or dealers. See "Plan of
Distribution." If any agents of the Company, or in the case of the Preferred
Securities, the Trust, or any underwriters are involved in the sale of any
Securities in respect of which this Prospectus is being delivered, the names of
such agents or underwriters and any applicable commissions or discounts will be
set forth in a Prospectus Supplement.
The Common Stock is listed on the New York Stock Exchange under the symbol
"DYN." Any Common Stock sold pursuant to a Prospectus Supplement will be listed
on such exchange, subject to official notice of issuance. The Prospectus
Supplement will state whether any other Securities offered thereby will be
listed on a securities exchange.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF THE SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
, 1998
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549; and at the regional offices of the
Commission at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and at 7 World Trade Center, New York, New York 10048. Copies
of such material may be obtained by mail from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains an Internet web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission (http://www.sec.gov).
The Common Stock of the Company is listed on the New York Stock Exchange.
Reports, proxy statements and other information concerning the Company can be
inspected and copied at the office of the New York Stock Exchange at 20 Broad
Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Securities offered hereby.
This Prospectus does not contain all of the information set forth in such
Registration Statement. Reference is made to such Registration Statement and
to the exhibits thereto for further information with respect to the Company
and the Securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's (i) Annual Report on Form 10-K for the year ended December 31,
1997, (ii) Quarterly Report on Form 10-Q for the quarter ended March 31, 1998,
(iii) Current Reports on Form 8-K dated April 29, 1998 and May 20, 1998, and
(iv) the description of the common stock contained in the Registration
Statement on Form 8-A as filed with the Commission on March 14, 1995 are each
hereby incorporated by reference herein.
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities
shall be deemed to be incorporated herein by reference and to be a part hereof
from their respective dates of filing. Any statement contained herein or in a
document, all or a portion of which is incorporated or deemed to be
incorporated by reference herein, shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein or in the Prospectus Supplement
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the written or oral request of any such person, a copy of any
and all of the documents referred to above which have been incorporated in
this Prospectus by reference, other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents.
Requests for such copies should be directed to Dynegy Inc., 1000 Louisiana,
Suite 5800, Houston, Texas 77002, Attention: Investor Relations; (713) 507-
6400.
2
<PAGE>
UNCERTAINTY OF FORWARD-LOOKING STATEMENTS
This Prospectus, including any documents that are incorporated by reference
as set forth in "Incorporation of Certain Documents by Reference," contains
various forward-looking statements and information that are based on
management's beliefs as well as assumptions made by and information currently
available to management. When used in this document, words such as
"anticipate", "estimate", "project", and "expect" are intended to identify
forward-looking statements. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
Such statements are subject to certain risks, uncertainties and assumptions.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially
from those anticipated, estimated, projected or expected. Among the key risk
factors that may have a direct bearing on Dynegy's results of operations and
financial condition are: (i) competitive practices in the industries in which
Dynegy competes, (ii) fluctuations in energy commodity prices which have not
been properly hedged or which are inconsistent with Dynegy's open position in
its energy marketing activities, (iii) operational and systems risks, (iv)
environmental liabilities which are not covered by indemnity or insurance, and
(v) the impact of current and future laws and governmental regulations
(particularly environmental regulations) affecting the energy industry in
general and Dynegy's operations in particular.
3
<PAGE>
THE COMPANY
Dynegy Inc. (NYSE:DYN) is one of the leading marketers of energy products
and services in North America. Dynegy holds a leadership position in the
marketing of natural gas, natural gas liquids and electricity. Dynegy is also
a leading natural gas gatherer, processor and transporter through direct and
indirect ownership and operation of natural gas processing plants,
fractionators, storage facilities and pipelines. These activities combined
with a substantial independent power generation business, enable the company
to offer energy solutions to customers in North America, Australia, the UK and
Colombia.
The Company is a holding company that conducts substantially all of its
business through its subsidiaries. From inception of operations in 1984 until
1990, Natural Gas Clearinghouse ("Clearinghouse") limited its activities
primarily to natural gas marketing. Starting in 1990, Clearinghouse began
expanding its core business operations through acquisitions and strategic
alliances with certain of its shareholders resulting in the formation of a
midstream energy asset business and establishing energy marketing operations
in both Canada and the United Kingdom. Effective March 1, 1995, Clearinghouse
and Trident NGL Holding, Inc., a fully integrated natural gas liquids company,
merged ("Trident Combination"). On August 31, 1996, the Company completed a
strategic combination with Chevron U.S.A. Inc. and certain Chevron affiliates
(collectively "Chevron") whereby substantially all of Chevron's midstream
assets were merged with the Company ("Chevron Combination"). In June 1997, the
Company acquired Destec Energy, Inc., a leading independent power producer,
now named Dynegy Power Corp.
On July 6, 1998, Dynegy changed its name from NGC Corporation to be
representative of the full range of energy products and services offered by
the Company.
Through the growth of the Company's core marketing businesses combined with
the assets and services of the merged companies, Dynegy has established itself
as a market leader in natural gas, natural gas liquids, power generation and
energy marketing.
BG plc, Chevron and NOVA Corporation each own approximately 25.4% of the
outstanding common stock of Dynegy.
The principal executive office of the Company is located at 1000 Louisiana,
Suite 5800, Houston, Texas 77002, and the telephone number of that office is
(713) 507-6400. Dynegy and its affiliates maintain marketing and/or regional
offices in Atlanta, Georgia; Bogata, Colombia; Boston, Massachusetts;
Brisbane, Australia; Calgary, Alberta; Chicago, Illinois; Dallas, Texas;
Englewood, Colorado; London, England; Mexico City, Mexico; Midland, Texas;
Oklahoma City, Oklahoma; Pleasanton, California; Pittsburgh, Pennsylvania;
Tampa, Florida; Tulsa, Oklahoma; and Washington, D.C.
THE TRUST
The Trust is a statutory business trust created under Delaware law pursuant
to (i) a declaration of trust, dated as of July 15, 1998, and entered into by
the Company, as sponsor, and the trustees named therein, and (ii) the filing
of a certificate of trust with the Delaware Secretary of State on July 15,
1998. The declaration will be amended and restated in its entirety (as so
amended and restated, the "Trust Agreement"), substantially in the form filed
as an exhibit to the Registration Statement of which this Prospectus forms a
part, as of the date the Preferred Securities of such Trust are initially
issued. The Trust Agreement will be qualified under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). The Trust exists for the
exclusive purposes of (i) issuing and selling the Preferred Securities and
Common Securities, (ii) using the proceeds from the sale of the Preferred
Securities and Common Securities to acquire the Trust Debentures, and (iii)
engaging in only those other activities necessary or incidental thereto. The
Trust Debentures will be the sole assets of the Trust, and, accordingly,
payments under the Trust Debentures will be the sole revenues of the Trust.
The Trust has a term of 35 years, but may dissolve earlier as provided in the
Trust Agreement.
Dynegy will directly or indirectly acquire all of the Common Securities,
which will have an aggregate liquidation amount equal to 3% of the total
capital of the Trust. The Common Securities will rank pari passu, and payments
will be made thereon pro rata, with the Preferred Securities, except that upon
the occurrence and
4
<PAGE>
continuance of a Debenture Event of Default, the rights of the holders of the
Common Securities to payments in respect of Distributions and payments upon
liquidation, redemption or otherwise will be subordinated to the rights of the
holders of the Preferred Securities. See "Description of Preferred
Securities--Subordination of Common Securities."
The Trust's business and affairs will be conducted by its trustees, as set
forth in the Trust Agreement. At the time of the issuance of the Preferred
Securities, the trustees for the Trust will be initially The First National
Bank of Chicago, as the Property Trustee (the "Property Trustee"), First
Chicago Delaware Inc., as the Delaware Trustee (the "Delaware Trustee"), and
three individual trustees (the "Administrative Trustees") who are officers of
the Company (collectively, the "Issuer Trustees"). The First National Bank of
Chicago, as Property Trustee, will act as sole indenture trustee under the
Trust Agreement. The First National Bank of Chicago also will act as indenture
trustee under the Guarantee and the Debenture Indenture. See "Description of
Guarantee" and "Description of Trust Debentures." The holder of the Common
Securities of the Trust or, if an Event of Default under the Trust Agreement
("Trust Indenture Event of Default") has occurred and is continuing, the
holders of not less than a majority in Liquidation Amount of the Preferred
Securities, will be entitled to appoint, remove or replace the Property
Trustee and/or the Delaware Trustee. In no event will the holders of the
Preferred Securities have the right to vote to appoint, remove or replace the
Administrative Trustees; such voting rights will be vested exclusively in the
holder of the Common Securities. The duties and obligations of each Issuer
Trustee will be governed by the Trust Agreement.
For so long as the Preferred Securities remain outstanding, the Company
covenants (i) to maintain directly or indirectly 100% ownership of the Common
Securities, (ii) to use its reasonable efforts to cause the Trust to remain a
statutory business trust and not to voluntarily dissolve, wind-up, liquidate
or be terminated, except as permitted by the Trust Agreement, (iii) to use its
reasonable efforts to ensure that the Trust will not be an "investment
company" for purposes of the Investment Company Act, (iv) to use its
reasonable efforts to cause the Trust to continue to be treated as a grantor
trust and not an association taxable as a corporation for United States
federal income tax purposes and (v) to use its reasonable efforts to cause
each holder of Trust Securities to be treated as owning an undivided
beneficial interest in the Trust Debentures.
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the Trust
Agreement and the Delaware Business Trust Act (the "Trust Act"). The location
of the principal executive office of the Trust is c/o Dynegy Inc., 1000
Louisiana, Suite 5800, Houston, Texas 77002, and its telephone number is 713-
507-6400.
5
<PAGE>
USE OF PROCEEDS
Except as may otherwise be described in the Prospectus Supplement relating
to an offering of Securities, the net proceeds from the sale of the Securities
will be used for general corporate purposes. Any allocation of the net
proceeds of an offering of Securities to a specific purpose will be determined
at the time of such offering and will be described in the related Prospectus
Supplement.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratios of earnings
to fixed charges for the periods shown. The computation for each of the years
ended December 31, 1993 through 1994 includes only the consolidated results of
Clearinghouse and its subsidiaries. The computation for 1995 includes the
consolidated results of Clearinghouse and its subsidiaries for the full year,
and of Trident NGL Holding, Inc. and its subsidiaries from March 1, 1995, the
effective date of the Trident Combination.
<TABLE>
<CAPTION>
NATURAL GAS
CLEARINGHOUSE
YEARS ENDED
DYNEGY INC. DECEMBER 31,
----------------------------------------------------- -------------------------
YEARS ENDED DECEMBER
THREE MONTHS 31,
ENDED MARCH 31, ----------------------------------
1998 1997 1996 1995 1994 1993
--------------- ---- ---- ---- ------ ------
<S> <C> <C> <C> <C> <C>
1.35 (a) 4.07 2.48 13.08 19.18
</TABLE>
- --------
(a) Earnings were inadequate to cover fixed charges for the year ended
December 31, 1997, by approximately $72.9 million.
For purposes of calculating the ratio of earnings to fixed charges, earnings
consist of income before income taxes and fixed charges (excluding capitalized
interest and depreciation of interest previously capitalized) less
undistributed income from equity investees. Fixed charges consist of (i) the
Company's interest expense, (ii) amortization of deferred financing costs,
(iii) interest capitalized during the year and (iv) the portion of the
Company's lease rental expense representative of the interest factor
attributable to such leases.
A statement setting forth the computation of the ratios of earnings to fixed
charges is filed as an exhibit to the Company's Annual Report on Form 10-K for
the year ended December 31, 1997.
6
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will constitute either senior or subordinated debt of
the Company and will be issued, in the case of Debt Securities that will be
senior debt ("Senior Debt Securities"), under an Indenture dated as of
September 26, 1996, as amended and restated as of March 23, 1998 (the "Senior
Debt Indenture"), between the Company, as issuer, and The First National Bank
of Chicago, as trustee, and, in the case of Debt Securities that will be
subordinated debt ("Subordinated Debt Securities"), under a Subordinated
Indenture dated as of July 17, 1998 (the "Subordinated Debt Indenture"),
between the Company, as issuer, and The First National Bank of Chicago, as
trustee. The Senior Debt Indenture and the Subordinated Debt Indenture are
sometimes hereinafter referred to individually as the "Debt Indenture" and
collectively as the "Debt Indentures." First National Bank of Chicago (and any
successor thereto as trustee under the Debt Indentures) is hereinafter
referred to as the "Debt Trustee." The statements under this caption are
summaries of certain provisions of the Debt Indentures. Wherever particular
Sections of the Debt Indentures or terms not defined herein that are defined
in the Debt Indentures are referred to herein or in a Prospectus Supplement,
it is intended that such Sections or defined terms shall be incorporated by
reference herein or therein, as the case may be. The Debt Indentures are
substantially identical, except for certain covenants of the Company and
provisions relating to subordination and conversion.
The Debt Securities may be issued from time to time in one or more series.
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities of all series. The particular
terms of each series of Debt Securities offered by any Prospectus Supplement
(the "Offered Debt Securities") will be described therein.
The Company's Trust Debentures are separately described in this Prospectus
under the caption "Description of the Trust Debentures."
PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED DEBT SECURITIES
General. The Debt Securities will be unsecured senior or subordinated
obligations of the Company and may be issued from time to time in one or more
series. The Debt Indentures do not limit the amount of Debt Securities,
debentures, notes or other types of indebtedness that may be issued by the
Company or any of its subsidiaries nor do they restrict transactions between
the Company and its affiliates or the payment of dividends or other
distributions by the Company to its stockholders. In addition, other than as
may be set forth in any Prospectus Supplement and, in the case of the Senior
Debt Indenture, other than as set forth under "--Limitation on Liens," the
Debt Indentures do not and the Debt Securities will not contain any covenants
or other provisions that are intended to afford holders of the Debt Securities
special protection in the event of either a change of control of the Company
or a highly leveraged transaction involving the Company.
Reference is made to the Prospectus Supplement for the following terms of
and information relating to the Offered Debt Securities (to the extent such
terms are applicable to such Offered Debt Securities): (i) the title of the
Offered Debt Securities; (ii) classification as either Senior Debt Securities
or Subordinated Debt Securities; (iii) whether the Offered Debt Securities
that constitute Subordinated Debt Securities are convertible into Common Stock
and, if so, the terms and conditions upon which such conversion will be
effected including the initial conversion price or conversion rate (the
"Conversion Price") and any adjustments thereto in addition to or different
from those described herein, the conversion period and other conversion
provisions in addition to or in lieu of those described herein; (iv) any limit
on the aggregate principal amount of the Offered Debt Securities; (v) whether
the Offered Debt Securities are to be issuable as Registered Securities or
Bearer Securities or both, whether any of the Offered Debt Securities are to
be issuable initially in temporary global form and whether any of the Offered
Debt Securities are to be in permanent global form; (vi) the price or prices
(expressed as a percentage of the aggregate principal amount thereof) at which
the Offered Debt Securities will be issued; (vii) the date or dates on which
the Offered Debt Securities will mature; (viii) the rate or rates per annum
(or the method by which such will be determined) at which the Offered Debt
Securities will bear interest, if any, and the date from which any such
interest will accrue and whether, and under what circumstances, additional
amounts with respect to such Debt Securities shall be payable; (ix) the
Interest Payment Dates on which any such interest
7
<PAGE>
on the Offered Debt Securities will be payable, the Regular Record Date for
any interest payable on any Offered Debt Securities which are Registered
Securities on any Interest Payment Date and the extent to which, or the manner
in which, any interest payable on a temporary global Offered Debt Security on
an Interest Payment Date will be paid; (x) any mandatory or optional sinking
fund or analogous provisions; (xi) each office or agency where, subject to the
terms of the Debt Indentures as described below under "Payment and Paying
Agents", the principal of and any premium and interest on the Offered Debt
Securities will be payable and each office or agency where, subject to the
terms of the Debt Indentures as described below under "--Form, Exchange,
Registration and Transfer", the Offered Debt Securities may be presented for
registration of transfer or exchange; (xii) the right of the Company to redeem
the Offered Debt Securities at its option and the period or periods, if any,
within which and the price or prices at which the Offered Debt Securities may,
pursuant to any optional or mandatory redemption provisions, be redeemed, in
whole or in part, and the other detailed terms and provisions of any such
optional or mandatory redemption; (xiii) the denominations in which any
Offered Debt Securities which are Registered Securities will be issuable, if
other than denominations of $1,000 and any integral multiple thereof, and the
denomination or denominations in which any Offered Debt Securities which are
Bearer Securities will be issuable, if other than the denomination of $5,000;
(xiv) the currency or currencies (including composite currencies) in which
payment of principal of and any premium and interest on the Offered Debt
Securities is payable; (xv) any index used to determine the amount of payments
of principal of and any premium and interest on the Offered Debt Securities;
(xvi) information with respect to book-entry procedures, if any; and (xvii)
any other terms of the Offered Debt Securities not inconsistent with the
provisions of the Debt Indentures. (Section 301) Any such Prospectus
Supplement will also describe any special provisions for payment of additional
amounts with respect to the Offered Securities.
Debt Securities may be issued as Original Issue Discount Securities. An
Original Issue Discount Security is a Debt Security, including any Zero-Coupon
Security, which is issued at a price lower than the amount payable upon the
Stated Maturity thereof and which provides that upon redemption or
acceleration of the maturity thereof, an amount less than the amount payable
upon the Stated Maturity thereof and determined in accordance with the terms
of such Debt Security shall become due and payable. Special United States
federal income tax considerations applicable to Debt Securities issued at an
original issue discount, including Original Issue Discount Securities, and
special United States tax considerations and other terms and restrictions
applicable to any Debt Securities issued in bearer form, offered exclusively
to United States Aliens or denominated in other than United States dollars,
will be set forth in a Prospectus Supplement relating thereto.
The Debt Securities will be general unsecured obligations of the Company.
The Company is a holding company, conducting all of its business through
subsidiaries. Accordingly, the ability of the Company to meet its obligations
under the Debt Indentures and the Debt Securities will be dependent on the
earnings and cash flows of its subsidiaries and the ability of its
subsidiaries to pay dividends or to advance funds to the Company.
Form, Exchange, Registration and Transfer. Debt Securities of a series may
be issuable in definitive form solely as Registered Securities, solely as
Bearer Securities or as both Registered Securities and Bearer Securities.
Unless otherwise indicated in an applicable Prospectus Supplement, Bearer
Securities will have interest coupons attached. (Section 201) The Debt
Indentures also will provide that Debt Securities of a series may be issuable
in temporary or permanent global form. (Section 201)
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor. In addition, if Debt
Securities of any series are issuable as both Registered Securities and Bearer
Securities, at the option of the Holder upon request confirmed in writing, and
subject to the terms of the applicable Debt Indenture, Bearer Securities (with
all unmatured coupons, except as provided below, and all matured coupons in
default) of such series will be exchangeable for Registered Securities of the
same series of any authorized denominations and of a like aggregate principal
amount and tenor. Bearer Securities surrendered in exchange for Registered
Securities between a Regular Record Date or a Special Record Date and the
relevant date for payment of interest shall be surrendered without the coupon,
relating to such date for payment of interest, and interest accrued as of such
8
<PAGE>
date will not be payable in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holders of
such coupon, when due in accordance with the terms of the applicable Debt
Indenture. Bearer Securities will not be issued in exchange for Registered
Securities. (Section 305)
Debt Securities may be presented for exchange as provided above, and
Registered Securities may be presented for registration or transfer (with the
form of transfer endorsed thereon duly executed) at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose with respect to any series of Debt Securities and referred to in
an applicable Prospectus Supplement, without service charge and upon payment
of any taxes and other governmental charges as described in the Debt
Indentures. Such transfer or exchange will be effected upon the Security
Registrar or any such transfer agent, as the case may be, being satisfied with
the documents of title and identity of the person making the request. The
Company has appointed the Debt Trustee as Security Registrar. (Section 305) If
a Prospectus Supplement refers to any transfer agent (in addition to the
Security Registrar) initially designated by the Company with respect to any
series of Debt Securities, the Company may at any time rescind the designation
of any such transfer agent or approve a change in the location through which
any such transfer agent act, except that, if Debt Securities of a series are
issuable solely as Registered Securities, the Company will be required to
maintain a transfer agent in each Place of Payment for such series and, if
Debt Securities of a series are issuable as Bearer Securities, the Company
will be required to maintain (in addition to the Security Registrar) a
transfer agent in a Place of Payment for such series located outside the
United States. The Company may at any time designate additional transfer
agents with respect to any series of Debt Securities. (Section 1002)
In the event of any redemption in part, the Company shall not be required to
(i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days prior to the
selection of Debt Securities of that series for redemption and ending on the
close of business on (A) if Debt Securities of the series are issuable only as
Registered Securities, the day of mailing of the relevant notice of redemption
and (B) if Debt Securities of the series are issuable as Bearer Securities,
the day of the first publication of the relevant notice of redemption or, if
Debt Securities of the series are also issuable as Registered Securities and
there is no publication, the mailing of the relevant notice of redemption;
(ii) register the transfer or exchange of any Registered Security, or portion
thereof, called for redemption, except the unredeemed portion of any
Registered Security being redeemed in part; or (iii) exchange any Bearer
Security called for redemption, except to exchange such Bearer Security for a
Registered Security of that series and like tenor which is immediately
surrendered for redemption. (Section 305)
Payment and Paying Agents. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of principal of, and any premium and interest
on, Bearer Securities will be payable, subject to any applicable laws and
regulations, at the offices of such Paying Agents outside the United States as
the Company may designate from time to time, in the manner indicated in such
Prospectus Supplement. (Section 1002) Unless otherwise indicated in an
applicable Prospectus Supplement, payment of interest on Bearer Securities on
any Interest Payment Date will be made only against surrender to the Paying
Agent of the coupon relating to such Interest Payment Date. (Section 1001) No
payment with respect to any Bearer Security will be made at any office or
agency of the Company in the United States or by check mailed to any address
in the United States or by transfer to an account maintained with a bank
located in the United States. Notwithstanding the foregoing, payments of
principal of, and any premium and interest on, Bearer Securities denominated
and payable in U.S. dollars will be made at the offices of the Company's
Paying Agent in the Borough of Manhattan, the City of New York, if (but only
if) payment of the full amount thereof in U.S. dollars at all offices or
agencies outside the United States is illegal or effectively precluded by
exchange controls or other similar restrictions. (Section 1002)
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of, and any premium and interest on, Registered Securities will
be made at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time, except that at the option of the Company payment
of any interest may be made by check mailed on or before the due date to the
address of the Person entitled thereto as such address shall appear in the
Security Register. (Sections 307, 1002) Unless otherwise indicated in an
9
<PAGE>
applicable Prospectus Supplement, payment of any installment of interest on
Registered Securities will be made to the Person in whose name such Registered
Security is registered at the close of business on the Regular Record Date for
such interest. (Section 307)
Unless otherwise indicated in an applicable Prospectus Supplement, the Debt
Trustee at its Corporate Trust Office will be designated as a Paying Agent for
the Company for payments with respect to Debt Securities which are issuable
solely as Registered Securities, and the Company will maintain a Paying Agent
outside the United States for payments with respect to Debt Securities
(subject to the limitations described above in the case of Bearer Securities)
which are issuable solely as Bearer Securities or as both Registered
Securities and Bearer Securities. Any Paying Agents outside the United States
and any other Paying Agents in the United States initially designated by the
Company for the Debt Securities will be named in an applicable Prospectus
Supplement. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent or approve a change in the office
through which any Paying Agent acts, except that, if Debt Securities of a
series are issuable solely as Registered Securities, the Company will be
required to maintain a Paying Agent in each Place of Payment for such series
and, if Debt Securities of a series are issuable as Bearer Securities, the
Company will be required to maintain (i) a Paying Agent in the Borough of
Manhattan, the City of New York, for principal payments with respect to any
Registered Securities of the series (and for payments with respect to Bearer
Securities of the series in the circumstances described above, but not
otherwise), and (ii) a Paying Agent in a Place of Payment located outside the
United States where Debt Securities of such series and any coupons
appertaining thereto may be presented and surrendered for payment. (Section
1002)
All monies paid by the Company to a Paying Agent for the payment of
principal of or any premium or interest on any Debt Security which remain
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will (subject to applicable escheat laws) be
repaid to the Company, and the Holder of such Debt Security or any coupon will
thereafter look only to the Company for payment thereof. (Section 1003)
Global Debt Securities. Debt Securities of a series may be issued in whole
or in part in the form of one or more global Debt Securities that will be
deposited with, or on behalf of, a depository identified in the Prospectus
Supplement relating to such series. Global Debt Securities may be issued in
either registered or bearer form and in either temporary or permanent form.
(Section 203) Unless and until it is exchanged in whole or in part for the
individual Debt Securities represented thereby, a global Debt Security may not
be transferred except as a whole by the depository for such global Debt
Security to a nominee of such depository or by a nominee of such depository to
such depository or another nominee of such depository or by the depository or
any nominee to a successor depository or any nominee of such successor.
The specific terms of the depository arrangement with respect to a series of
Debt Securities and certain limitations and restrictions relating to a series
of Bearer Securities in the form of one or more global Debt Securities will be
described in the Prospectus Supplement relating to such series.
Events of Default. Any one of the following events will constitute an Event
of Default under either Debt Indenture with respect to Debt Securities of any
series issued under such Debt Indenture: (a) failure to pay any interest on
any Debt Security of that series when due, continued for 30 days; (b) failure
to pay principal of or any premium on any Debt Security of that series when
due; (c) failure to deposit any sinking fund payment, when due, in respect of
any Debt Security of that series; (d) failure to perform any other covenant of
the Company in such Debt Indenture (other than a covenant included in such
Debt Indenture solely for the benefit of series of Debt Securities other than
that series), continued for 90 days after written notice as provided in such
Debt Indenture; (e) certain events in bankruptcy, insolvency or reorganization
involving the Company; and (f) any other Event of Default provided with
respect to Debt Securities of that series. (Section 501)
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, either the Debt Trustee or the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of that series, by notice as provided in the applicable Debt
Indenture, may declare the
10
<PAGE>
principal amount (or, if the Debt Securities of that series are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of that series) of all the Debt Securities of that series to be
due and payable immediately. At any time after a declaration of acceleration
with respect to Debt Securities of any series has been made, but before a
judgment or decree for payment of money has been obtained by the Debt Trustee,
the Holders of a majority in aggregate principal amount of the Outstanding
Securities of that series may, under certain circumstances, rescind and annul
such acceleration. (Section 502)
Each Debt Indenture provides that, subject to the duty of the Debt Trustee
during default to act with the required standard of care, the Debt Trustee
will be under no obligation to exercise any of its rights or powers under such
Debt Indenture at the request or direction of any of the Holders, unless such
Holders shall have offered to the Debt Trustee reasonable indemnity. (Section
601, 603) Subject to such provisions for the indemnification of the Debt
Trustee, the Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Debt Trustee, or exercising any trust or power conferred on the Debt Trustee,
with respect to the Debt Securities of that series; provided, however, that
the Debt Trustee shall not be obligated to take any action unduly prejudicial
to Holders not joining in such direction or involving the Debt Trustee in
personal liability. (Section 512)
The Company will be required to furnish to the Debt Trustee annually a
statement as to the performance by the Company of its obligations under each
Debt Indenture and as to any default in such performance. (Section 1007)
Defeasance. If so specified with respect to any particular series of Debt
Securities issued under either Debt Indenture, the Company may discharge its
indebtedness and its obligations or certain of its obligations under such Debt
Indenture with respect to such series by depositing funds or obligations
issued or guaranteed by the United States of America with the Debt Trustee
(Sections 1301-1303).
Defeasance and Discharge. Each Debt Indenture provides that, if so specified
with respect to the Debt Securities of any series issued under such Debt
Indenture, the Company will be discharged from any and all obligations in
respect of the Debt Securities of such series (except for certain obligations
relating to temporary Debt Securities and exchange of Debt Securities,
registration of transfer or exchange of Debt Securities of such series,
replacement of stolen, lost or mutilated Debt Securities of such series,
maintenance of paying agencies to hold moneys for payment in trust and
payments of additional amounts, if any, required in consequence of United
States withholding taxes imposed on payments to non-United States persons)
upon the deposit with the Debt Trustee, in trust, of money and/or U.S.
Government Obligations which, through the payment of interest and principal in
respect thereof in accordance with their terms, will provide money in an
amount sufficient to pay the principal of (and premium, if any), and each
installment of interest on, the Debt Securities of such series on the Stated
Maturity of such payments in accordance with the terms of the applicable Debt
Indenture and the Debt Securities of such series. (Sections 1302 and 1304)
Such a trust may only be established if, among other things, the Company has
delivered to the Debt Trustee an Opinion of Counsel to the effect that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of the Indenture there has
been a change in applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that the
Holders of the Debt Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge, and will be subject to federal income tax on the same amounts and
in the same manner and at the same times as would have been the case if such
deposit, defeasance and discharge had not occurred. (Section 1304) In the
event of any such defeasance and discharge of Debt Securities of such series,
Holders of Debt Securities of such series would be entitled to look only to
such trust fund for payment of principal of and any premium and any interest
on their Debt Securities until Maturity.
Defeasance of Certain Obligations. Each Debt Indenture provides that, if so
specified with respect to the Debt Securities of any series issued thereunder,
the Company may omit to comply with certain restrictive covenants, including
(in the case of the Senior Debt Indenture) the covenant described under "--
Limitation on
11
<PAGE>
Liens" below, but excluding (in the case of the Subordinated Debt Indenture)
any applicable obligation of the Company respecting the conversion of Debt
Securities of such series into Common Stock, and any such omission shall not
be an Event of Default with respect to the Debt Securities of such series,
upon the deposit with the Debt Trustee, in trust, of money and/or U.S.
Government Obligations, which through the payment of interest and principal in
respect thereof in accordance with their terms, will provide money in an
amount sufficient to pay the principal of (and premium, if any), and each
installment of interest on, the Debt Securities of such series on the Stated
Maturity of such payments in accordance with the terms of such Debt Indenture
and the Debt Securities of such series. The obligations of the Company under
such Debt Indenture and the Debt Securities of such series other than with
respect to such covenants shall remain in full force and effect. (Section
1303) Such a trust may be established only if, among other things, the Company
has delivered to the Debt Trustee an Opinion of Counsel to the effect that the
Holders of the Debt Securities of such series will not recognize income, gain
or loss for federal income tax purposes as a result of such deposit and
defeasance of certain obligations, and will be subject to federal income tax
on the same amounts and in the same manner and at the same times as would have
been the case if such deposit and defeasance had not occurred. (Section 1304)
Although the amount of money and U.S. Government Obligations on deposit with
the Debt Trustee would be intended to be sufficient to pay amounts due on the
Debt Securities of such series at the time of their Stated Maturity, in the
event the Company exercises its option to omit compliance with the covenants
defeased with respect to the Debt Securities of any series as described above
and the Debt Securities of such series are declared due and payable because of
the occurrence of any Event of Default, such amount may not be sufficient to
pay amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. The Company shall in any
event remain liable for such payments as provided in the applicable Debt
Indenture.
Federal Income Tax Consequences Relating to Defeasance and Covenant
Defeasance. Under current United States federal income tax law, defeasance and
discharge would likely be treated as a taxable exchange of Debt Securities to
be defeased for an interest in the defeasance trust. As a consequence, a
holder would recognize gain or loss equal to the difference between the
holder's cost or other tax basis for such Debt Securities and the value of the
holder's interest in the defeasance trust, and thereafter would be required to
include in income a share of the income, gain or loss of the defeasance trust.
Under current United States federal income tax law, covenant defeasance would
ordinarily not be treated as a taxable exchange of such Debt Securities.
Modification and Waiver. Modifications and amendments of either Debt
Indenture may be made by the Company and the Debt Trustee with the consent of
the Holders of a majority in aggregate principal amount of the Outstanding
Securities of each series affected by such modification or amendment;
provided, however, that no such modification or amendment may, without consent
of the Holder of each Outstanding Security affected thereby, (a) change the
Stated Maturity of the principal of, or any installment of principal of or
interest on, any Debt Security; (b) change the Redemption Date with respect to
any Debt Security; (c) reduce the principal amount of, or premium or interest
on, any Debt Security; (d) change any obligation of the Company to pay
additional amounts; (e) reduce the amount of principal of an Original Issue
Discount Security payable upon acceleration of the Maturity thereof; (f)
change the coin or currency in which any Debt Security or any premium or
interest thereon is payable; (g) change the redemption right of any Holder;
(h) impair the right to institute suit for the enforcement of any payment on
or with respect to any Debt Security or any conversion right with respect
thereto; (i) reduce the percentage in principal amount of Outstanding
Securities of any series, the consent of whose Holders is required for
modification or amendment of such Debt Indenture or for waiver of compliance
with certain provisions of such Debt Indenture or for waiver of certain
defaults; (j) reduce the requirements contained in such Debt Indenture for
quorum or voting; (k) change any obligation of the Company to maintain an
office or agency in the places and for the purposes required by such Debt
Indenture; (l) adversely affect the right to convert Subordinated Debt
Securities, if applicable; or (m) modify any of the above provisions. (Section
902)
The Subordinated Debt Indenture may not be amended to alter the
subordination of any outstanding Subordinated Debt Securities without the
consent of each holder of Senior Indebtedness (as defined below under
12
<PAGE>
"--Provisions Applicable Solely to Subordinated Debt Securities") then
outstanding that would be adversely affected thereby. (Section 907 of the
Subordinated Debt Indenture)
The Holders of a majority in aggregate principal amount of the Outstanding
Securities of each series may, on behalf of the Holders of all Debt Securities
of that series, waive, insofar as that series is concerned, compliance by the
Company with certain restrictive provisions of the Debt Indenture under which
such series has been issued. (Section 1008) The Holders of a majority in
aggregate principal amount of the Outstanding Securities of each series may,
on behalf of all Holders of Debt Securities of that series, waive any past
default under the applicable Debt Indenture with respect to any Debt
Securities of that series, except a default (a) in the payment of principal
of, or premium, if any, or any interest on any Debt Security of such series or
(b) in respect of a covenant or provision of such Debt Indenture which cannot
be modified or amended without the consent of the Holder of each Outstanding
Security of such series affected. (Section 513)
Each Debt Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any
request, demand, authorization, direction, notice, consent or waiver
thereunder, or are present at a meeting of the Holders of Debt Securities for
quorum purposes, (i) the principal amount of an Original Issue Discount
Security that shall be deemed to be Outstanding shall be the amount of the
principal that would be due and payable as of the date of such determination
upon acceleration of the Maturity thereof, and (ii) the principal amount of a
Debt Security denominated in a foreign currency or currency units shall be the
U.S. dollar equivalent, determined on the date of original issuance of such
Debt Security, of the principal amount of such Debt Security or, in the case
of an Original Issue Discount Security, the U.S. dollar equivalent, determined
on the date of original issuance of such Debt Security, of the amount
determined as provided in clause (i) above. (Section 101)
Each Debt Indenture contains provisions for convening meetings of the
Holders of Debt Securities of a series if Debt Securities of that series are
issuable as Bearer Securities. (Section 1401) A meeting may be called at any
time by the Debt Trustee, and also, upon request by the Company or the Holders
of at least 10% in aggregate principal amount of the Outstanding Securities of
that series, in any such case upon notice given in accordance with the
provisions described under "--Notices" below. (Section 1402) Except for any
consent which must be given by the Holders of each Outstanding Security
affected thereby, as described above, any resolution presented at a meeting
(or adjourned meeting at which a quorum is present) may be adopted by the
affirmative vote of the Holders of a majority in principal amount of the
Outstanding Securities of that series; provided, however, that, except for any
consent or waiver that must be given by the Holder of each Outstanding
Security affected thereby, as described above, any resolution with respect to
any request, demand, authorization, direction, notice, consent, waiver or
other action which may be made, given or taken by the Holders of a specified
percentage, which is less than a majority in principal amount of the
Outstanding Securities of a series, may be adopted at a meeting or adjourned
meeting duly reconvened at which a quorum is present by the affirmative vote
of such specified percentage in aggregate principal amount of the Outstanding
Securities of that series. Any resolution passed or decision taken at any
meeting of Holders of Debt Securities of any series duly held in accordance
with the applicable Debt Indenture will be binding on all Holders of Debt
Securities of that series and related coupons. The quorum at any meeting, and
at any reconvened meeting, will be Persons holding or representing a majority
in aggregate principal amount of the Outstanding Securities of a series.
(Section 1404)
Consolidation, Merger and Sale of Assets. The Company, without the consent
of the Holders of any of the Outstanding Securities under either Debt
Indenture, may consolidate with or merge into, or convey, transfer or lease
its properties and assets substantially as an entirety to, any other Person
which is a corporation, partnership or trust organized and validly existing
under the laws of any domestic jurisdiction, provided that any successor
Person assumes the Company's obligations on the Debt Securities and under such
Debt Indenture, that after giving effect to the transaction no Event of
Default shall have occurred and be continuing, and that certain other
conditions are met. (Section 801)
Notices. Except as otherwise provided in the Debt Indentures, notices to
Holders of Bearer Securities will be given by publication at least twice in a
daily newspaper in The City of New York and in such other city or
13
<PAGE>
cities as may be specified in such Bearer Securities. Notices to Holders of
Registered Securities will be given by mail to the addresses of such Holders
as they appear in the Security Register. (Section 106)
Title. Title to any Bearer Securities (including Bearer Securities in
permanent global form) and any coupons appertaining thereto will pass by
delivery. The Company, the Debt Trustee and any agent of the Company or the
Debt Trustee may treat the bearer of any Bearer Security and the bearer of any
coupon and the registered owner of any Registered Security as the owner
thereof (whether or not such Debt Security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes. (Section 308)
Replacement of Securities. Any mutilated Debt Security or a Debt Security
with a mutilated coupon appertaining thereto will be replaced by the Company
at the expense of the Holder upon surrender of such Debt Security to the Debt
Trustee. Debt Securities or coupons that become destroyed, stolen or lost will
be replaced by the Company at the expense of the Holder upon delivery to the
Debt Trustee of the Debt Security and coupons or evidence of destruction, loss
or theft thereof satisfactory to the Company and the Debt Trustee; in the case
of any coupon which becomes destroyed, stolen or lost, such coupon will be
replaced by issuance of a new Debt Security in exchange for the Debt Security
to which such coupon appertains. In the case of a destroyed, lost or stolen
Debt Security or coupon, an indemnity satisfactory to the Debt Trustee and the
Company may be required at the expense of the Holder of such Debt Security or
coupon before a replacement Debt Security will be issued. (Section 306)
Governing Law. The Debt Indentures, the Debt Securities and coupons will be
governed by, and construed in accordance with, the laws of the State of New
York. (Section 113)
Regarding the Trustee. The Company and certain affiliates from time to time
borrow money from, and maintain deposit accounts and conduct certain banking
transactions with, The First National Bank of Chicago in the ordinary course
of their business. The First National Bank of Chicago serves as agent and is a
lender under the Company's bank credit facility.
The Indenture contains certain limitations on the right of the Debt Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize for its own account on certain property received
in respect of any such claim as security or otherwise. (Section 613) The Debt
Trustee will be permitted to engage in certain other transactions; however, if
it acquires any conflicting interest (as described in each Debt Indenture), it
must eliminate such conflict or resign. (Section 608)
PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES
General. Senior Debt Securities will be issued under the Senior Debt
Indenture, and each series will rank pari passu as to the right of payment of
principal and any premium and interest with each other series issued
thereunder and will rank senior to all series of Subordinated Debt Securities
that may be issued.
Certain Definitions. "Funded Indebtedness" means all outstanding
indebtedness (including indebtedness incurred under any revolving credit,
letter of credit or working capital facility) that matures by its terms, or
that is renewable at the option of any obligor thereon to a date, more than
one year after the date on which such indebtedness is originally incurred.
(Section 101)
"Net Tangible Assets" means the total amount of assets appearing on a
consolidated balance sheet of the Company and its Subsidiaries less, without
duplication: (i) total current liabilities (excluding current maturities of
long-term debt and preferred stock); (ii) all reserves for depreciation and
other asset valuation reserves; (iii) all intangible assets such as goodwill,
trademarks, trade names, patents and unamortized debt discount and expense
carried as an asset; and (iv) all appropriate adjustments on account of
minority interests of other Persons holding common stock in any Subsidiary.
(Section 101)
14
<PAGE>
"Principal Property" means any natural gas, natural gas liquids or crude oil
pipeline, distribution system, gathering system, storage facility or
processing plant, except any such property that in the opinion of the Board of
Directors of the Company is not of material importance to the business
conducted by the Company and its consolidated Subsidiaries taken as a whole.
(Section 101)
"Principal Subsidiary" means any Subsidiary which owns a Principal Property.
(Section 101)
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which is owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries,
or by such Person and one or more of its Subsidiaries, or (ii) any partnership
or similar business organization more than 50% of the ownership interests
having ordinary voting power of which shall at the time be so owned. For the
purposes of this definition, "securities having ordinary voting power" means
securities or other equity interests which ordinarily have voting power for
the election of directors, or persons having management power with respect to
the Person, whether at all times or only so long as no senior class of
securities has such voting power by reason of any contingency. (Section 101)
Limitation on Liens. The Senior Debt Indenture provides that the Company
will not, and will not permit any Principal Subsidiary to, issue, assume or
guarantee any indebtedness for money borrowed ("Debt") if such Debt is secured
by a mortgage, pledge, security interest or lien (a "mortgage" or "mortgages")
upon any Principal Property of the Company or any Principal Subsidiary or upon
any shares of stock or indebtedness of any Principal Subsidiary (whether such
Principal Property, shares of stock or indebtedness is now owned or hereafter
acquired) without in any such case effectively providing that the Senior Debt
Securities shall be secured equally and ratably with (or prior to) such Debt,
except that the foregoing restrictions shall not apply to: (a) mortgages on
any property acquired, constructed or improved by the Company or any Principal
Subsidiary after the date of the Senior Debt Indenture which are created
within 180 days after such acquisition (or in the case of property constructed
or improved, after the completion and commencement of commercial operation of
such property, whichever is later) to secure or provide for the payment of the
purchase price or cost thereof; provided that in the case of such construction
or improvement the mortgages shall not apply to any property theretofore owned
by the Company or any Principal Subsidiary other than theretofore unimproved
real property; (b) existing mortgages on property acquired (including
mortgages on any property acquired from a Person which is consolidated with or
merged with or into the Company or a Subsidiary) or mortgages outstanding at
the time any corporation, partnership or trust becomes a Subsidiary that are
not incurred in connection with such entity becoming a Subsidiary; (c)
mortgages in favor of domestic or foreign governmental bodies to secure
advances or other payments pursuant to any contract or statute or to secure
indebtedness incurred to finance the purchase price or cost of constructing or
improving the property subject to such mortgages, including mortgages to
secure Debt of the pollution control or industrial revenue bond type; (d)
mortgages in favor of the Company or any Principal Subsidiary; (e) mortgages
on any Principal Property held, leased or used by the Company or any Principal
Subsidiary in connection with the exploration for, development of or
production of (but not the gathering, processing, transportation or marketing
of) natural gas, oil or other minerals; or (f) any extension, renewal or
replacement (or successive extensions, renewals or replacements), in whole or
in part, of any mortgage referred to in the foregoing clauses (a), (b), (c),
(d) and (e). (Section 1006)
Notwithstanding the foregoing, the Company and any Principal Subsidiary may,
without securing the Senior Debt Securities, issue, assume or guarantee
secured Debt (which would otherwise be subject to the foregoing restrictions)
in an aggregate amount which, together with all other such Debt, does not
exceed 15% of the Net Tangible Assets, as shown on a consolidated balance
sheet, prepared by the Company in accordance with generally accepted
accounting principles, as of a date not more than 90 days prior to the
proposed transaction. (Section 1006)
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES
Subordination. The Subordinated Debt Securities will be subordinate and
junior in right of payment, to the extent set forth in the Subordinated Debt
Indenture, to all Senior Indebtedness (as defined below) of the Company.
(Article Sixteen of the Subordinated Debt Indenture)
15
<PAGE>
"Senior Indebtedness" is defined in Section 101 of the Subordinated Debt
Indenture as Indebtedness (as defined below) of the Company, whether
outstanding on the date of the Subordinated Debt Indenture or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by the Company,
unless the instrument creating or evidencing such Indebtedness provides that
such Indebtedness is not senior or superior, in right of payment, to the
Subordinated Debt Securities or to other Indebtedness which is pari passu
with, or subordinated to, the Subordinated Debt Securities; provided, however,
that in no event shall Senior Indebtedness include (a) Indebtedness of the
Company owed or owing to any Subsidiary of the Company or any officer,
director or employee of the Company or any Subsidiary of the Company except in
respect of deferred compensation in an amount not to exceed $10,000,000 at any
one time, (b) Indebtedness to trade creditors, (c) any liability for taxes
owed or owing by the Company and (d) the Subordinated Debt Securities.
"Indebtedness" is defined in Section 101 of the Subordinated Debt Indenture
as, with respect to any Person, (a) all liabilities and obligations,
contingent or otherwise, of any such Person, (i) in respect of borrowed money
(whether or not the recourse of the lender is to the whole of the assets of
such Person or only to a portion thereof), (ii) evidenced by bonds, notes,
debentures or similar instruments, (iii) representing the balance deferred and
unpaid of the purchase price of any property or services, except such as would
constitute trade payables to trade creditors in the ordinary course of
business, (iv) evidenced by bankers' acceptances or similar instruments issued
or accepted by banks, (v) for the payment of money relating to a Capitalized
Lease Obligation, or (vi) evidenced by a letter of credit or a reimbursement
obligation of such Person with respect to any letter of credit; (b) all net
obligations of such Person under Interest Swap and Hedging Obligations; (c)
all liabilities of others of the kind described in the preceding clause (a) or
(b) that such Person has guaranteed or that is otherwise its legal liability
and all obligations to purchase, redeem or acquire any Capital Stock and (d)
any and all deferrals, renewals, extensions, refinancings, refundings (whether
direct or indirect) of any liability of the kind described in any of the
preceding clause (a), (b) or (c), or this clause (d), whether or not between
or among the same parties.
The Subordinated Debt Indenture provides that no payment may be made by the
Company on account of the principal of or any premium or interest on the
Subordinated Debt Securities, or to acquire any of the Subordinated Debt
Securities (including repurchases of Subordinated Debt Securities at the
option of the Holders) for cash or property (other than Junior Securities), or
on account of any redemption provisions of the Subordinated Debt Securities,
(i) upon the maturity of any Senior Indebtedness of the Company by lapse of
time, acceleration (unless waived) or otherwise, unless and until all
principal of and any premium and interest on such Senior Indebtedness are
first paid in full (or such payment is duly provided for), or (ii) in the
event of default in the payment of any principal of or any premium or interest
on any Senior Indebtedness when it becomes due and payable, whether at stated
maturity or at a date fixed for prepayment or by declaration or otherwise (a
"Payment Default"), unless and until such Payment Default has been cured or
waived or otherwise has ceased to exist. (Section 1601 of the Subordinated
Debt Indenture)
Upon (i) the happening of an event of default (other than a Payment Default)
that permits the holders of Senior Indebtedness or their representative
immediately to accelerate its maturity and (ii) written notice of such event
of default given to the Company and the Trustee by the holders of at least 25%
in the aggregate principal amount outstanding of such Senior Indebtedness or
their representative (a "Payment Notice"), then, unless and until such event
of default has been cured or waived or otherwise has ceased to exist, no
payment (by set off or otherwise) may be made by or on behalf of the Company
on account of the principal of or any premium or interest on the Subordinated
Debt Securities, or to acquire or repurchase any of the Subordinated Debt
Securities for cash or property, or on account of any redemption provisions of
the Subordinated Debt Securities, in any such case other than payments made
with Junior Securities of the Company. Notwithstanding the foregoing, unless
(i) the Senior Indebtedness in respect of which such event of default exists
has been declared due and payable in its entirety within 179 days after the
Payment Notice is delivered as set forth above (the "Payment Blockage
Period"), and (ii) such declaration has not been rescinded or waived, at the
end of the Payment Blockage Period, the Company shall be required to pay all
sums not paid to the Holders of the Subordinated Debt Securities during the
Payment Blockage Period due to the foregoing prohibitions and to resume all
other payments as and when due on the Subordinated Debt Securities. Any number
of Payment Notices may be given; provided, however, that (i) not more than one
Payment Notice shall be given within a period of any 360
16
<PAGE>
consecutive days and (ii) no event of default that existed upon the date of
such Payment Notice or the commencement of such Payment Blockage Period
(whether or not such event of default is on the same issue of Senior
Indebtedness) shall be made the basis for the commencement of any other
Payment Blockage Period. (Section 1601 of the Subordinated Debt Indenture)
Upon any distribution of assets of the Company upon any dissolution, winding
up, liquidation or reorganization of the Company, whether voluntary or
involuntary, in bankruptcy, insolvency, receivership or a similar proceeding
or upon assignment for the benefit of creditors or any marshaling of assets or
liabilities, (i) the holders of all Senior Indebtedness will first be entitled
to receive payment in full (or have such payment duly provided for) before the
Holders are entitled to receive any payment on account of the principal of or
any premium or interest on the Subordinated Debt Securities (other than Junior
Securities) and (ii) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities (other than
Junior Securities) to which the Holders or the Trustee on behalf of the
Holders would be entitled (by set off or otherwise), except for the
subordination provisions contained in the Subordinated Debt Indenture, will be
paid by the liquidating trustee or agent or other Person making such a payment
or distribution directly to the holders of Senior Indebtedness or their
representative to the extent necessary to make payment in full of all such
Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness. (Section
1601 of the Subordinated Debt Indenture)
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company (other than Junior Securities) is
received by the Trustee or the Holders at a time when such payment or
distribution is prohibited by the foregoing provisions, then such payment or
distribution shall be received and held in trust by the Trustee or such
Holders for the benefit of the holders of Senior Indebtedness, and shall be
paid or delivered by the Trustee or such Holders, as the case may be, to the
holders of the Senior Indebtedness remaining unpaid or unprovided for or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness held or represented by
each, for application to the payment of all Senior Indebtedness remaining
unpaid, to the extent necessary to pay or to provide for the payment of all
such Senior Indebtedness in full after giving effect to any concurrent payment
and distribution to the holders of such Senior Indebtedness. (Section 1601 of
the Subordinated Debt Indenture)
No provisions contained in the Subordinated Debt Indenture or the
Subordinated Debt Securities will affect the obligation of the Company, which
is absolute and unconditional, to pay, when due, principal of and any premium
and interest on the Subordinated Debt Securities as and when the same shall
become due and payable. The subordination provisions of the Subordinated Debt
Indenture and the Subordinated Debt Securities will not prevent the occurrence
of any Event of Default under the Subordinated Debt Indenture or limit the
rights of the Trustee or any Holder, subject to the three preceding
paragraphs, to pursue any other rights or remedies with respect to the
Subordinated Debt Securities. (Sections 501 and 1601 of the Subordinated Debt
Indenture)
The Prospectus Supplement respecting any series of Subordinated Debt
Securities will set forth any subordination provisions applicable to such
series in addition to or different from those described above.
By reason of such subordination, in the event of the insolvency of the
Company, Holders of Senior Indebtedness and holders of other obligations of
the Company that are not subordinated to Senior Indebtedness may receive more,
ratably, than Holders of the Subordinated Debt Securities. Such subordination
will not prevent the occurrence of an Event of Default or limit the right of
acceleration in respect of the Subordinated Debt Securities.
Conversion. The Subordinated Debt Indenture may provide for a right of
conversion of Subordinated Debt Securities into Common Stock (or cash in lieu
thereof). (Sections 301 and 1501 of the Subordinated Debt Indenture) The
following provisions will apply to Subordinated Debt Securities that are
convertible Subordinated Debt Securities unless otherwise provided in the
Prospectus Supplement for such Subordinated Debt Securities.
17
<PAGE>
The Holder of any convertible Subordinated Debt Securities will have the
right exercisable at any time prior to the close of business on the second
Business Day prior to their Stated Maturity, unless previously redeemed or
otherwise purchased by the Company, to convert such Subordinated Debt
Securities into shares of Common Stock at the Conversion Price set forth in
the Prospectus Supplement, subject to adjustment. (Section 1502 of the
Subordinated Debt Indenture) The holder of convertible Subordinated Debt
Securities may convert any portion thereof which is $1,000 in principal amount
of any integral multiple thereof. (Section 1502 of the Subordinated Debt
Indenture)
In certain events, the Conversion Price will be subject to adjustment as set
forth in the Subordinated Debt Indenture. Such events include: (a) any payment
of a dividend (or other distribution) payable in Common Stock on any class of
Capital Stock of the Company, (b) any subdivision, combination or
reclassification of Common Stock, (c) any issuance to all holders of Common
Stock of rights, options or warrants entitling them to subscribe for or
purchase Common Stock at less than the then current market price (as
determined in accordance with the Subordinated Debt Indenture) of Common
Stock; provided, however, that if such options or warrants are only
exercisable upon the occurrence of certain triggering events, then the
Conversion Price will not be adjusted until such triggering events occur, (d)
any distribution to all holders of Common Stock of evidences of indebtedness,
shares of Capital Stock other than Common Stock, cash or other assets
(including securities, but excluding those dividends, rights, options,
warrants and distributions referred to above and excluding regular dividends
and distributions paid exclusively in cash), (e) any distribution consisting
exclusively of cash (excluding any cash portion of distributions referred to
in (d) above, or cash distributed upon a merger or consolidation to which the
third succeeding paragraph applies) to all holders of Common Stock in an
aggregate amount that, combined together with (i) all other such all-cash
distributions made within the then preceding 12 months in respect of which no
adjustment has been made and (ii) any cash and the fair market value of other
consideration paid or payable in respect of any tender offer by the Company or
any of its Subsidiaries for Common Stock concluded within the preceding 12
months in respect of which no adjustment has been made, exceeds 15% of the
Company's market capitalization (defined as being the product of the then
current market price of the Common Stock times the number of shares of Common
Stock then outstanding) on the record date of such distribution, and (f) the
completion of a tender or exchange offer made by the Company or any of its
Subsidiaries for Common Stock that involves an aggregate consideration that,
together with (i) any cash and the fair market value of other consideration
payable in a tender or exchange offer by the Company or any of its
Subsidiaries for Common Stock expiring within the 12 months preceding the
expiration of such tender or exchange offer in respect of which no adjustment
has been made and (ii) the aggregate amount of any such all-cash distributions
referred to in (e) above to all holders of Common Stock within the 12 months
preceding the expiration of such tender or exchange offer in respect of which
no adjustments have been made, exceeds 15% of the Company's market
capitalization on the expiration of such tender offer. No adjustment of the
Conversion Price will be required to be made until the cumulative adjustments
amount to 1.0% or more of the Conversion Price as last adjusted. The Company
reserves the right to make such reductions in the Conversion Price in addition
to those required in the foregoing provisions as it considers to be advisable
in order that any event treated for federal income tax purposes as a dividend
of a stock or stock rights will not be taxable to the recipients. In the event
the Company elects to make such a reduction in the Conversion Price, the
Company will comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder if and to the extent
that such laws and regulations are applicable in connection with the reduction
of the Conversion Price. (Section 1504 of the Subordinated Debt Indenture)
Fractional shares of Common Stock will not be issued upon conversion, but,
in lieu thereof, the Company will pay a cash adjustment based on the then
current market price of the Common Stock. (Section 1503 of the Subordinated
Debt Indenture) Upon conversion, no adjustments will be made for accrued
interest or dividends, and therefore convertible Subordinated Debt Securities
surrendered for conversion between the record date for an interest payment and
the Interest Payment Date (except convertible Subordinated Debt Securities
called for redemption on a redemption date during such period) must be
accompanied by payment of an amount equal to the interest thereon which the
registered holder is to receive. (Sections 1504 and 1502 of the Subordinated
Debt Indenture)
18
<PAGE>
In the case of any reclassification, consolidation or merger of the Company
with or into another Person or any merger of another Person with or into the
Company (with certain exceptions), or in case of any conveyance, transfer or
lease of the assets of the Company substantially as an entirety, each
convertible Subordinated Debt Security then outstanding will, without the
consent of any Holder thereof, become convertible only into the kind and
amount of securities, cash and other property receivable upon such
reclassification, consolidation, merger, conveyance, transfer or lease by a
holder of the number of shares of Common Stock into which such Subordinated
Debt Security was convertible immediately prior thereto, after giving effect
to any adjustment event, who failed to exercise any rights of election and
received per share the kind and amount received per share by a plurality of
non-electing shares. (Section 1505 of the Subordinated Debt Indenture)
19
<PAGE>
DESCRIPTION OF THE PREFERRED SECURITIES
Pursuant to the terms of the Trust Agreement, the Trust will issue the
Preferred Securities. The Preferred Securities will represent preferred
undivided beneficial interests in the assets of the Trust, and the holders
thereof will be entitled to a preference over the Common Securities in certain
circumstances with respect to Distributions and amounts payable on redemption
of the Trust Securities or liquidation of the Trust. See "--Subordination of
Common Securities." The Trust Agreement will be qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). This summary of
certain provisions of the Preferred Securities, the Common Securities and the
Trust Agreement, a copy of which is filed as an exhibit to the Registration
Statement of which this Prospectus is a part, does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all the
provisions of the Trust Agreement, including the definitions therein of
certain terms.
GENERAL
The Trust Agreement authorizes the Trust to issue the Preferred Securities
and the Common Securities. All of the Common Securities will be owned by the
Company. The Preferred Securities will rank pari passu, and payments will be
made thereon pro rata, with the Common Securities except that upon the
occurrence of a Debenture Event of Default, the rights of the holders of the
Common Securities to receive Distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
Preferred Securities. Legal title to the Trust Debentures will be held by the
Property Trustee in trust for the benefit of the holders of the Trust
Securities. The Trust may not borrow money, issue debt or any securities other
than the Trust Securities, execute mortgages or pledge any of its assets. The
Guarantee will not guarantee payment of Distributions or amounts payable on
redemption of the Preferred Securities or liquidation of the Trust when the
Trust does not have funds on hand legally available for such payments. See
"Description of Guarantee." In such event, the remedy of a holder of Preferred
Securities is to direct the Property Trustee to enforce its rights under the
Trust Debentures. In addition, a holder of Preferred Securities may institute
a legal proceeding directly against the Company, without first instituting a
legal proceeding against the Property Trustee or any other person or entity,
for enforcement of payment to such holder of principal of, premium, if any, or
interest on the Trust Debentures having a principal amount equal to the
aggregate Liquidation Amount of the Preferred Securities of such holder on or
after the due date specified in the Trust Debentures.
Holders of the Preferred Securities have no preemptive or similar rights.
DISTRIBUTIONS
Distributions on the Preferred Securities will be payable on the dates and
at the rates set forth in a Prospectus Supplement hereto. The Distribution
rate and the relevant Distribution Date (as defined below) for the Trust
Securities will correspond to the payments and payment dates on the Trust
Debentures. The ability of the Trust to make timely payments of Distributions
on the Trust Securities is solely dependent on the Company's making interest
payments on the Trust Debentures as and when required.
So long as no Debenture Event of Default has occurred and is continuing, the
Company will have the right under the Indenture to elect to defer the payment
of interest on the Trust Debentures at any time and from time to time for a
period not exceeding 10 consecutive semi-annual periods with respect to each
Extension Period; provided that no Extension Period shall end on a date other
than an Interest Payment Date or extend beyond the Stated Maturity Date. Semi-
annual Distributions on the Preferred Securities will be deferred by the Trust
during any such Extension Period. Distributions to which holders of the
Preferred Securities are entitled during any such Extension Period will
accumulate additional Distributions thereon at the rate per annum set forth in
the Prospectus Supplement from the relevant Distribution Date (to the extent
permitted by applicable law), but not exceeding the interest rate then
accruing on the Trust Debentures. The term "Distributions," as used herein,
shall include any such additional Distributions.
20
<PAGE>
Prior to the termination of any such Extension Period, the Company may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods, end
on a date other than an Interest Payment Date or extend beyond the Stated
Maturity Date. Upon the termination of any such Extension Period and the
payment of all amounts then due on any Interest Payment Date, the Company may
elect to begin a new Extension Period, subject to the above requirements. No
interest shall be due and payable during an Extension Period, except at the
end thereof. The Company must give the Property Trustee, the Administrative
Trustees and the Debenture Trustee notice of its election of any such
Extension Period (or an extension thereof) at least five Business Days prior
to the earlier of (i) the date the Distributions on the Preferred Securities
would have been payable except for the election to begin such Extension Period
or (ii) the date the Administrative Trustees are required to give notice to
any securities exchange 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 five Business Days prior to such record date. There is no limitation
on the number of times that the Company may elect to begin an Extension
Period. Accordingly, there could be multiple Extension Periods of varying
lengths throughout the term of the Preferred Securities. See "Description of
Trust Debentures--Option to Extend Interest Payment Date."
During any such Extension Period, the Company may not, and will not permit
any subsidiaries of the Company to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (other than (a) dividends
or distributions in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Common Stock, (b) any declaration of a dividend in
connection with the implementation of a shareholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) as a result of a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company's capital stock, (d) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted
or exchanged, and (e) purchases of Common Stock related to the issuance of
Common Stock or rights under any of the Company's benefit plans for its
directors, officers or employees or any of the Company's dividend reinvestment
plans), (ii) make any payment of principal of or premium, if any, or interest
on or repay, repurchase or redeem any debt securities of the Company
(including Other Debentures) that rank pari passu with or junior in right of
payment to the Trust Debentures or (iii) make any guarantee payments (other
than payments under the Guarantee) with respect to any guarantee by the
Company of the debt securities of any subsidiary of the Company (including
Other Guarantees) if such guarantee ranks pari passu with or junior in right
of payment to the Trust Debentures.
The revenue of the Trust available for distribution to holders of the
Preferred Securities will be limited to payments under the Trust Debentures in
which the Trust will invest the proceeds from the issuance and sale of the
Trust Securities. See "Description of Trust Debentures--General." If the
Company does not make interest payments on the Trust Debentures, the Property
Trustee will not have funds available to pay Distributions on the Preferred
Securities. The payment of Distributions (if and to the extent the Trust has
funds on hand legally available for the payment of such Distributions) will be
guaranteed by the Company on a limited basis as set forth herein under
"Description of Guarantee."
PAYMENT OF ADDITIONAL SUMS
If a Tax Event has occurred and is continuing and the Trust is the holder of
all of the Trust Debentures, the Company will pay Additional Sums (as defined
below), if any, on the Trust Debentures. "Additional Sums" means the
additional amounts as may be necessary in order that the amount of
Distributions then due and payable by the Trust on the outstanding Preferred
Securities and Common Securities of the Trust will not be reduced as a result
of any additional taxes, duties and other governmental charges to which the
Trust has become subject as a result of a Tax Event.
21
<PAGE>
REDEMPTION
Upon the repayment on the Stated Maturity Date or prepayment prior to the
Stated Maturity Date of the Trust Debentures (other than following the
distribution of the Trust Debentures to the holders of the Trust Securities),
the proceeds from such repayment or prepayment shall be applied by the
Property Trustee to redeem a Like Amount (as defined below) of the Trust
Securities, upon not less than 30 nor more than 60 days' notice of a date of
redemption to the holders of the Trust Securities (the "Redemption Date"), at
the applicable Redemption Price, which shall be equal to (i) in the case of
the payment of the Trust Debentures on the Stated Maturity Date, the Maturity
Redemption Price (equal to the principal amount of, plus accrued and unpaid
interest on, the Trust Debentures), (ii) in the case of the optional
prepayment of the Trust Debentures, upon the occurrence and continuation of a
Special Event, the Special Event Redemption Price (equal to the Special Event
Prepayment Price in respect of the Trust Debentures) and (iii) in the case of
the optional prepayment of the Trust Debentures, the Optional Redemption Price
(equal to the Optional Prepayment Price in respect of the Trust Debentures).
See "Description of Trust Debentures--Optional Prepayment" and "--Special
Event Prepayment." If less than all of the Trust Debentures are to be prepaid
on a Redemption Date, then the proceeds of such prepayment shall be allocated
pro rata among the Trust Securities.
"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the
principal amount of Trust Debentures to be paid in accordance with their terms
and (ii) with respect to a distribution of Trust Debentures upon the
liquidation of the Trust, Trust Debentures having a principal amount equal to
the Liquidation Amount of the Trust Securities of the holder to whom such
Trust Debentures are being distributed.
The Company will have the option to prepay the Trust Debentures, (i) in
whole at any time or in part from time to time at the Optional Prepayment
Price and (ii) in whole but not in part, at any time within 90 days of the
occurrence of a Special Event, at the Special Event Prepayment Price. See
"Description of Trust Debentures--Optional Prepayment" and "--Special Event
Prepayment."
REDEMPTION PROCEDURES
If applicable, Trust Securities shall be redeemed at the applicable
Redemption Price with the proceeds from the contemporaneous repayment or
prepayment of the Trust Debentures. Any redemption of Trust Securities shall
be made and the applicable Redemption Price shall be payable on the Redemption
Date only to the extent that the Trust has funds legally available for the
payment of such applicable Redemption Price. See also "--Subordination of
Common Securities."
If the Trust gives a notice of redemption in respect of the Preferred
Securities, then, by 12:00 noon, New York City time, on the Redemption Date,
to the extent funds are legally available, with respect to the Preferred
Securities held by DTC or its nominees, the Property Trustee will deposit
irrevocably with DTC funds sufficient to pay the applicable Redemption Price.
See "--Form, Denomination, Book-Entry Procedures and Transfer." With respect
to the Preferred Securities held in certificated form, the Property Trustee,
to the extent funds are legally available, will irrevocably deposit with the
paying agent for the Preferred Securities funds sufficient to pay the
applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the applicable Redemption Price to the
holders thereof upon surrender of their certificates evidencing the Preferred
Securities. See "--Payment and Paying Agency." Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date shall be payable to
the holders of such Preferred Securities on the relevant record dates for the
related Distribution Dates. If notice of redemption shall have been given and
funds deposited as required, then upon the date of such deposit, all rights of
the holders of the Preferred Securities called for redemption will cease,
except the right of the holders of the Preferred Securities to receive the
applicable Redemption Price, but without interest on such Redemption Price,
and the Preferred Securities will cease to be outstanding. In the event that
any Redemption Date of Preferred Securities is not a Business Day, then the
applicable Redemption Price payable on such date will be paid on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such next
22
<PAGE>
succeeding Business Day falls in the next calendar year, such payment shall be
made on the immediately preceding Business Day. In the event that payment of
the applicable Redemption Price is improperly withheld or refused and not paid
either by the Trust or by the Company pursuant to the Guarantee as described
under "Description of Guarantee," (i) Distributions on Preferred Securities
will continue to accumulate at the then applicable rate, from the Redemption
Date originally established by the Trust to the date such applicable
Redemption Price is actually paid and (ii) the actual payment date will be the
Redemption Date for purposes of calculating the applicable Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), the Company or its subsidiaries may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
The Trust may not redeem fewer than all of the outstanding Preferred
Securities unless all accumulated and unpaid Distributions have been paid on
all Preferred Securities for all semi-annual Distribution periods terminating
on or prior to the Redemption Date. If less than all of the Preferred
Securities and Common Securities issued by the Trust are to be redeemed on a
Redemption Date, then the aggregate amount of such Preferred Securities and
Common Securities to be redeemed shall be allocated pro rata among the
Preferred Securities and the Common Securities. The particular Preferred
Securities to be redeemed shall be selected on a pro rata basis not more than
60 days prior to the Redemption Date by the Property Trustee from the
outstanding Preferred Securities not previously called for redemption, by such
method as the Property Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to $1,000 or
integral multiples of $1,000 in excess thereof) of the Liquidation Amount of
Preferred Securities in denominations larger than $1,000. The Property Trustee
shall promptly notify the trust registrar in writing of the Preferred
Securities selected for redemption and, in the case of any Preferred Security
selected for partial redemption, the Liquidation Amount thereof to be
redeemed. For all purposes of the Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Preferred
Securities shall relate, in the case of any Preferred Security redeemed or to
be redeemed only in part, to the portion of the aggregate Liquidation Amount
of Preferred Securities which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days prior to the Redemption Date to each holder of Trust Securities at its
registered address. Unless the Company defaults in payment of the applicable
Redemption Price on, or in the repayment of, the Trust Debentures, on and
after the Redemption Date Distributions will cease to accrue on the Trust
Securities called for redemption.
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF TRUST DEBENTURES
The Company will have the right at any time to dissolve the Trust and, after
satisfaction of liabilities to creditors of the Trust as provided by
applicable law, cause the Trust Debentures to be distributed to the holders of
the Trust Securities in liquidation of the Trust. Such right is subject to the
Administrative Trustees having received an opinion of counsel to the effect
that such distribution will not be a taxable event to holders of Preferred
Securities.
The Trust shall automatically dissolve upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Company; (ii)
the distribution of a Like Amount of the Trust Debentures to the holders of
the Trust Securities, if the Company has given written direction to the
Property Trustee to dissolve the Trust (which direction is optional and,
except as described above, wholly within the discretion of the Company, as
Sponsor); (iii) redemption of all of the Trust Securities as described under
"--Redemption;" (iv) expiration of the term of the Trust; and (v) the entry of
an order for the dissolution of the Trust by a court of competent
jurisdiction.
If a dissolution occurs as described in clause (i), (ii), (iv), or (v)
above, the Trust shall be liquidated by the Administrative Trustees as
expeditiously as the Administrative Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to the holders of the Trust
23
<PAGE>
Securities a Like Amount of the Trust Debentures, unless such distribution is
determined by the Property Trustee not to be practicable, in which event such
holders will be entitled to receive pro rata out of the assets of the Trust
legally available for distribution to holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the aggregate of the Liquidation Amount plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid only
in part because the Trust has insufficient assets on hand legally available to
pay in full the aggregate Liquidation Distribution, then the amount payable
directly by the Trust on the Trust Securities shall be paid on a pro rata
basis, except that if a Debenture Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities. See "--Subordination of Common Securities."
If the Company elects not to prepay the Trust Debentures prior to maturity
in accordance with their terms and either elects not to or is unable to
liquidate the Trust and distribute the Trust Debentures to holders of the
Trust Securities, the Trust Securities will remain outstanding until the
repayment of the Trust Debentures on the Stated Maturity Date.
After the liquidation date is fixed for any distribution of Trust Debentures
to holders of the Trust Securities, (i) the Trust Securities will no longer be
deemed to be outstanding, (ii) DTC or its nominee will receive, in respect of
each registered global certificate, if any, representing Trust Securities and
held by it, a registered global certificate or certificates representing the
Trust Debentures to be delivered upon such distribution and (iii) any
certificates representing Trust Securities not held by DTC or its nominee will
be deemed to represent Trust Debentures having a principal amount equal to the
Liquidation Amount of such Trust Securities, and bearing accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distributions on
such Trust Securities until such certificates are presented to the
Administrative Trustees or their agent for cancellation, whereupon the Company
will issue to such holder, and the Debenture Trustee will authenticate, a
certificate representing such Trust Debentures.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Trust
Securities, as applicable, shall be made pro rata based on the Liquidation
Amount of the Trust Securities; provided, however, that if on any Distribution
Date or Redemption Date a Debenture Event of Default has occurred and is
continuing, no payment of any Distribution on, or applicable Redemption Price
of, any of the Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of the Common Securities, shall
be made unless payment in full in cash of all accumulated and unpaid
Distributions on all of the outstanding Preferred Securities for all
Distribution periods terminating on or prior thereto, or in the case of
payment of the applicable Redemption Price the full amount of such Redemption
Price, shall have been made or provided for, and all funds available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions on, or Redemption Price of, the Preferred Securities then due
and payable.
In the case of any Event of Default under the Trust Agreement, the Company,
as holder of the Common Securities, will be deemed to have waived any right to
act with respect to such Event of Default until the effect of such Event of
Default with respect to the Preferred Securities shall have been cured, waived
or otherwise eliminated. Until any such Event of Default has been so cured,
waived or otherwise eliminated, the Property Trustee shall act solely on
behalf of the holders of the Preferred Securities and not on behalf of the
Company as holder of the Common Securities, and only the holders of the
Preferred Securities will have the right to direct the Property Trustee to act
on their behalf.
EVENTS OF DEFAULT; NOTICE
The occurrence of a Debenture Event of Default (see "Description of Trust
Debentures--Debenture Events of Default") constitutes an "Event of Default"
under the Trust Agreement (a "Trust Agreement Event of Default").
24
<PAGE>
Within five Business Days after the occurrence of any Trust Agreement Event
of Default actually known to the Property Trustee, the Property Trustee shall
transmit notice of such Trust Agreement Event of Default to the holders of the
Preferred Securities, the Administrative Trustees and the Company, as Sponsor,
unless such Trust Agreement Event of Default shall have been cured or waived.
The Company, as Sponsor, and the Administrative Trustees are required to file
annually with the Property Trustee a certificate as to whether or not they are
in compliance with all the conditions and covenants applicable to them under
the Trust Agreement.
Upon the occurrence of a Trust Agreement Event of Default, the Debenture
Trustee or the Property Trustee as the holder of the Trust Debentures will
have the right under the Debenture Indenture to declare the principal of and
interest on the Trust Debentures to be immediately due and payable.
If a Trust Agreement Event of Default occurs and is continuing, then the
holders of not less than a majority in aggregate Liquidation Amount of
Preferred Securities have the right to direct the exercise of any trust or
power conferred upon the Property Trustee under the Trust Agreement, including
the right to direct the Property Trustee under the Trust Agreement to exercise
the remedies available to it as holder of the Trust Debentures. If the
Property Trustee fails to enforce its rights with respect to the Trust
Debentures held by the Trust, any record holder of Preferred Securities may,
to the fullest extent permitted by law, institute legal proceedings directly
against the Company to enforce the Property Trustee's rights under such Trust
Debentures without first instituting any legal proceedings against such
Property Trustee or any other person or entity. In addition, if a Trust
Agreement Event of Default has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest, principal or other
required payments on the Trust Debentures issued to the Trust on the date such
interest, principal or other payment is otherwise payable, then a record
holder of Preferred Securities may, on or after the respective due dates
specified in the Trust Debentures, institute a proceeding directly against the
Company for enforcement of payment on Trust Debentures having a principal
amount equal to the aggregate Liquidation Amount of the Preferred Securities
held by such holder. In connection with such Direct Action, the Company will
be subrogated to the rights of such record holder of Preferred Securities to
the extent of any payment made by the Company to such record holder of
Preferred Securities.
If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities as
described under "--Liquidation of the Trust and Distribution of Trust
Debentures" and "--Subordination of Common Securities."
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing,
the Property Trustee and the Delaware Trustee may be removed at such time by
the holders of a majority in Liquidation Amount of the outstanding Preferred
Securities. In no event will the holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Company as the holder of the
Common Securities. No resignation or removal of an Issuer Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
Trust Agreement.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The Trust may not merge with or into, convert into, consolidate, amalgamate,
or be replaced by, or convey, transfer or lease its properties and assets as
an entirety or substantially as an entirety to any corporation or other
Person, except as described below or as otherwise described under "--
Liquidation of the Trust and Distribution of Trust Debentures." The Trust may,
at the request of the Company, as Sponsor, with the consent of the
Administrative Trustees and without the consent of the holders of the
Preferred Securities, the Delaware Trustee or the Property Trustee, merge with
or into, convert into, consolidate, amalgamate, or be replaced by or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to a trust organized as such under the laws of any State; provided
that (i) such successor entity either (a) expressly assumes all of the
25
<PAGE>
obligations of the Trust with respect to the Trust Securities and the Trust
Agreement or (b) substitutes for the Trust Securities other securities having
substantially the same terms as the Trust Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the Trust
Securities rank in priority with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) the Company, as Sponsor, expressly
appoints a trustee of such successor entity possessing the same powers and
duties as the Property Trustee as the holder of the Trust Debentures, (iii)
the Successor Securities are listed, or any Successor Securities will be
listed upon notification of issuance, on any national securities exchange or
other organization on which the Trust Securities are then listed or quoted, if
any, (iv) if the Preferred Securities (including any Successor Securities) are
rated by any nationally recognized statistical rating organization prior to
such transaction, such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities
(including any Successor Securities) or, if the Trust Debentures are so rated,
the Trust Debentures, to be downgraded by any such nationally recognized
statistical rating organization, (v) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Trust
Securities (including any Successor Securities) in any material respect, (vi)
such successor entity has a purpose substantially identical to that of the
Trust, (vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Company, as Sponsor, has received an
opinion from independent counsel to the Trust experienced in such matters to
the effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Trust Securities (including
any Successor Securities) in any material respect, and (b) following such
merger, conversion, consolidation, amalgamation, replacement, conveyance,
transfer or lease, (1) neither the Trust nor such successor entity will be
required to register as an investment company under the Investment Company Act
of 1940, as amended (the "Investment Company Act"), and (2) the Trust or the
successor entity will continue to be classified as a grantor trust for United
States federal income tax purposes, (viii) the Company or any permitted
successor or assignee owns all of the common securities of such successor
entity and guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee and the
Common Guarantee and (ix) there shall have been furnished to the Property
Trustee an officer's certificate and an opinion of counsel, each to the effect
that all conditions precedent in the Trust Agreement to such transaction have
been satisfied. Notwithstanding the foregoing, the Trust shall not, except
with the consent of holders of 100% in Liquidation Amount of the Trust
Securities, consolidate, amalgamate, merge with or into, convert into, or be
replaced by or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to, any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger, replacement, conveyance, transfer or
lease would cause the Trust or the successor entity not to be classified as a
grantor trust for United States federal income tax purposes or would cause the
holders of the Trust Securities not to be treated as owning an undivided
interest in the Trust Debentures.
VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT
Except as provided below and under "--Mergers, Consolidations, Amalgamations
or Replacements of the Trust" and "Description of Guarantee--Amendments and
Assignment" and as otherwise required by law and the Trust Agreement, the
holders of the Preferred Securities will have no voting rights.
The Trust Agreement may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities (i) to cure any ambiguity, correct or
supplement any provisions in the Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters
or questions arising under the Trust Agreement, which shall not be
inconsistent with the other provisions of the Trust Agreement, or (ii) to
modify, eliminate or add to any provisions of the Trust Agreement to such
extent as shall be necessary to ensure that the Trust will be classified for
United States federal income tax purposes as a grantor trust at all times that
any Trust Securities are outstanding or to ensure that the Trust will not be
required to register as an "investment company" under the Investment Company
Act; provided, however, that in each such case such action shall not adversely
affect in any material respect the interests of the holders of the Trust
Securities. Any amendments of the Trust Agreement
26
<PAGE>
pursuant to the foregoing shall become effective when notice thereof is given
to the holders of the Trust Securities. The Trust Agreement may be amended by
the Issuer Trustees and the Company (i) with the consent of holders
representing a majority (based upon Liquidation Amount) of the outstanding
Trust Securities, and (ii) upon receipt by the Issuer Trustees of an opinion
of counsel experienced in such matters to the effect that such amendment or
the exercise of any power granted to the Issuer Trustees in accordance with
such amendment will not affect the Trust's status as a grantor trust for
United States federal income tax purposes or the Trust's exemption from status
as an "investment company" under the Investment Company Act; provided that,
without the consent of each holder of Trust Securities, the Trust Agreement
may not be amended to (a) change the amount or timing of any Distribution on
the Trust Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Trust Securities as of a
specified date or (b) restrict the right of a holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date.
So long as any Trust Debentures are held by the Trust, the Issuer Trustees
shall not (i) direct the time, method and place of conducting any proceeding
for any remedy available to the Debenture Trustee, or executing any trust or
power conferred on the Debenture Trustee with respect to the Trust Debentures,
(ii) waive any past defaults under the Indenture, (iii) exercise any right to
rescind or annul a declaration of acceleration of the maturity of the
principal of the Trust Debentures or (iv) consent to any amendment,
modification or termination of the Indenture or the Trust Debentures, where
such consent shall be required, without, in each case, obtaining the prior
approval of the holders of a majority in Liquidation Amount of all outstanding
Preferred Securities; provided, however, that where a consent under the
Indenture would require the consent of each holder of Trust Debentures
affected thereby, no such consent shall be given by the Property Trustee
without the prior consent of each holder of the Preferred Securities. The
Issuer Trustees shall not revoke any action previously authorized or approved
by a vote of the holders of the Preferred Securities except pursuant to a
subsequent vote of such holders. The Property Trustee shall notify each holder
of Preferred Securities of any notice of default which it receives with
respect to the Trust Debentures. In addition to obtaining the foregoing
approvals of the holders of the Preferred Securities, prior to taking any of
the foregoing actions, the Issuer Trustees shall obtain an opinion of counsel
experienced in such matters to the effect that the Trust will not fail to be
classified as a grantor trust for United States federal income tax purposes on
account of such action.
Any required approval of holders of Preferred Securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Preferred Securities are entitled to vote to be given to each
holder of record of Preferred Securities in the manner set forth in the Trust
Agreement.
No vote or consent of the holders of Preferred Securities will be required
for the Trust to redeem and cancel the Preferred Securities in accordance with
the Trust Agreement.
Notwithstanding that holders of the Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Company, the Issuer Trustees or any
affiliate of the Company or any Issuer Trustee shall not be entitled to vote
or consent and shall, for purposes of such vote or consent, be treated as if
they were not outstanding.
PAYMENT AND PAYING AGENCY
Payments in respect of Preferred Securities held in global form shall be
made to the Depositary, which shall credit the relevant accounts at the
Depositary on the applicable Distribution Dates, or in respect of Preferred
Securities that are not held by the Depositary, such payments shall be made by
check mailed to the address of the holder entitled thereto as such address
shall appear on the register. The paying agent (the "Paying Agent") shall
initially be an affiliate of the Property Trustee and any co-paying agent
chosen by the Property Trustee and acceptable to the Administrative Trustees
and the Company. The Paying Agent shall be permitted to resign as Paying Agent
upon 30 days' written notice to the Property Trustee, the Administrative
Trustees and the
27
<PAGE>
Company. In the event that the Property Trustee shall no longer be the Paying
Agent, the Administrative Trustees shall appoint a successor (which shall be a
bank or trust company acceptable to the Administrative Trustees and the
Company) to act as Paying Agent.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
Preferred Securities will be in registered, global form (collectively, the
"Global Preferred Securities"). The Global Preferred Securities will be
deposited upon issuance with DTC, in New York, New York, and registered in the
name of DTC or its nominee, in each case for credit to an account of a direct
or indirect participant in DTC as described below.
A Global Preferred Security may not be transferred as a whole except by DTC
to another nominee of DTC or to a successor of DTC or its nominee. Beneficial
interests in the Global Preferred Securities shall be transferred and
exchanged through the facilities of DTC. Beneficial interests in the Global
Preferred Securities may not be exchanged for Preferred Securities in
certificated form except in the limited circumstances described below. See "--
Exchange of Book-Entry Preferred Securities for Certificated Preferred
Securities."
DEPOSITARY PROCEDURES
DTC has advised the Trust and the Company that DTC is a limited-purpose
trust company organized under the laws of the State of New York, a member of
the Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "clearing agency," registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
in accounts of its Participants. The Participants include securities brokers
and dealers, banks, trust companies, clearing corporations and certain other
organizations. Indirect access to DTC's system is also available to other
entities such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Participant, either
directly or indirectly (collectively, the "Indirect Participants"). Persons
who are not Participants may beneficially own securities held by or on behalf
of DTC only through the Participants or the Indirect Participants. The
ownership interest and transfer of ownership interest of each actual purchaser
of each security held by or on behalf of DTC are recorded on the records of
the Participants and the Indirect Participants.
DTC has also advised the Trust and the Company that, pursuant to procedures
established by it, (i) upon deposit of the Global Preferred Securities, DTC
will credit the accounts of Participants designated by the Exchange Agent with
portions of the Liquidation Amount of the Global Preferred Securities and (ii)
ownership of such interests in the Global Preferred Securities will be shown
on, and the transfer of ownership thereof will be effected only through,
records maintained by DTC (with respect to the Participants) or by the
Participants and the Indirect Participants (with respect to other owners of
beneficial interests in the Global Preferred Securities).
Investors in the Global Preferred Securities may hold their interests
therein directly through DTC if they are participants in such system, or
indirectly through organizations which are participants in such system. All
interests in a Global Preferred Security will be subject to the procedures and
requirements of DTC. Those interests held through Euroclear or Cedel Bank may
also be subject to the procedures and requirements of such system. The laws of
some states require that certain persons take physical delivery in
certificated form of securities that they own. Consequently, the ability to
transfer beneficial interests in a Global Preferred Security to such persons
will be limited to that extent. Because DTC can act only on behalf of
Participants, which in turn act on behalf of Indirect Participants and certain
banks, the ability of a person having beneficial interests in a Global
Preferred Security to pledge such interests to persons or entities that do not
participate in the DTC system,
28
<PAGE>
or otherwise take actions in respect of such interests, may be affected by the
lack of a physical certificate evidencing such interests. For certain other
restrictions on the transferability of the Preferred Securities, see "--
Exchange of Book-Entry Preferred Securities for Certificated Preferred
Securities."
Except as described below, owners of interests in the Global Preferred
Securities will not have Preferred Securities registered in their name, will
not receive physical delivery of Preferred Securities in certificated form and
will not be considered the registered owners or holders thereof under the
Trust Agreement for any purpose.
Payments in respect of each Global Preferred Security registered in the name
of DTC or its nominee will be payable by the Property Trustee to DTC in its
capacity as the registered holder under the Trust Agreement. Under the terms
of the Trust Agreement, the Property Trustee will treat the persons in whose
names the Preferred Securities, including the Global Preferred Securities, are
registered as the owners thereof for the purpose of receiving such payments
and for any and all other purposes whatsoever. Consequently, neither the
Property Trustee nor any agent thereof has or will have any responsibility or
liability for (i) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of beneficial
ownership interests in the Global Preferred Securities, or for maintaining,
supervising or reviewing any of DTC's records or any Participant's or Indirect
Participant's records relating to the beneficial ownership interests in the
Global Preferred Securities or (ii) any other matter relating to the actions
and practices of DTC or any of its Participants or Indirect Participants. DTC
has advised the Trust and the Company that its current practice, upon receipt
of any payment in respect of securities such as the Preferred Securities, is
to credit the accounts of the relevant Participants with the payment on the
payment date, in amounts proportionate to their respective holdings in
Liquidation Amount of beneficial interests in the relevant security as shown
on the records of DTC unless DTC has reason to believe it will not receive
payment on such payment date. Payments by the Participants and the Indirect
Participants to the beneficial owners of Preferred Securities represented by
Global Preferred Securities will be governed by standing instructions and
customary practices and will be the responsibility of the Participants or the
Indirect Participants and will not be the responsibility of DTC, the Property
Trustee, the Trust or the Company. None of the Trust, the Company or the
Property Trustee will be liable for any delay by DTC or any of its
Participants in identifying the beneficial owners of the Preferred Securities,
and the Trust, the Company and the Property Trustee may conclusively rely on
and will be protected in relying on instructions from DTC or its nominee for
all purposes.
Interests in the Global Preferred Securities will trade in DTC's Same-Day
Funds Settlement System and secondary market trading activity in such
interests will therefore settle in immediately available funds, subject in all
cases to the rules and procedures of DTC and its Participants. Transfers
between Participants in DTC will be effected in accordance with DTC's
procedures, and will be settled in same-day funds.
DTC has advised the Trust and the Company that it will take any action
permitted to be taken by a holder of Preferred Securities only at the
direction of one or more Participants to whose account with DTC interests in
the Global Preferred Securities are credited and only in respect of such
portion of the Liquidation Amount of the Preferred Securities as to which such
Participant or Participants has or have given such direction. However, if
there is an Event of Default under the Trust Agreement, DTC reserves the right
to exchange the Global Preferred Securities for Preferred Securities in
certificated form and to distribute such Preferred Securities to its
Participants.
The information in this section concerning DTC and its book-entry system has
been obtained from sources that the Trust and the Company believe to be
reliable, but neither the Trust nor the Company takes responsibility for the
accuracy thereof.
Although DTC, has agreed to the foregoing procedures to facilitate transfers
of interest in the Global Preferred Securities among Participants in DTC, they
are under no obligation to perform or to continue to perform such procedures,
and such procedures may be discontinued at any time. None of the Trust, the
Company or the Property Trustee will have any responsibility for the
performance by DTC or their respective participants or indirect participants
of their respective obligations under the rules and procedures governing their
operations.
29
<PAGE>
EXCHANGE OF BOOK-ENTRY PREFERRED SECURITIES FOR CERTIFICATED PREFERRED
SECURITIES
A Global Preferred Security is exchangeable for Preferred Securities in
certificated form if (i) DTC notifies the Trust that it is unwilling or unable
to continue as Depositary for the Global Preferred Security or has ceased to
be a clearing agency registered under the Exchange Act, and the Trust
thereupon fails to appoint a successor Depositary within 90 days, (ii) the
Company, on behalf of the Trust, in its sole discretion elects to cause the
issuance of the Preferred Securities in certificated form or (iii) there shall
have occurred and be continuing an Event of Default under the Trust Agreement.
In addition, beneficial interests in a Global Preferred Security may be
exchanged for certificated Preferred Securities upon request but only upon at
least 20 days' prior written notice given to the Property Trustee by or on
behalf of DTC in accordance with customary procedures. In all cases,
certificated Preferred Securities delivered in exchange for any Global
Preferred Security or beneficial interests therein will be registered in the
names, and issued in any approved denominations, requested by or on behalf of
the Depositary (in accordance with its customary procedures).
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the
Preferred Securities.
Registration of transfers of the Preferred Securities will be effected
without charge by or on behalf of the Trust, but upon payment of any tax or
other governmental charges that may be imposed in connection with any transfer
or exchange. The Trust will not be required to register or cause to be
registered the transfer of the Preferred Securities after they have been
called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of a
Trust Agreement Event of Default, undertakes to perform only such duties as
are specifically set forth in the Trust Agreement and, during the existence of
a Trust Agreement Event of Default, must exercise the same degree of care and
skill as a prudent person would exercise or use in the conduct of his or her
own affairs. Subject to this provision, the Property Trustee is under no
obligation to exercise any of the powers vested in it by the Trust Agreement
at the request of any holder of Trust Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby. If no Trust Agreement Event of Default has occurred and is
continuing and the Property Trustee is required to decide between alternative
courses of action, construe ambiguous provisions in the Trust Agreement or is
unsure of the application of any provision of the Trust Agreement, and the
matter is not one on which holders of the Preferred Securities or the Common
Securities are entitled under the Trust Agreement to vote, then the Property
Trustee shall take such action as is directed by the Company and, if not so
directed, shall take such action as it deems advisable and in the best
interests of the holders of the Trust Securities and will have no liability
except for its own bad faith, negligence or willful misconduct.
The First National Bank of Chicago, will serve as the Property Trustee, the
Debenture Trustee and the Guarantee Trustee. First Chicago Delaware Inc. will
serve as the Delaware Trustee. The Company and certain of its subsidiaries
maintain deposit accounts and banking relationships with The First National
Bank of Chicago.
30
<PAGE>
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that the Trust will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a
corporation for United States federal income tax purposes and so that the
Trust Debentures will be treated as indebtedness of the Company for United
States federal income tax purposes. In this connection, the Company and the
Administrative Trustees are authorized to take any action, not inconsistent
with applicable law, the certificate of trust of the Trust or the Trust
Agreement, that the Company and the Administrative Trustees determine in their
discretion to be necessary or desirable for such purposes, as long as such
action does not materially adversely affect the interests of the holders of
the Trust Securities.
The Trust Agreement and the Preferred Securities will be governed by and
construed in accordance with the internal laws of the State of Delaware;
provided that the immunities and standard of care of the Property Trustee
should be governed by New York law.
DESCRIPTION OF TRUST DEBENTURES
The Trust Debentures will be issued under an Indenture, as supplemented or
amended from time to time (as so supplemented or amended, the "Debenture
Indenture"), between the Company and The First National Bank of Chicago, as
trustee (the "Debenture Trustee"). The Debenture Indenture will be qualified
under the Trust Indenture Act. This summary of certain terms and provisions of
the Trust Debentures and the Debenture Indenture does not purport to be
complete and is subject to and is qualified in its entirety by reference to
the Debenture Indenture and those terms made a part of the Debenture Indenture
by the Trust Indenture Act. A copy of the Debenture Indenture is filed as an
exhibit to the Registration Statement of which this Prospectus is a part.
GENERAL
Concurrently with the issuance of the Preferred Securities, the Trust will
invest the proceeds thereof, together with the consideration paid by the
Company for the Common Securities, in the Trust Debentures issued by the
Company. The Trust Debentures will bear interest from the same date and at the
same rate as the Preferred Securities. It is anticipated that, until the
liquidation, if any, of the Trust, each Trust Debenture will be held in the
name of the Property Trustee in trust for the benefit of the holders of the
Trust Securities.
The Trust Debentures will be issued in denominations of $1,000 and integral
multiples thereof. The Trust Debentures will mature on the date provided in
the Supplemental Prospectus hereto (the "Stated Maturity Date").
The Trust Debentures will rank pari passu with all Other Debentures and will
be unsecured and subordinate and junior in right of payment to all Senior
Indebtedness to the extent and in the manner set forth in the Debenture
Indenture. See "--Subordination."
SUBORDINATION
In the Debenture Indenture, the Company has covenanted and agreed that any
Trust Debentures issued thereunder will be subordinate and junior in right of
payment to all Senior Indebtedness to the extent provided in the Debenture
Indenture. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, or in connection with
any insolvency, receivership or bankruptcy proceeding of the Company, all
Senior Indebtedness must be paid in full before the holders of Trust
Debentures will be entitled to receive or retain any payment in respect
thereof.
In the event of the acceleration of the maturity of Trust Debentures, the
holders of all Senior Indebtedness outstanding at the time of such
acceleration will first be entitled to receive payment in full of such Senior
31
<PAGE>
Indebtedness before the holders of Trust Debentures will be entitled to
receive or retain any payment in respect of the Trust Debentures.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Trust Debentures may be made if there shall have
occurred and be continuing a default in any payment with respect to Senior
Indebtedness, or an event of default with respect to any Senior Indebtedness
resulting in the acceleration of the maturity thereof, or if any judicial
proceeding shall be pending with respect to any such default.
"Indebtedness" shall mean (i) every obligation of the Company for money
borrowed; (ii) every obligation of the Company evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses; (iii) every
reimbursement obligation of the Company with respect to letters of credit,
banker's acceptances or similar facilities issued for the account of the
Company; (iv) every obligation of the Company 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 the Company; (vi) all indebtedness of
the Company whether incurred on or prior to the date of the Debenture
Indenture or thereafter incurred, 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, the Company has guaranteed or is responsible or liable, directly or
indirectly, as obligor or otherwise.
"Indebtedness Ranking on a Parity with the Trust Debentures" shall mean (i)
Indebtedness, whether outstanding on the date of execution of the Debenture
Indenture or thereafter created, assumed or incurred, to the extent such
Indebtedness specifically by its terms ranks equally with and not prior to the
Trust Debentures in right of payment upon the happening of the dissolution or
winding-up or liquidation or reorganization of the Company and (ii) all other
debt securities, and guarantees in respect of those debt securities (including
Other Debentures and Other Guarantees), issued to any other trust, or a
trustee of such trust, partnership or other entity affiliated with the Company
that is a financing vehicle of the Company (a "financing entity") in
connection with the issuance by such financing entity of equity securities
that are similar to the Preferred Securities or other securities guaranteed by
the Company. The securing of any Indebtedness, otherwise constituting
Indebtedness Ranking on a Parity with the Trust Debentures, shall not be
deemed to prevent such Indebtedness from constituting Indebtedness Ranking on
a Parity with the Trust Debentures.
"Indebtedness Ranking Junior to the Trust Debentures" shall mean any
Indebtedness, whether outstanding on the date of execution of the Debenture
Indenture or thereafter created, assumed or incurred, to the extent such
Indebtedness specifically by its terms ranks junior to and not equally with or
prior to the Trust Debentures (and any other Indebtedness Ranking on a Parity
with the Trust Debentures) in right of payment upon the happening of the
dissolution or winding-up or liquidation or reorganization of the Company. The
securing of any Indebtedness, otherwise constituting Indebtedness Ranking
Junior to the Trust Debentures shall not be deemed to prevent such
Indebtedness from constituting Indebtedness Ranking Junior to the Trust
Debentures.
"Senior Indebtedness" shall mean all Indebtedness, whether outstanding on
the date of execution of the Debenture Indenture or thereafter created,
assumed or incurred, except Indebtedness Ranking on a Parity with the Trust
Debentures or Indebtedness Ranking Junior to the Trust Debentures, and any
deferrals, renewals or extensions of such Senior Indebtedness.
The Company is a holding company and all of the operating assets of the
Company are owned by the Company's subsidiaries. The Company relies primarily
on dividends from its subsidiaries to meet its obligations for payment of
principal and interest on its outstanding debt obligations and corporate
expenses. The Company is a legal entity separate and distinct from its
subsidiaries. Holders of Trust Debentures should look only to the Company for
payments on the Trust Debentures.
32
<PAGE>
Because the Company is a holding company, the right of the Company to
participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability
of holders of the Preferred Securities to benefit indirectly from such
distribution), is subject to the prior claims of creditors of that subsidiary,
except to the extent the Company may itself be recognized as a creditor of
that subsidiary. Accordingly, the Trust Debentures will be effectively
subordinated to all existing and future liabilities of the Company's
subsidiaries and all liabilities of any future subsidiaries of the Company.
The Debenture Indenture does not limit the incurrence or issuance of other
secured or unsecured debt of the Company or any subsidiary, including Senior
Indebtedness.
OPTION TO EXTEND INTEREST PAYMENT DATE
So long as no Debenture Event of Default has occurred and is continuing, the
Company will have the right under the Debenture Indenture at any time and from
time to time during the term of the Trust Debentures to defer the payment of
interest for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period; provided that no Extension Period shall end
on a date other than an Interest Payment Date or extend beyond the Stated
Maturity Date. At the end of such Extension Period, the Company must pay all
interest then accrued and unpaid (together with interest thereon at the rate
set forth in a Prospectus Supplement ("Compounded Interest")).
During any such Extension Period, the Company may not, and will not permit
any subsidiary of the Company to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (other than (a) dividends
or distributions in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Common Stock, (b) any declaration of a dividend in
connection with the implementation of a shareholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) as a result of a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company's capital stock, (d) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted
or exchanged, and (e) purchases of Common Stock related to the issuance of
Common Stock or rights under any of the Company's benefit plans for its
directors, officers or employees or any of the Company's dividend reinvestment
plans), (ii) make any payment of principal of, or premium, if any, or interest
on or repay, repurchase or redeem any debt securities of the Company
(including Other Debentures) that rank pari passu with or junior in right of
payment to the Trust Debentures or (iii) make any guarantee payments (other
than payments under the Guarantee) with respect to any guarantee by the
Company of the debt securities of any subsidiary of the Company (including
Other Guarantees) if such guarantee ranks pari passu with or junior in right
of payment to the Trust Debentures.
Prior to the termination of any such Extension Period, the Company may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods, end
on a date other than an Interest Payment Date or extend beyond the Stated
Maturity Date. Upon the termination of any such Extension Period and the
payment of all amounts then due on any Interest Payment Date, the Company may
elect to begin a new Extension Period, subject to the above requirements. No
interest shall be due and payable during an Extension Period, except at the
end thereof. The Company must give the Property Trustee, the Administrative
Trustees and the Debenture Trustee notice of its election of any Extension
Period (or an extension thereof) at least five Business Days prior to the
earlier of (i) the date the Distributions on the Trust Securities would have
been payable except for the election to begin or extend such Extension Period
or (ii) the date the Administrative Trustees are required to give notice to
any securities exchange or to holders of Capital Securities of the record date
or the date such Distributions are payable, but in any event not less than
five Business Days prior to such record date. The Property Trustee shall give
notice of the Company's election to begin or extend a new Extension Period to
the holders of the Preferred Securities. There is no limitation on the number
of times that the Company may elect to begin an Extension Period. Accordingly,
there could be multiple Extension Periods of varying lengths throughout the
term of the Trust Debentures.
33
<PAGE>
OPTIONAL PREPAYMENT
The Trust Debentures may be prepayable, in whole at any time or in part from
time to time, at the option of the Company at a prepayment price (the
"Optional Prepayment Price") to the extent and as set forth in an applicable
Prospectus Supplement.
SPECIAL EVENT PREPAYMENT
If a Special Event shall occur and be continuing, the Company may, at its
option, prepay the Trust Debentures in whole (but not in part) at any time
within 90 days of the occurrence of such Special Event, at a prepayment price
(the "Special Event Prepayment Price") equal to 100% of the principal amount
of the Trust Debentures to be redeemed plus accrued and unpaid interest
thereon (including Additional Sums, if any) to the date of redemption.
A "Special Event" means a Tax Event or an Investment Company Event.
"Investment Company Event" means the receipt by the Trust and the Company of
an opinion of counsel from counsel experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or a
written change (including any announced prospective change) in interpretation
or application of law or regulation by any legislative body, court,
governmental agency or regulatory authority, which amendment or change is
effective or which pronouncement or decision is announced on or after the date
of original issuance of the Preferred Securities, there is more than an
insubstantial risk that the Trust is or will be considered an "investment
company" that is required to be registered under the Investment Company Act,
which change or prospective change becomes effective or would become
effective, as the case may be, on or after the date of the original issuance
of the Preferred Securities.
A "Tax Event" means the receipt by the Company and the Trust of an opinion
of counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
amendment or change in any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or such pronouncement or decision is announced on or after
the Issue Date, there is more than an insubstantial risk that (i) the Trust
is, or will be within 90 days of the date of such opinion, subject to United
States federal income tax with respect to income received or accrued on the
Trust Debentures, (ii) interest payable by the Company on the Trust Debentures
is not, or within 90 days of the date of such opinion will not be, deductible
by the Company, in whole or in part, for United States federal income tax
purposes, or (iii) the Trust is, or will be within 90 days of the date of such
opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
Notice of any prepayment will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Trust Debentures to be
prepaid at its registered address. Unless the Company defaults in payment of
the prepayment price, on and after the prepayment date interest ceases to
accrue on such Trust Debentures called for prepayment.
ADDITIONAL SUMS
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Company will pay as
additional amounts on the Trust Debentures such additional amounts as may be
necessary in order that the amount of Distributions then due and payable by
the Trust on the outstanding Trust Securities shall not be reduced as a result
of any such additional taxes, duties and other governmental charges
("Additional Sums").
CERTAIN COVENANTS OF THE COMPANY
The Company covenants in the Debenture Indenture that if and so long as the
Trust is the holder of all Trust Debentures, the Company, as borrower, will
pay to the Trust all fees and expenses related to the Trust and
34
<PAGE>
the offering of the Trust Securities and will pay, directly or indirectly, all
ongoing costs, expenses and liabilities of the Trust (including any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States or any domestic taxing
authority upon the Trust but excluding obligations under the Trust
Securities).
The Company also covenants that it will not, and will not permit any
subsidiary of the Company to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock) (other than (a) dividends or distributions in shares of, or
options, warrants or rights to subscribe for or purchase shares of, Common
Stock, (b) any declaration of a dividend in connection with the implementation
of a shareholders' rights plan, or the issuance of stock under any such plan
in the future, or the redemption or repurchase of any such rights pursuant
thereto, (c) as a result of a reclassification of the Company's capital stock
or the exchange or conversion of one class or series of the Company's capital
stock for another class or series of the Company's capital stock, (d) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, and (e) purchases of Common Stock
related to the issuance of Common Stock or rights under any of the Company's
benefit plans for its directors, officers, employees or any of the Company's
dividend reinvestment plans), (ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities of
the Company (including Other Debentures) that rank pari passu with or junior
in right of payment to the Trust Debentures or (iii) make any guarantee
payments (other than payments under the Guarantee) with respect to any
guarantee by the Company of the debt securities of any subsidiary of the
Company (including under Other Guarantees) if such guarantee ranks pari passu
or junior in right of payment to the Trust Debentures, if at such time (1)
there shall have occurred any event of which the Company has actual knowledge
that (a) with the giving of notice or the lapse of time, or both, would be a
Debenture Event of Default and (b) in respect of which the Company shall not
have taken reasonable steps to cure, (2) a Debenture Event of Default shall
have occurred and be continuing, (3) if such Trust Debentures are held by the
Property Trustee, the Company shall be in default with respect to its payment
of any obligations under the Guarantee or (4) the Company shall have given
notice of its election of an Extension Period as provided in the Indenture, or
such Extension Period, or any extension thereof, shall have commenced and be
continuing.
So long as the Trust Securities remain outstanding, the Company also
covenants (i) to maintain 100% direct or indirect ownership of the Common
Securities; provided, however, that any successor of the Company permitted
under the Indenture may succeed to the Company's ownership of such Common
Securities, (ii) to use its reasonable efforts to cause the Trust (a) to
remain a business trust, except in connection with the distribution of Trust
Debentures to the holders of Trust Securities in liquidation of the Trust, the
redemption of all of the Trust Securities, or certain mergers, consolidations
or amalgamations, each as permitted by the Trust Agreement, and (b) to
otherwise continue to be treated as a grantor trust for United States federal
income tax purposes and (iii) to use its reasonable efforts to cause each
holder of Trust Securities to be treated as owning an undivided beneficial
interest in the Trust Debentures.
MODIFICATION OF INDENTURE
From time to time the Company and the Debenture Trustee may, without the
consent of the holders of Trust Debentures, amend the Debenture Indenture for
specified purposes, including, among other things, to cure any ambiguity or to
correct or supplement any provision contained in the Debenture Indenture or
any supplemental indenture which is defective or inconsistent with any other
provision contained therein (provided that any such action does not materially
adversely affect the interest of the holders of Trust Debentures) and
qualifying, or maintaining the qualification of, the Debenture Indenture under
the Trust Indenture Act. The Debenture Indenture contains provisions
permitting the Company and the Debenture Trustee, with the consent of the
holders of a majority in aggregate principal amount of Trust Debentures, to
amend the Debenture Indenture in a manner affecting the rights of the holders
of Trust Debentures; provided that no such modification may, without the
consent of the holders of each outstanding Trust Debenture so affected, (i)
change the Stated Maturity, or reduce the rate of interest (including
Compounded Interest) or extend the time of payment of interest thereon except
35
<PAGE>
pursuant to the Company's right under the Debenture Indenture to defer the
payment of interest as provided therein (see "--Option to Extend Interest
Payment Date") or reduce the principal amount of, or the amount of premium on,
the Trust Debentures or reduce the amount payable on redemption thereof or
make the principal of, or interest or premium on, the Trust Debentures payable
in any coin or currency other than that provided in the Trust Debentures, or
impair or affect the right of any holder of Trust Debentures to institute suit
for the payment thereof, (ii) modify the provisions of the Indenture with
respect to the subordination of the Trust Debentures in a manner adverse to
the holders, (iii) reduce the percentage of principal amount of Trust
Debentures, the holders of which are required to consent to any such
modification of the Debenture Indenture, or are required to consent to any
waiver provided for in the Debenture Indenture or (iv) modify certain other
provisions of the Debenture Indenture relating to amendments and waivers of
holders; provided, however, that if the Trust Debentures are held by the
Trust, such amendment shall not be effective until the holders of a majority
in liquidation amount of the Trust Securities shall have consented to the
amendment; and provided, further, that if the consent of the holders of each
Trust Security is required, such amendment will not be effective until each
holder of the Trust Securities has consented to such amendment.
DEBENTURE EVENTS OF DEFAULT
The Debenture Indenture provides that any one or more of the following
described events with respect to the Trust Debentures constitute a "Debenture
Event of Default" (whatever the reason for such Debenture Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(i) failure to pay any interest (including Compounded Interest and
Additional Sums, if any) on the Trust Debentures or any Other Debentures,
when due and the continuance of such failure for 30 days (subject to the
deferral of any due date in the case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on the Trust
Debentures or any Other Debentures when due whether at maturity, upon
redemption, by declaration of acceleration of maturity or otherwise; or
(iii) failure to perform, or breach of, any other covenant or warranty of
the Company contained in the Indenture for 90 days after written notice to
the Company from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of Trust Debentures; or
(iv) certain events of bankruptcy, insolvency or reorganization of the
Company.
Within five Business Days after the occurrence of a Debenture Event of
Default actually known to the Indenture Trustee, the Indenture Trustee shall
transmit notice of such Indenture Event of Default to the Debenture holders,
unless such Indenture Event of Default shall have been cured or waived. The
Debenture Indenture requires the annual filing by the Company with the
Debenture Trustee of a certificate as to the absence of certain defaults under
the Indenture.
The holders of a majority in aggregate outstanding principal amount of the
Trust Debentures have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee or
to exercise any trust or power conferred upon the Debenture Trustee under the
Debenture Indenture. If a Debenture Event of Default has occurred and is
continuing, the Debenture Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of the Trust Debentures may declare the
principal amount on all Trust Debentures due and payable immediately upon a
Debenture Event of Default and should the Debenture Trustee or such holders of
Trust Debentures fail to make such declaration, the holders of not less than
25% in aggregate Liquidation Amount of the Preferred Securities shall have
such right. The holders of a majority in aggregate outstanding principal
amount of the Trust Debentures may annul such declaration and waive the
default if the default (other than the non-payment of the principal of the
Trust Debentures which has become due solely by such acceleration) has been
cured and a sum sufficient to pay all matured installments of interest
(including Compounded Interest and Additional Sums, if any) and principal of,
and premium, if any, due otherwise than by acceleration (with any Compounded
Interest due thereon) has been deposited with the
36
<PAGE>
Debenture Trustee, and should the holders of such Trust Debentures fail to
annul such declaration and waive such default, the holders of a majority in
aggregate Liquidation Amount of the Preferred Securities shall have such
right.
Prior to the declaration accelerating the maturity of the Trust Debentures,
the holders of a majority in aggregate outstanding principal amount of the
Trust Debentures may, on behalf of the holders of all the Trust Debentures,
waive any past default or Debenture Event of Default and its consequences,
except a default in the payment of principal (or premium, if any) on or
interest (unless such default has been cured and a sum sufficient to pay all
matured installments of interest (and premium, if any) and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee)
(including Compounded Interest and Additional Sums, if any) or a default in
respect of a covenant or provision which under the Debenture Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Trust Debenture affected, and should the holders of such Trust Debentures fail
to waive such default, the holders of a majority in aggregate Liquidation
Amount of the Preferred Securities shall have such right.
In case a Debenture Event of Default shall occur and be continuing, the
Property Trustee will have the right to declare the principal of and the
interest on such Trust Debentures and any other amounts payable under the
Debenture Indenture, to be forthwith due and payable and to enforce its other
rights as a creditor with respect to such Trust Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Debenture Event of Default shall have occurred and be continuing and
shall be attributable to the failure of the Company to pay the principal of
(or premium, if any), or interest (including Compounded Interest and
Additional Sums, if any) on the Trust Debentures on the date such payment is
otherwise required, a holder of Preferred Securities may institute a Direct
Action. The Company may not amend the Debenture Indenture to remove the
foregoing right to bring a Direct Action without the prior written consent of
the holders of all of the Preferred Securities. Notwithstanding any payments
made to a holder of Preferred Securities by the Company in connection with a
Direct Action, the Company shall remain obligated to pay the principal of (or
premium, if any) or interest (including Compounded Interest and Additional
Sums, if any) on the Trust Debentures, and the Company shall be subrogated to
the rights of the holder of such Preferred Securities with respect to payments
on the Preferred Securities to the extent of any payments made by the Company
to such holder in any Direct Action.
The holders of the Preferred Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Trust Debentures unless there shall have been
an Event of Default under the Trust Agreement. See "Description of Preferred
Securities--Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Debenture Indenture provides that the Company shall not consolidate with
or merge into any other Person or convey, transfer or lease its properties as
an entirety or substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Company or convey, transfer or lease its
properties as an entirety or substantially as an entirety to the Company,
unless: (i) in case the Company consolidates with or merges into another
Person or conveys, transfers or leases its properties substantially as an
entirety to any Person, the successor Person is organized and existing under
the laws of the United States or any State or the District of Columbia, and
such successor Person expressly assumes the Company's obligations on the Trust
Debentures and the Indenture; (ii) immediately after giving effect thereto, no
Debenture Event of Default, and no event which, after notice or lapse of time
or both, would become a Debenture Event of Default, shall have occurred and be
continuing; and (iii) certain other conditions as prescribed in the Indenture
are met.
SATISFACTION AND DISCHARGE
The Debenture Indenture provides that when, among other things, all Trust
Debentures not previously cancelled or delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will
37
<PAGE>
become due and payable at maturity or called for redemption within one year,
and the Company deposits or causes to be deposited with the Debenture Trustee
funds, in trust, for the purpose and in an amount sufficient to pay on the
Stated Maturity Date or upon redemption of all the Trust Debentures not
previously delivered to the Debenture Trustee for cancellation, the principal
(and premium, if any) and interest (including Compounded Interest and
Additional Sums, if any) due or to become due on the Stated Maturity Date, or
the redemption date, as the case may be, then the Debenture Indenture will
cease to be of further effect (except as to the Company's obligations to pay
all other sums due pursuant to the Debenture Indenture and to provide the
officers' certificates and opinions of counsel described therein), and the
Company will be deemed to have satisfied and discharged the Debenture
Indenture.
FORM, REGISTRATION AND TRANSFER
If the Trust Debentures are distributed to the holders of the Trust
Securities, the Trust Debentures may be represented by one or more global
certificates registered in the name of the DTC or its nominee. Under such
circumstances, the depositary arrangements for the Trust Debentures would be
expected to be substantially similar to those in effect for the Preferred
Securities. For a description of DTC and the terms of the depositary
arrangements relating to payments, transfers, voting rights, redemptions and
other notices and other matters, see "Description of Preferred Securities--
Form, Denomination, Book-Entry Procedures and Transfer" and "--Depositary
Procedures."
PAYMENT AND PAYING AGENTS
Payment of principal of (and premium, if any) and interest on Trust
Debentures will be made at the office of the Debenture Trustee in Wilmington,
Delaware or at the office of such Paying Agent or Paying Agents as the Company
may designate from time to time, except that at the option of the Company
payment of any interest may be made, except in the case of Trust Debentures in
global form, (i) by check mailed to the address of the holder thereof as such
address shall appear in the register for Trust Debentures or (ii) by transfer
to an account maintained by the holder thereof, provided that proper transfer
instructions have been received by the relevant Record Date. Payment of any
interest on any Trust Debenture will be made to the Person in whose name such
Trust Debenture is registered at the close of business on the Record Date for
such interest, except in the case of defaulted interest. The Company may at
any time designate additional Paying Agents or rescind the designation of any
Paying Agent; however the Company will at all times be required to maintain a
Paying Agent in each place of payment for the Trust Debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent for the
payment of the principal of (and premium, if any) or interest on any Trust
Debenture and remaining unclaimed for two years after such principal (and
premium, if any) or interest has become due and payable shall, at the request
of the Company, be repaid to the Company and the holder of such Trust
Debenture shall thereafter look, as a general unsecured creditor, only to the
Company for payment thereof.
GOVERNING LAW
The Indenture and the Trust Debentures will be governed by and construed in
accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee is subject to all the duties and responsibilities
specified with respect to an indenture trustee under the Trust Indenture Act.
Subject to such provisions, the Debenture Trustee is under no obligation to
exercise any of the powers vested in it by the Indenture at the request of any
holder of Trust Debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be incurred thereby.
The Debenture Trustee is not required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its duties
if the Debenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it. The First National Bank of Chicago
will serve as Debenture Trustee. See "Description of Preferred Securities--
Information Concerning the Property Trustee."
38
<PAGE>
DESCRIPTION OF GUARANTEE
Set forth below is a summary of information concerning the Guarantee, which
will be executed and delivered by the Company for the benefit of the holders
from time to time of Preferred Securities. The Guarantee will be qualified
under the Trust Indenture Act. The First National Bank of Chicago, as the
Guarantee Trustee, will hold the Guarantee for the benefit of the holders of
the Preferred Securities. The following summary is not necessarily complete,
and reference is hereby made to the copy of the form of the Guarantee
(including the definitions therein of certain terms), which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part,
and to the Trust Indenture Act. Whenever particular defined terms of the
Guarantee are referred to in this Prospectus, such defined terms are
incorporated herein by reference.
GENERAL
The Company will irrevocably and unconditionally agree to pay in full on a
subordinated basis, to the extent set forth herein, the Guarantee Payments (as
defined below) to the holders of the Preferred Securities, as and when due,
regardless of any defense, right of set-off or counterclaim that the Trust may
have or assert other than the defense of payment. The following payments with
respect to the Preferred Securities, to the extent not paid by or on behalf of
the Trust (the "Guarantee Payments"), will be subject to the Guarantee: (i)
any accumulated and unpaid Distributions required to be paid on the Preferred
Securities, to the extent that the Trust has funds on hand legally available
therefor at such time, (ii) the applicable Redemption Price with respect to
the Preferred Securities called for redemption, to the extent that the Trust
has funds on hand legally available therefor at such time and (iii) upon a
voluntary or involuntary dissolution, winding-up or liquidation of the Trust
(other than in connection with the distribution of the Trust Debentures to
holders of the Preferred Securities), the lesser of (a) the Liquidation
Distribution, to the extent the Trust has funds legally available therefor at
the time, and (b) the amount of assets of the Trust remaining available for
distribution to holders of Preferred Securities after satisfaction of
liabilities to creditors of the Trust as required by applicable law. The
Company's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Company to the holders of the Preferred
Securities or by causing the Trust to pay such amounts to such holders.
The Guarantee will be a guarantee of the Guarantee Payments with respect to
the Preferred Securities from the time of issuance of the Preferred
Securities, but will not apply to Distributions and other payments on the
Preferred Securities when the Trust does not have sufficient funds legally and
immediately available to make such Distributions or other payments. Therefore,
if the Company does not make interest payments on the Trust Debentures held by
the Property Trustee, the Trust will not make Distributions on the Preferred
Securities.
The Guarantee will rank subordinate and junior in right of payment to all
Senior Indebtedness to the extent provided therein. See "--Status of the
Guarantee." Because the Company is a holding company, the right of the Company
to participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise is subject to the
prior claims of creditors of that subsidiary, except to the extent the Company
may itself be recognized as a creditor of that subsidiary. Accordingly, the
Company's obligations under the Guarantee effectively will be subordinated to
all existing and future liabilities of the Company's subsidiaries and all
liabilities of any future subsidiaries of the Company. Claimants should look
only to the Company for payments under the Guarantee. See "Description of the
Trust Debentures--Subordination." The Guarantee does not limit the incurrence
or issuance of other secured or unsecured debt of the Company or any
subsidiary of the Company, including Senior Indebtedness, whether under the
Indenture, any other indenture that the Company may enter into in the future
or otherwise.
The Company will, through the Guarantee, the Trust Agreement, the Trust
Debentures and the Debenture Indenture, taken together, fully, irrevocably and
unconditionally guarantee all of the Trust's obligations under the Preferred
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only
the combined operation of these documents that has the effect of providing a
full, irrevocable and unconditional guarantee of the Trust's obligations under
the Preferred Securities. See "Relationship Among the Preferred Securities,
the Trust Debentures and the Guarantee."
39
<PAGE>
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all Senior
Indebtedness in the same manner as the Trust Debentures. See "Description of
Trust Debentures--Subordination."
The Guarantee will rank pari passu with all Other Guarantees issued by the
Company after the Issue Date with respect to preferred securities (if any)
issued by Other Trusts. The Guarantee will constitute a guarantee of payment
and not of collection (i.e., the guaranteed party may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against any other
person or entity). The Guarantee will be held for the benefit of the holders
of the Preferred Securities. The Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the Trust
or upon distribution to the holders of the Preferred Securities of the Trust
Debentures. The Guarantee does not place a limitation on the amount of
additional Senior Indebtedness that may be incurred by the Company.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder;
provided, however, that with respect to a default other than a default in
payment of any Guarantee Payment, the Company shall have received notice of
such default and shall not have cured such default within 60 days after
receipt of such notice. The holders of not less than a majority in Liquidation
Amount of the Preferred Securities will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of the Guarantee or to direct the exercise of any
trust or power conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Trust, the Guarantee Trustee
or any other person or entity.
The Company, as guarantor, will be required to file annually with the
Guarantee Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of the Preferred Securities (in which case no vote will
be required), the Guarantee may only be amended with the prior approval of the
holders of a majority of the Liquidation Amount of such outstanding Preferred
Securities. The manner of obtaining any such approval will be as set forth
under "Description of Preferred Securities--Voting Rights; Amendment of the
Trust Agreement." All guarantees and agreements contained in the Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Company and shall inure to the benefit of the holders of the Preferred
Securities then outstanding.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon (i)
full payment of the applicable Redemption Price of the Preferred Securities or
(ii) upon liquidation of the Trust, the full payment of the Liquidation
Distribution or the distribution of the Trust Debentures to the holders of the
Preferred Securities. The Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of the Preferred
Securities must restore payment of any sums paid under the Preferred
Securities or the Guarantee.
40
<PAGE>
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of a
default by the Company in performance of the Guarantee, will undertake to
perform only such duties as are specifically set forth in the Guarantee and,
in case a default with respect to the Guarantee has occurred, must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this provision, the
Guarantee Trustee will be under no obligation to exercise any of the powers
vested in it by the Guarantee at the request of any holder of the Preferred
Securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE
TRUST DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent the Trust has funds on hand legally available for the payment
of such Distributions) are irrevocably guaranteed by the Company as and to the
extent set forth under "Description of Guarantee." Taken together, the
Company's obligations under the Trust Debentures, the Debenture Indenture, the
Trust Agreement and the Guarantee provide, in the aggregate, a full,
irrevocable and unconditional guarantee of payments of Distributions and other
amounts due on the Preferred Securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Trust's obligations under the Preferred
Securities. If and to the extent that the Company does not make the required
payments on the Trust Debentures, the Trust will not have sufficient funds to
make the related payments, including Distributions, on the Preferred
Securities. The Guarantee will not cover any such payment when the Trust does
not have sufficient funds on hand legally available therefor. In such event,
the remedy of a holder of Preferred Securities is to institute a Direct
Action. The obligations of the Company under the Guarantee are subordinate and
junior in right of payment to all Senior Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Trust Debentures, such payments will be sufficient to cover Distributions and
other payments due on the Trust Securities, primarily because: (i) the
aggregate principal amount or Prepayment Price of the Trust Debentures is
equal to the sum of the Liquidation Amount or Redemption Price, as applicable,
of the Trust Securities; (ii) the interest rate and interest and other payment
dates on the Trust Debentures will match the Distribution rate and
Distribution and other payment dates for the Trust Securities; (iii) the
Company, as Sponsor, shall pay for all and any costs, expenses and liabilities
of the Trust except the Trust's obligations to holders of Trust Securities
under such Trust Securities; and (iv) the Trust Agreement will provide that
the Trust is not authorized to engage in any activity that is not consistent
with the limited purposes thereof.
Notwithstanding anything to the contrary in the Debenture Indenture, the
Company has the right to set-off any payment it is otherwise required to make
thereunder with and to the extent the Company has theretofore made, or is
concurrently on the date of such payment making, a payment under the
Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any Preferred Security may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, the Trust or any
other person or entity.
41
<PAGE>
LIMITED PURPOSE OF THE TRUST
The Preferred Securities represent preferred undivided beneficial interests
in the assets of the Trust, and the Trust exists for the sole purpose of (i)
issuing and selling the Trust Securities, (ii) using the proceeds from the
sale of the Trust Securities to acquire the Trust Debentures, and (iii) and
engaging in only those other activities necessary, advisable or incidental
thereto. A principal difference between the rights of a holder of a Preferred
Security and a holder of a Trust Debenture is that a holder of a Trust
Debenture will be entitled to receive from the Company the principal amount of
(and premium, if any) and interest on Trust Debentures held, while a holder of
Preferred Securities is entitled to receive Distributions from the Trust (or,
in certain circumstances, from the Company under the Guarantee) if and to the
extent the Trust has funds on hand legally available for the payment of such
Distributions.
RIGHTS UPON DISSOLUTION
Unless the Trust Debentures are distributed to holders of the Trust
Securities, upon any voluntary or involuntary dissolution and liquidation of
the Trust, after satisfaction of liabilities to creditors of the Trust as
required by applicable law, the holders of the Trust Securities will be
entitled to receive, out of assets held by the Trust, the Liquidation
Distribution in cash. See "Description of Preferred Securities--Liquidation of
the Trust and Distribution of Trust Debentures." Upon any voluntary or
involuntary liquidation or bankruptcy of the Company, the Property Trustee, as
holder of the Trust Debentures, would be a subordinated creditor of the
Company, subordinated in right of payment to all Senior Indebtedness as set
forth in the Debenture Indenture, but entitled to receive payment in full of
principal (and premium, if any) and interest, before any stockholders of the
Company receive payments or distributions. Since the Company will be the
guarantor under the Guarantee and will agree to pay for all costs, expenses
and liabilities of the Trust (other than the Trust's obligations to the
holders of its Trust Securities), the positions of a holder of Preferred
Securities and a holder of Trust Debentures relative to other creditors and to
stockholders of the Company in the event of liquidation or bankruptcy of the
Company are expected to be substantially the same.
42
<PAGE>
DESCRIPTION OF COMMON STOCK AND PREFERRED STOCK
The Company's authorized capital stock consists of 400,000,000 shares of
Common Stock, par value $0.01 per share, and 50,000,000 shares of Preferred
Stock, par value $0.01 per share. The summary description of the capital stock
of the Company contained herein is necessarily general and reference should be
made in each case to the Company's Restated Certificate of Incorporation, as
amended, and Amended and Restated Bylaws, which are exhibits to the
Registration Statement of which this Prospectus is a part.
COMMON STOCK
General. As of July 15, 1998, an aggregate of 152,695,271 shares of Common
Stock were issued and outstanding. Subject to any prior rights of the
Preferred Stock then outstanding, holders of Common Stock are entitled to
receive such dividends as are declared by the Board of Directors out of funds
legally available therefor. Subject to the voting rights, if any, of the
Preferred Stock, all voting rights are vested in the holders of shares of
Common Stock, each share being entitled to one vote. The holders of Common
Stock are not entitled to cumulative voting rights in the election of
directors. In the event of the liquidation, dissolution or winding up of the
Company, holders of Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities and any preferential amount to which
the holders of Preferred Stock are entitled. The holders of Common Stock have
no preemptive or conversion rights and are not subject to further calls or
assessments by the Company. The Common Stock currently outstanding is, and the
Common Stock to be issued hereunder will be, fully paid and nonassessable.
The transfer agent and registrar for the Common Stock of the Company is
ChaseMellon Shareholder Services, L.L.C.
Board of Directors; Stockholders Agreement. BG plc, Chevron and NOVA
Corporation each own approximately 25.4% of the outstanding shares of Common
Stock. Pursuant to a stockholders agreement dated August 31, 1996 (the
"Stockholders Agreement"), such parties have agreed to vote their Common
Stock, subject to certain conditions, to cause the Board of Directors to
consist of thirteen directors to be nominated as follows: (i) each of the BG
Group, NOVA Group and Chevron Group (as such terms are defined in the
Stockholders Agreement) may nominate: (A) three directors as long as such
stockholder remains a Class A Group (as defined below); (B) two directors as
long as such stockholder remains a Class B Group (as defined below); and (C)
one director as long as such stockholder remains a Class C Group (as defined
below); (ii) two members shall be officers of Dynegy nominated by the Board of
Directors; (iii) two members shall be independent directors nominated by the
Board of Directors; and (iv) all other members, if any, shall be nominated and
elected in accordance with applicable law.
Pursuant to the Stockholders Agreement: (i) a "Class A Group" is defined as
a Group (as defined in the Stockholders Agreement), that owns collectively at
least 34,760,890 shares of Common Stock; (ii) a "Class B Group" is defined as
a Group that owns collectively at least 23,173,926 shares of Common Stock but
less than 34,760,890 shares of Common Stock; and (iii) a "Class C Group" is
defined as a Group that owns collectively at least 11,586,963 shares of Common
Stock but less than 23,173,926 shares of Common Stock. Currently, each of the
BG Group, NOVA Group and Chevron Group is a Class A Group under the
Stockholders Agreement, and, therefore, entitled to designate three directors
to serve on the Board of Directors based on its ownership of Common Stock.
PREFERRED STOCK
General. The following description of the terms of the Preferred Stock sets
forth certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain terms of a series of the Preferred
Stock offered by any Prospectus Supplement will be described in the Prospectus
Supplement relating to such series of the Preferred Stock. If so indicated in
the Prospectus Supplement, the terms of any such series may differ from the
terms set forth below. The following description of the Preferred Stock
43
<PAGE>
summarizes certain provisions of the Company's Restated Certificate of
Incorporation filed as an exhibit to the Registration Statement to which this
Prospectus relates and is subject to and qualified in its entirety by
reference to the Restated Certificate of Incorporation and the statement of
designations that will be filed with the Commission promptly after the
offering of such series of Preferred Stock.
General. Under the Company's Restated Certificate of Incorporation, the
Board of Directors is authorized, without further shareholder action, to
provide for the issuance of up to 50,000,000 shares of Preferred Stock in one
or more series, with such voting powers, or without voting powers, and with
such designations and relative rights and preferences as shall be set forth in
resolutions providing for the issuance thereof adopted by the Board of
Directors. As of July 15, 1998, an aggregate of 7,815,363 shares of Preferred
Stock were issued and outstanding. See "--Series A Participating Preferred
Stock." No other shares of Preferred Stock are issued, outstanding or
designated as to series. It is not possible to state the actual effect of the
authorization and issuance of a new series of Preferred Stock upon the rights
of holders of the Common Stock and other series of Preferred Stock unless and
until the Board of Directors determines the attributes of such new series of
Preferred Stock and the specific rights of its holders. Such effects might
include, however, (i) restrictions on dividends on Common Stock and other
series of Preferred Stock if dividends on such new series of Preferred Stock
have not been paid; (ii) dilution of the voting power of Common Stock and
other series of Preferred Stock to the extent that such new series of
Preferred Stock has voting rights, or to the extent that any such new series
of Preferred Stock is convertible into Common Stock; (iii) dilution of the
equity interest of Common Stock and other series of Preferred Stock; and (iv)
limitation on the right of holders of Common Stock and other series of
Preferred Stock to share in the Company's assets upon liquidation until
satisfaction of any liquidation preference attributable to such new series of
Preferred Stock.
The Preferred Stock will have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in the Prospectus
Supplement relating to a particular series of the Preferred Stock. Reference
is made to the Prospectus Supplement relating to the particular series of the
Preferred Stock offered thereby for specific terms, including: (i) the
designation of such Preferred Stock, the number of shares offered and the
liquidation value thereof; (ii) the price at which such Preferred Stock will
be issued; (iii) the dividend rate (or method of calculation), the dates on
which dividends shall be payable, whether such dividends shall be cumulative
or noncumulative and, if cumulative, the dates from which dividends shall
commence to accumulate; (iv) the liquidation preference thereof; (v) any
redemption or sinking fund provisions; (vi) any conversion or exchange
provisions of such Preferred Stock; and (vii) any additional dividend,
liquidation, redemption, sinking fund and other rights, preferences,
limitations and restrictions of such Preferred Stock.
The Preferred Stock will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the Prospectus Supplement relating to a
particular series of the Preferred Stock, each series of the Preferred Stock
will rank on a parity as to dividends and distributions in the event of a
liquidation with each other series of the Preferred Stock, if any. Holders of
Preferred Stock will have no preemptive rights to subscribe for or purchase
shares of capital stock.
Dividend Rights. Holders of the Preferred Stock of each series will be
entitled to receive, when, as and if declared by the Board of Directors, out
of assets of the Company legally available therefor, cash dividends at such
rates and on such dates as are set forth in the Prospectus Supplement relating
to such series of the Preferred Stock. Such rate may be fixed or variable or
both. Each such dividend will be payable to the holders of record as they
appear on the stock books of the Company on such record dates as will be fixed
by the Board of Directors or a duly authorized committee thereof. Dividends on
any series of the Preferred Stock may be cumulative or noncumulative, as
provided in the Prospectus Supplement relating thereto. If the Board of
Directors fails to declare a dividend payable on a dividend payment date on
any series of Preferred Stock for which dividends are noncumulative, then the
right to receive a dividend in respect of the dividend period ending on such
dividend payment date will be lost, and the Company shall have no obligation
to pay the dividend accrued for that period, whether or not dividends are
declared for any future period.
No full dividends will be declared or paid or set apart for payment on
preferred stock of any series ranking, as to dividends, on a parity with or
junior to any series of Preferred Stock for any period unless full dividends
44
<PAGE>
have been or contemporaneously are declared and paid, or declared and a sum
sufficient for the payment thereof set apart for such payment on such series
of Preferred Stock for the then-current dividend period and, if such Preferred
Stock is cumulative, all other dividend periods terminating on or before the
date of payment of such full dividends. When dividends are not paid in full
upon any series of the Preferred Stock and any other preferred stock ranking
on a parity as to dividends with such series of the Preferred Stock, all
dividends declared upon such series of the Preferred Stock and any other
preferred stock ranking on a parity as to dividends will be declared pro rata
so that the amount of dividends declared per share on such series of the
Preferred Stock and such other preferred stock will in all cases bear to each
other the same ratio that accrued dividends, including, in the case of
cumulative Preferred Stock, accumulations, if any, in respect of prior
dividend periods, per share on such series of the Preferred Stock and such
other preferred stock bear to each other. Except as provided in the preceding
sentence, unless full dividends, including, in the case of cumulative
Preferred Stock, accumulations, if any, in respect of prior dividend periods,
on all outstanding shares of any series of the Preferred Stock have been paid
or declared and set aside for payment, no dividends (other than a dividend or
distribution paid in shares of, or warrants, rights or options exercisable for
or convertible into, Common Stock or another stock ranking junior to such
series of the Preferred Stock as to dividends and upon liquidation) will be
declared or paid or set aside for payment or other distributions made upon the
Common Stock or any other stock of the Company ranking junior to or on a
parity with the Preferred Stock as to dividends or upon liquidation, nor will
any Common Stock or any other stock of the Company ranking junior to or on a
parity with such series of the Preferred Stock as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Company (except by
conversion into or exchange for stock of the Company ranking junior to such
series of the Preferred Stock as to dividends and upon liquidation). No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments which may be in arrears.
Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the holders of each
series of Preferred Stock will be entitled to receive out of assets of the
Company available for distribution to stockholders, before any distribution of
assets is made to holders of Common Stock or any other class of stock ranking
junior to such series of the Preferred Stock upon liquidation, liquidating
distributions in the amount set forth in the Prospectus Supplement relating to
such series of the Preferred Stock plus an amount equal to accrued and unpaid
dividends for the then-current dividend period and, if such series of the
Preferred Stock is cumulative, for all dividend periods prior thereto. If,
upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, the amounts payable with respect to the Preferred Stock of any
series and any other shares of stock of the Company ranking as to any such
distribution on a parity with such series of the Preferred Stock are not paid
in full, the holders of the Preferred Stock of such series and of such other
shares will share ratably in any such distribution of assets of the Company in
proportion to the full respective preferential amounts to which they are
entitled. After payment of the full amount of the liquidating distribution to
which they are entitled, the holders of such series of Preferred Stock will
have no right or claim to any of the remaining assets of the Company. Neither
the sale of all or substantially all the property or business of the Company
nor the merger or consolidation of the Company into or with any other
corporation shall be deemed to be a dissolution, liquidation or winding up,
voluntary or involuntary, of the Company.
Redemption. A series of the Preferred Stock may be redeemable, in whole or
in part, at the option of the Company, and may be subject to mandatory
redemption pursuant to a sinking fund, in each case upon terms, at the times
and at the redemption prices set forth in the Prospectus Supplement relating
to such series.
The Prospectus Supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such
series of Preferred Stock that will be redeemed by the Company in each year
commencing after a date to be specified, at a redemption price per share to be
specified, together with an amount equal to any accrued and unpaid dividends
thereon to the date of redemption. The redemption price may be payable in
cash, capital stock or in cash received from the net proceeds of the issuance
of capital stock of the Company, as specified in the Prospectus Supplement
relating to such series of Preferred Stock.
If fewer than all the outstanding shares of any series of the Preferred
Stock are to be redeemed, whether by mandatory or optional redemption, the
selection of the shares to be redeemed will be determined by lot or pro
45
<PAGE>
rata as may be determined by the Board of Directors or a duly authorized
committee thereof, or by any other method which may be determined by the Board
of Directors or such committee to be equitable. From and after the date of
redemption (unless default shall be made by the Company in providing for the
payment of the redemption price), dividends shall cease to accrue on the
shares of Preferred Stock called for redemption and all rights of the holders
thereof (except the right to receive the redemption price) shall cease.
In the event that full dividends, including accumulations in the case of
cumulative Preferred Stock, on any series of the Preferred Stock have not been
paid, such series of the Preferred Stock may not be redeemed in part and the
Company may not purchase or acquire any shares of such series of the Preferred
Stock otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of such series of the Preferred Stock.
Conversion or Exchange Rights. The Prospectus Supplement for any series of
the Preferred Stock will state the terms, if any, on which shares of such
series are convertible into, or exchangeable for, securities of the Company or
another person.
Voting Rights. Unless otherwise determined by the Board of Directors and
indicated in the Prospectus Supplement relating to a particular series of
Preferred Stock, the holders of the Preferred Stock will not be entitled to
vote, except as set forth below or except as expressly required by applicable
law. In the event the Company issues share of any series of Preferred Stock
with voting rights, including any voting rights in the case of dividend
arrearages, unless otherwise specified in the Prospectus Supplement relating
to a particular series of Preferred Stock, each such share will be entitled to
one vote on matters on which holders of such series of the Preferred Stock are
entitled to vote. In the case of any series of Preferred Stock having one vote
per share on matters on which holders of such series are entitled to vote, the
voting power of such series, on matters on which holders of such series and
holders of other series of preferred stock are entitled to vote as a single
class, will depend on the number of shares in such series, not on the
aggregate liquidation preference or initial offering price of the shares of
such series of Preferred Stock.
Series A Participating Preferred Stock. As of July 15, 1998, the Company had
issued and outstanding 7,815,363 shares of Series A Participating Preferred
Stock, all of which are held by Chevron. Except as provided by law, holders of
the Series A Participating Preferred Stock are not entitled to voting rights.
Subject to certain anti-dilutive adjustments in the event of
reclassification of the Common Stock, the holders of Series A Participating
Preferred Stock are entitled to receive dividends or distributions equal per
share in amount and kind to any dividend or distribution payable on shares of
Common Stock, when and as the same are declared by the Board of Directors out
of any funds legally available therefor and paid to the holders of Common
Stock, and no dividend may be declared and paid on Common Stock unless an
identical dividend or distribution is declared and paid concurrently on Series
A Participating Preferred Stock.
In the event of any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, no distribution shall be made to the holders
of Common Stock or any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Participating
Preferred Stock unless, prior thereto, the holders of the Series A Preferred
Stock shall have received $1.00 per share. At the option of the holder, each
share of Series A Participating Preferred Stock may be converted, subject to
certain adjustments, into one share of Common Stock (i) (a) in order to avoid
dilution of the holder's percentage ownership of the issued Common Stock,
provided that, with respect to dilution resulting from the issuance of
additional compensatory options as approved by not less than 85% of the entire
Board of Directors, the holder would have no such conversion right so long as
its ownership of Common Stock would still be greater than 20% of the Common
Stock, or (b) to maintain a percentage ownership of the issued Common Stock at
least equal to that of the then largest other stockholder of the Company; (ii)
if any entity other than the holder of the Series A Participating Preferred
Stock or an affiliate of such holder makes a tender offer for the Common Stock
and such holder tenders the shares of the Series A Participating Preferred
Stock in the same proportion as it tenders Common Stock; (iii) upon approval
by the stockholders of the Company of any merger or recapitalization proposal
in which the Series A
46
<PAGE>
Participating Preferred Stock would be treated differently than Common Stock,
and (iv) upon approval by the stockholders of the Company of any (a) sale of
all or substantially all of the assets of the Company or (b) liquidation,
dissolution or winding up of the Company.
DEPOSITARY SHARES
General. The Company may, at its option, elect to offer fractional shares of
Preferred Stock, rather than full shares of Preferred Stock. In such event,
the Company will issue to the public receipts for Depositary Shares, each of
which will represent a fraction (to be set forth in the Prospectus Supplement
relating to a particular series of Preferred Stock) of a share of a particular
series of Preferred Stock as described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") between
the Company and a bank or trust company selected by the Company having its
principal office in the United States and having a combined capital and
surplus of at least $50,000,000 (the "Depositary"). Subject to the terms of
the Deposit Agreement, each owner of a Depositary Share will be entitled, in
proportion to the applicable fraction of a share of Preferred Stock
represented by such Depositary Share, to all the rights and preferences of the
Preferred Stock represented thereby (including dividend, voting, redemption an
liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of
Preferred Stock in accordance with the terms of the offering. Copies of the
forms of Deposit Agreement and Depositary Receipt are filed as exhibits to the
Registration Statement of which this Prospectus is a part, and the following
summary is qualified in its entirety by reference to such exhibits.
If required by law or applicable securities exchange rules, engraved
Depositary Receipts will be prepared. Pending the preparation of definitive
engraved Depositary Receipts, the Depositary may, upon the written order of
the Company, issue temporary Depositary Receipts substantially identical to
(and entitling the holders thereof to all the rights pertaining to) the
definitive Depositary Receipts but not in definitive form. Definitive
Depositary Receipts will be prepared thereafter without unreasonable delay,
and temporary Depositary Receipts will be exchangeable for definitive
Depositary Receipts at the Company's expense.
Dividends and Other Distributions. The Depositary will distribute all cash
dividends or other cash distributions received in respect of the Preferred
Stock to the record holders of Depositary Shares relating to such Preferred
Stock in proportion to the number of such Depositary Shares owned by such
holders.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
Redemption of Depositary Shares. If a series of preferred Stock represented
by Depositary Shares is subject to redemption, the Depositary Shares will be
redeemed from the proceeds received by the Depositary resulting from the
redemption, in whole or in part, of such series of Preferred Stock held by the
Depositary. The redemption price per Depositary Share will be equal to the
applicable fraction of their redemption price per share payable with respect
to such series of the Preferred Stock. Wherever the Company redeems shares of
Preferred Stock held by the Depositary, the Depositary will redeem as of the
same redemption date the number of Depositary Shares representing the shares
of Preferred Stock so redeemed. If fewer than all the Depositary Shares are to
be redeemed, the Depositary Shares to be redeemed will be selected by lot or
pro rata as may be determined by the Depositary.
Voting the Preferred Stock. Upon receipt of notice of any meeting at which
the holders of the Preferred Stock are entitled to vote, the Depositary will
mail the information contained in such notice of meeting to the
47
<PAGE>
record holders of the Depositary Shares relating to such Preferred Stock. Each
record holder of such Depositary Shares on the record date (which will be the
same date as the record date for the Preferred Stock) will be entitled to
instruct the Depositary as to the exercise of the voting rights pertaining to
the amount of the Preferred Stock represented by such holder's Depositary
Shares. The Depositary will endeavor, insofar as practicable, to vote the
amount of the Preferred Stock represented by such Depositary Shares in
accordance with such instructions, and the Company will agree to take all
action that may be deemed necessary by the Depositary in order to enable the
Depositary to do so. The Depositary will abstain from voting shares of the
Preferred Stock to the extent it does not receive specific instructions from
the holders of Depositary Shares representing such Preferred Stock.
Amendment and Termination of the Depositary Agreement. The form of
Depositary Receipt evidencing the Depositary Shares and any provision of the
Deposit Agreement may at any time be amended by agreement between the Company
and the Depositary. However, any amendment that materially and adversely
alters the rights of the holders of Depositary Shares will not be effective
unless such amendment has been approved by the holders of at least a majority
of the Depositary Shares then outstanding. The Deposit Agreement may be
terminated by the Company or the Depositary only if (i) all outstanding
Depositary Shares have been redeemed or (ii) there has been a final
distribution in respect of the Preferred Stock in connection with any
liquidation, dissolution or winding up of the Company and such distribution
has been distributed to the holders of Depositary Receipts.
Charges of Depositary. The Company will pay all transfer and other taxes and
governmental charges arising solely from the existence of the depositary
arrangements. The Company will pay charges of the Depositary in connection
with the initial deposit of the Preferred Stock and any redemption of the
Preferred Stock. Holders of Depositary Receipts will pay other transfer and
other taxes and governmental charges and such other charges, including a fee
for the withdrawal of shares of Preferred Stock upon surrender of Depositary
Receipts, as are expressly provided in the Deposit Agreement to be for their
accounts.
Withdrawal of Preferred Stock. Upon surrender of Depositary Receipts at the
principal office of the Depositary, subject to the terms of the Deposit
Agreement, the owner of the Depositary Shares evidenced thereby is entitled to
delivery of the number of whole shares of Preferred Stock and all money and
other property, if any, represented by such Depositary Shares. Partial shares
of Preferred Stock will not be issued. If the Depositary Receipts delivered by
the holder evidence a number of Depositary Shares in excess of the number of
Depositary Shares representing the number of whole shares of Preferred Stock
to be withdrawn, the Depositary will deliver to such holder at the same time a
new Depositary Receipt evidencing such excess number of Depositary Shares.
Holders of Preferred Stock thus withdrawn will not thereafter be entitled to
deposit such shares under the Deposit Agreement or to receive Depositary
Receipts evidencing Depositary Shares therefor.
Miscellaneous. The Depositary will forward to holders of Depository Receipts
all reports and communications from the Company that are delivered to the
Depositary and that the Company is required to furnish to the holders of the
Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and
the Depositary under the Deposit Agreement will be limited to performance in
good faith of their duties thereunder and they will not be obligated to
prosecute or defend any legal proceeding in respect of any Depositary Shares
or Preferred Stock unless satisfactory indemnity is furnished. They may rely
upon written advice of counsel or accountants, or upon information provided by
persons presenting Preferred Stock for deposit, holders of Depositary Receipts
or other persons believed to be competent and on documents believed to be
genuine.
Resignation and Removal of Depositary. The Depositary may resign at any time
by delivering to the Company notice of its election to do so, and the Company
may at any time remove the Depositary, any such resignation or removal to take
effect upon the appointment of a successor Depositary and its acceptance of
such appointment. Such successor Depositary must be appointed within 60 days
after delivery of the notice of
48
<PAGE>
resignation or removal and must be a bank or trust company having its
principal office in the United States and having a combined capital and
surplus of at least $50,000,000.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities, Preferred Stock, Depositary Shares or Common Stock. Securities
Warrants may be issued independently or together with Debt Securities,
Preferred Stock, Depositary Shares or Common Stock offered by any Prospectus
Supplement and may be attached to or separate from any such Offered
Securities. Each series of Securities Warrants will be issued under a separate
warrant agreement (a "Securities Warrant Agreement") to be entered into
between the Company and a bank or trust company, as warrant agent (the
"Securities Warrant Agent"), all as set forth in the Prospectus Supplement
relating to the particular issue of Securities Warrants. The Securities
Warrant Agent will act solely as an agent of the Company in connection with
the Securities Warrants and will not assume any obligation or relationship of
agency or trust for or with any holders of Securities Warrants or beneficial
owners of Securities Warrants. The following summary of certain provisions of
the Securities Warrants does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, all provisions of the Securities
Warrant Agreements.
Reference is made to the Prospectus Supplement relating to the particular
issue of Securities Warrants offered thereby for the terms of and information
relating to such Securities Warrants, including, where applicable: (i) the
designation, aggregate principal amount, currencies, denominations, and terms
of the series of Debt Securities purchasable upon exercise of Debt Warrants
and the price at which such Debt Securities may be purchased upon such
exercise; (ii) the number of shares of Common Stock purchasable upon the
exercise of Common Stock Warrants and the price at which such number of shares
of Common Stock may be purchased upon such exercise; (iii) the number of
shares and series of Preferred Stock and/or Depositary Shares purchasable upon
the exercise of Preferred Stock Warrants and the price at which such number of
shares of such series of Preferred Stock and/or Depositary Shares may be
purchased upon such exercise; (iv) the date on which the right to exercise
such Securities Warrants shall commence and the date on which such right shall
expire (the "Expiration Date"); (v) United States Federal income tax
consequences applicable to such Securities Warrants; (vi) the amount of
Securities Warrants outstanding as of the most recent practicable date; and
(vii) any other terms of such Securities Warrants. Common Stock Warrants will
be offered and exercisable for U.S. dollars only. Securities Warrants will be
issued in registered form only. The exercise price for Securities Warrants
will be subject to adjustment in accordance with the applicable Prospectus
Supplement.
Each Securities Warrant will entitle the holder thereof to purchase such
principal amount of Debt Securities or such number of shares of Preferred
Stock, Depositary Shares or Common Stock at such exercise price as shall in
each case be set forth in, or calculable from, the Prospectus Supplement
relating to the Securities Warrants, which exercise price may be subject to
adjustment upon the occurrence of certain events as set forth in such
Prospectus Supplement. After the close of business on the Expiration Date (or
such later date to which such Expiration Date may be extended by the Company),
unexercised Securities Warrants will become void. The place or places where,
and the manner in which, Securities Warrants may be exercised shall be
specified in the Prospectus Supplement relating to such Securities Warrants.
Prior to the exercise of any Securities Warrants to purchase Debt
Securities, Preferred Stock, Depositary Shares or Common Stock, holders of
such Securities Warrants will not have any of the rights of holders of Debt
Securities, Preferred Stock, Depositary Shares or Common Stock, as the case
may be, purchasable upon such exercise, including the right to receive
payments of principal of, premium, if any, or interest, if any, on the Debt
Securities purchasable upon such exercise or to enforce covenants in the
applicable Indenture, or to receive payments of dividends, if any, on the
Preferred Stock, Depositary Shares or Common Stock purchasable upon such
exercise, or to exercise any applicable right to vote.
49
<PAGE>
PLAN OF DISTRIBUTION
Any of the Securities being offered hereby may be sold in any one or more of
the following ways from time to time: (i) through agents; (ii) to or through
underwriters; (iii) through dealers; and (iv) directly by the Company or (v)
in the case of Preferred Securities, by the Trust to purchasers.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Offers to purchase Securities may be solicited by agents designated by the
Company from time to time. Any such agent involved in the offer or sale of the
Securities in respect of which this Prospectus is delivered will be named, and
any commissions payable by the Company or the Trust to such agent will be set
forth, in the applicable Prospectus Supplement. Unless otherwise indicated in
such Prospectus Supplement, any such agent will be acting on a reasonable best
efforts basis of the period of its appointment. Any such agent may be deemed
to be an underwriter, as that term is defined in the Securities Act, of the
Securities so offered and sold.
If Securities are sold by means of an underwritten offering, the Company
and, in the case of an offering of Preferred Securities, the Trust will
execute an underwriting agreement with an underwriter or underwriters at the
time an agreement for such sale is reached, and the names of the specific
managing underwriter or underwriters, as well as any other underwriters, the
respective amounts underwritten and the terms of the transaction, including
commissions, discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in the applicable Prospectus Supplement
which will be used by the underwriters to make resales of the Securities in
respect of which this Prospectus is being delivered to the public. If
underwriters are utilized in the sale of any Securities in respect of which
this Prospectus is being delivered, such Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one
or more transactions, including negotiated transactions, at fixed public
offering prices or at varying prices determined by the underwriters at the
time of sale. Securities may be offered to the public either through
underwriting syndicates represented by managing underwriters or directly by
one or more underwriters. If any underwriter or underwriters are utilized in
the sale of Securities, unless otherwise indicated in the applicable
Prospectus Supplement, the underwriting agreement will provide that the
obligations of the underwriters are subject to certain conditions precedent
and that the underwriters with respect to a sale of such Securities will be
obligated to purchase all such Securities if any are purchased.
The Company or the Trust, as applicable, may grant to the underwriters
options to purchase additional Securities, to cover over-allotments, if any,
at the initial public offering price (with additional underwriting commissions
or discounts), as may be set forth in the Prospectus Supplement relating
thereto. If the Company or the Trust, as applicable, grants any over-allotment
option, the terms of such over-allotment option will be set forth in the
Prospectus Supplement for such Securities.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company or the Trust, as applicable, will
sell such Securities to the dealer as principal. The dealer may then resell
such Securities to the public at varying prices to be determined by such
dealer at the time of resale. Any such dealer may be deemed to be an
underwriter, as such term is defined in the Securities Act, of the Securities
so offered and sold. The name of the dealer and their terms of the transaction
will be set forth in the Prospectus Supplement relating thereto.
Offers to purchase Securities may be solicited directly by the Company or
the Trust, as applicable, and the sale thereof may be made by the Company or
the Trust directly to institutional investors or others, who may be deemed to
be underwriters within the meaning of the Securities Act with respect to any
resale thereof. The terms of any such sales will be described in the
Prospectus Supplement relating thereto.
50
<PAGE>
Securities may also be offered and sold, if so indicated in the applicable
Prospectus Supplement, in connection with a remarketing upon their purchase,
in accordance with a redemption or repayment pursuant to their terms, or
otherwise, by one or more firms ("remarketing firms"), acting as principals
for their own accounts or as agents for the Company or the Trust, as
applicable. Any remarketing firm will be identified and the terms of its
agreement, if any, with the Company or the Trust and its compensation will be
described in the applicable Prospectus Supplement. Remarketing firms may be
deemed to be underwriters, as that term is defined in the Securities Act, in
connection with the Securities remarketed thereby.
If so indicated in the applicable Prospectus Supplement, the Company or the
Trust, as applicable, may authorize agents and underwriters to solicit offers
by certain institutions to purchase Securities from the Company or the Trust
at the public offering price set forth in the applicable Prospectus Supplement
pursuant to delayed delivery contracts providing for payment and delivery on
the date or dates stated in the applicable Prospectus Supplement. Such delayed
delivery contracts will be subject to only those conditions set forth in the
applicable Prospectus Supplement. A commission indicated in the applicable
Prospectus supplement will be paid to underwriters and agents soliciting
purchases of Securities pursuant to delayed delivery contracts accepted by the
Company or the Trust, as applicable.
Agents, underwriters, dealers and remarketing firms may be entitled under
relevant agreements with the Company or the Trust, as applicable, to
indemnification by the Company or the Trust against certain liabilities,
including liabilities under the Securities Act, or to contribution with
respect to payments which such agents, underwriters, dealers and remarketing
firms may be required to make in respect thereof.
Each series of Securities will be a new issue and, other than the Common
Stock, which is listed on the New York Stock Exchange, will have no
established trading market. The Company may elect to list any series of
Securities on an exchange, and in the case of the Common Stock, on any
additional exchange, but, unless otherwise specified in the applicable
Prospectus Supplement, the Company shall not be obligated to do so. No
assurance can be given as to the liquidity of the trading market for any of
the Securities.
Agents, underwriters, dealers and remarketing firms may be customers of,
engage in transactions with, or perform services for, the Company and its
subsidiaries in the ordinary course of business.
VALIDITY OF SECURITIES
The validity of the Preferred Securities will be passed upon for the Company
and the Trust by Richards, Layton & Finger P.A., special Delaware counsel to
the Company and the Trust. The validity of the Securities (other than the
Preferred Securities) will be passed upon for the Company by Vinson & Elkins
L.L.P., Houston, Texas, and will be passed upon for any agents, dealers or
underwriters by counsel named in the applicable Prospectus Supplement.
EXPERTS
The audited consolidated financial statements and schedule of Dynegy
(formerly NGC Corporation) and subsidiaries, incorporated by reference in this
Registration Statement, have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and are
incorporated herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report.
51
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the issuance and distribution of the
securities being registered are estimated as follows:
<TABLE>
<S> <C>
Registration Fee................................................ $147,500
Legal fees and expenses......................................... 100,000
Accounting fees and expenses.................................... 50,000
Printing and engraving expenses................................. 50,000
Trustee's fees and expenses..................................... 25,000
Depositary's fees and expenses.................................. 10,000
Miscellaneous expenses.......................................... 20,000
--------
Total....................................................... $402,500
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 102 of the Delaware General Corporation Law (the
"DGCL"), the Restated Certificate of Incorporation of the Company, as amended,
provides that, to the fullest extent permitted by Delaware law, no director
shall be liable to the Company or its stockholders for monetary damages for
breach of fiduciary duty as director. By virtue of these provisions, a
director of the Company is not personally liable for monetary damages for
breach of such director's fiduciary duty except for liability for (i) breach
of duty of loyalty to the Company or its stockholders, (ii) acts or omissions
not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) dividends or stock repurchases or redemptions that are
unlawful under the DGCL and (iv) any transaction from which such director
receives an improper personal benefit. In addition, the Certificate of
Incorporation provides that if the DGCL is amended to authorize the further
elimination or limitation of the liability of a director, then the liability
of the directors will be eliminated or limited to the fullest extent permitted
by the DGCL, as amended. As a result, the rights of the Company and its
stockholders to obtain monetary damages for acts or omissions of directors
will be more limited than they would be in the absence of the limitation of
liability provision. The limitation of liability provision does not limit or
affect a stockholder's ability to seek and obtain relief under the federal
securities laws.
Section 145 of the DGCL permits indemnification upon a determination that an
officer or director has met the applicable standard of conduct. Such officer
or director is required to have acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of a corporation and,
with respect to any criminal action, without reasonable cause to believe his
conduct was unlawful. Section 145 does not authorize indemnification in
actions brought by or in the right of a corporation with respect to any claim,
issue or matter as to which a director or officer is adjudged to be liable to
the corporation, unless specifically authorized by the Delaware Court of
Chancery or the court in which such action is brought. The Company's
Certificate of Incorporation provides for the mandatory indemnification of
officers and directors to the fullest extent permitted under the DGCL. Section
145 also expressly provides that the power to indemnify authorized thereby is
not exclusive of any rights granted under any bylaw, agreement, vote of
stockholders or disinterested directors, or otherwise.
The above discussion of the Company's Restated Certificate of Incorporation
and of Sections 102 and 145 of the DGCL is not intended to be exhaustive and
is qualified in its entirety by such Restated Certificate of Incorporation and
the DGCL.
The Company has purchased liability insurance policies covering its
directors and officers to insure against losses that are not covered by the
indemnification of directors and officers by the Company, as discussed above.
II-1
<PAGE>
Covered losses include those arising from any breach of duty, neglect, error,
misstatement, misleading statement, omission or other act done or wrongfully
attempted by the directors or officers in their respective capacities as such.
The Company is also insured against losses incurred as a result of indemnity
payments to any director or officer.
ITEM 16. EXHIBITS
<TABLE>
<C> <C> <S>
*1.1 -- Proposed Form of Underwriting Agreement (Debt
Securities).
*1.2 -- Proposed Form of Underwriting Agreement (Preferred
Stock).
*1.3 -- Proposed Form of Underwriting Agreement (Common Stock).
*1.4 -- Proposed Form of Underwriting Agreement (Securities
Warrants).
*1.5 -- Proposed Form of Underwriting Agreement (Preferred
Securities).
***4.1 -- Restated Certificate of Incorporation.
***4.1.1 -- Certificate of Amendment to the Restated Certificate of
Incorporation.
4.2 -- Amended and Restated Bylaws of the Company (incorporated
by reference to Exhibit 3.2 to the Company's Annual
Report on Form 10-K for the year ended December 31,
1996).
**4.3 -- Form of Debt Securities.
4.4 -- Indenture by and between the Company and The First
National Bank of Chicago, as Trustee, dated as of
September 26, 1996, as amended and restated as of March
23, 1998 (incorporated by reference to Exhibit 4.21 to
the Company's Annual Report on Form 10-K for the year
ended December 31, 1997).
***4.5 -- Subordinated Debt Indenture between the Company and the
First National Bank of Chicago, as Trustee, dated July
17, 1998.
***4.6 -- Certificate of Trust of Dynegy Capital Trust II.
***4.7 -- Declaration of Trust of Dynegy Capital Trust II.
***4.8 -- Form of Amended and Restated Declaration of Trust of
Dynegy Capital Trust II.
***4.9 -- Form of Trust Preferred Security Certificate for Dynegy
Capital Trust II (included in Exhibit 4.8).
***4.10 -- Form of Debenture Indenture between the Company and The
First National Bank of Chicago, as Trustee.
***4.11 Form of Trust Debentures of the Company (included in
Exhibit 4.10).
***4.12.1 -- Form of Guarantee in respect of Dynegy Capital Trust II,
with respect to the Common Securities.
***4.12.2 -- Form of Guarantee in respect of Dynegy Capital Trust II,
with respect to the Preferred Securities.
**4.13 -- Form of Securities Warrants.
**4.14 -- Form of Depositary Agreement.
**4.15 -- Form of Depositary Receipt.
***5.1 -- Opinion of Vinson & Elkins L.L.P.
***5.2 -- Opinion of Richards, Layton & Finger P.A., as to the
validity of the Preferred Securities.
***12.1 -- Computation of Ratio of Earnings to Fixed Charges.
***23.1 -- Consent of Arthur Andersen LLP.
***23.2 -- Consent of Vinson & Elkins L.L.P. (included in Exhibit
5.1).
***23.3 -- Consent of Richards, Layton & Finger P.A. (included in
Exhibit 5.2).
***24.1 -- Powers of Attorney (included on the signature pages to
this Registration Statement).
***25.1 -- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of Debt Trustee under the
Subordinated Debt Indenture.
***25.2 -- Form T-1 Statement of Eligibility of Debenture Trustee
and Qualification under the Trust Indenture Act of 1939
under the Debenture Indenture.
***25.3 -- Form T-1 Statement of Eligibility of Debenture Trustee
and Qualification under the Trust Indenture Act of 1939
under the Guarantee with respect to the Amended and
Restated Declaration of Trust.
***25.4 -- Form T-1 Statement of Eligibility of Debenture Trustee
and Qualification under the Trust Indenture Act of 1939
under the Preferred Securities.
</TABLE>
II-2
<PAGE>
- --------
* The Company will file any underwriting agreement relating to Common Stock
that it may enter into as an exhibit to a Current Report on Form 8-K
which is incorporated by reference into this Registration Statement.
** The Company will file any forms of Debt Securities, Securities Warrants,
Depositary Receipts or Depositary Agreement, or any legal opinions, not
previously so filed in a Current Report on Form 8-K.
*** Filed herewith.
ITEM 17. UNDERTAKING
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities Act of
1933 if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed on the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant
to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions set forth in response to Item
II-3
<PAGE>
15, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Dynegy Inc. certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of Houston, State of Texas on July 30, 1998.
DYNEGY INC.
By: /s/ C. L. Watson
----------------------------------
C. L. WATSON
CHAIRMAN OF THE BOARD, CHIEF
EXECUTIVE OFFICER AND DIRECTOR
Each person whose signature appears below hereby appoints John U. Clarke,
Kenneth E. Randolph and Lisa Q. Metts as his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement and any registration statement for the same offering filed pursuant
to Rule 462 under the Securities Act of 1933, and to file the same, with all
exhibits thereto and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and
anything appropriate or necessary to be done, as fully and for all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or their substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME AND SIGNATURE TITLE DATE
/s/ C. L. Watson Chairman of the Board, July 30, 1998
- ----------------------------------- Chief Executive
C. L. WATSON Officer and Director
(Principal Executive
Officer)
/s/ John U. Clarke Senior Vice President July 30, 1998
- ----------------------------------- and Chief Financial
JOHN U. CLARKE Officer (Principal
Financial Officer and
Principal Accounting
Officer)
/s/ Stephen J. Brandon Director July 30, 1998
- -----------------------------------
STEPHEN J. BRANDON
/s/ Frank J. Chapman Director July 30, 1998
- -----------------------------------
FRANK J. CHAPMAN
/s/ Paul Nicholas Woollacott Director July 30, 1998
- -----------------------------------
PAUL NICHOLAS WOOLLACOTT
II-5
<PAGE>
NAME AND SIGNATURE TITLE DATE
/s/ Jeffrey M. Lipton Director July 30, 1998
- ----------------------------------
JEFFREY M. LIPTON
/s/ A. Terence Poole Director July 30, 1998
- ----------------------------------
A. TERENCE POOLE
/s/ Jack S. Mustoe Director July 30, 1998
- ----------------------------------
JACK S. MUSTOE
/s/ Darald W. Callahan Director July 30, 1998
- ----------------------------------
DARALD W. CALLAHAN
/s/ Patricia A. Woertz Director July 30, 1998
- ----------------------------------
PATRICIA A. WOERTZ
/s/ Peter J. Robertson Director July 30, 1998
- ----------------------------------
PETER J. ROBERTSON
/s/ Daniel L. Dienstbier Director July 30, 1998
- ----------------------------------
DANIEL L. DIENSTBIER
/s/ J. Otis Winters Director July 30, 1998
- ----------------------------------
J. OTIS WINTERS
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Dynegy Capital
Trust II certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas
on July 30, 1998.
DYNEGY CAPITAL TRUST II
By: Dynegy Inc., as Sponsor
----------------------------------
By: /s/ John U. Clarke
------------------------------
John U. Clarke
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DESCRIPTION PAGES
----------- ----------- ------------
<C> <C> <S> <C>
*1.1 -- Proposed Form of Underwriting Agreement
(Debt Securities).
*1.2 -- Proposed Form of Underwriting Agreement
(Preferred Stock).
*1.3 -- Proposed Form of Underwriting Agreement
(Common Stock).
*1.4 -- Proposed Form of Underwriting Agreement
(Securities Warrants).
*1.5 -- Proposed Form of Underwriting Agreement
(Preferred Securities).
***4.1 -- Restated Certificate of Incorporation.
***4.1.1 -- Certificate of Amendment to the Restated
Certificate of Incorporation.
4.2 -- Amended and Restated Bylaws of the Company
(incorporated by reference to Exhibit 3.2
to the Company's Annual Report on Form 10-
K for the year ended December 31, 1996).
**4.3 -- Form of Debt Securities.
4.4 -- Indenture by and between the Company and
The First National Bank of Chicago, as
Trustee, dated as of September 26, 1996,
as amended and restated as of March 23,
1998 (incorporated by reference to Exhibit
4.21 to the Company's Annual Report on
Form 10-K for the year ended December 31,
1997).
***4.5 -- Subordinated Debt Indenture between the
Company and the First National Bank of
Chicago, as Trustee, dated July 17, 1998.
***4.6 -- Certificate of Trust of Dynegy Capital
Trust II.
***4.7 -- Declaration of Trust of Dynegy Capital
Trust II.
***4.8 -- Form of Amended and Restated Declaration
of Trust of Dynegy Capital Trust II.
***4.9 -- Form of Trust Preferred Security
Certificate for Dynegy Capital Trust II
(included in Exhibit 4.8).
***4.10 -- Form of Debenture Indenture between the
Company and The First National Bank of
Chicago, as Trustee.
***4.11 Form of Trust Debentures of the Company
(included in Exhibit 4.10).
***4.12.1 -- Form of Guarantee in respect of Dynegy
Capital Trust II, with respect to the
Common Securities.
***4.12.2 -- Form of Guarantee in respect of Dynegy
Capital Trust II, with respect to the
Preferred Securities.
**4.13 -- Form of Securities Warrants.
**4.14 -- Form of Depositary Agreement.
**4.15 -- Form of Depositary Receipt.
***5.1 -- Opinion of Vinson & Elkins L.L.P.
***5.2 -- Opinion of Richards, Layton & Finger P.A.,
as to the validity of the Preferred
Securities.
***12.1 -- Computation of Ratio of Earnings to Fixed
Charges.
***23.1 -- Consent of Arthur Andersen LLP.
***23.2 -- Consent of Vinson & Elkins L.L.P.
(included in Exhibit 5.1).
***23.3 -- Consent of Richards, Layton & Finger P.A.
(included in Exhibit 5.2).
***24.1 -- Powers of Attorney (included on the
signature pages to this Registration
Statement).
***25.1 -- Form T-1 Statement of Eligibility and
Qualification under the Trust Indenture
Act of 1939 of Debt Trustee under the
Subordinated Debt Indenture.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DESCRIPTION PAGES
----------- ----------- ------------
<C> <C> <S> <C>
***25.2 -- Form T-1 Statement of Eligibility of Debenture
Trustee and Qualification under the Trust
Indenture Act of 1939 under the Debenture
Indenture.
***25.3 -- Form T-1 Statement of Eligibility of Debenture
Trustee and Qualification under the Trust
Indenture Act of 1939 under the Guarantee with
respect to the Amended and Restated
Declaration of Trust.
***25.4 -- Form T-1 Statement of Eligibility of Debenture
Trustee and Qualification under the Trust
Indenture Act of 1939 under the Preferred
Securities.
</TABLE>
ii
<PAGE>
EXHIBIT 4.1.1
CERTIFICATE OF AMENDMENT
TO
THE RESTATED CERTIFICATE OF INCORPORATION
OF
NGC CORPORATION
NGC CORPORATION, a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation duly adopted
resolutions proposing and declaring the following amendment of the Restated
Certificate of Incorporation of the Corporation to be advisable and recommending
the adoption of such amendment by the stockholders of the Corporation.
SECOND: That in lieu of a meeting and vote of the stockholders of the
Corporation, the requisite stockholder approval was obtained by written consent
to the following amendment in accordance with the provisions of Section 228 of
the Delaware General Corporation Law ("DGCL") and prompt notice of taking of
corporate action without a meeting has been duly given in accordance with
Section 228(d) of the DGCL.
THIRD: The Restated Certificate of Incorporation of the Corporation is
amended by deleting article First in its entirety and replacing it with a new
article First which reads as follows:
"FIRST: The name of the corporation is 'Dynegy Inc.' (the
'Corporation')."
FOURTH: That the amendment was duly adopted in accordance with the
provisions of Sections 228 and 242 of the DGCL.
FIFTH: This Certificate of Amendment shall become effective at 5:00 p.m.,
Eastern Standard Time, on July 6, 1998.
IN WITNESS WHEREOF, NGC Corporation has caused this certificate to be
signed by C. L. Watson, its Chairman of the Board and Chief Executive Officer,
this 6th day of July, 1998.
NGC CORPORATION
By: /S/ C. L. Watson
--------------------------
C. L. Watson
Chairman of the Board and
Chief Executive Officer
<PAGE>
EXHIBIT 4.1
RESTATED CERTIFICATE OF INCORPORATION
OF
NGC CORPORATION
NGC Corporation hereby adopts a Restated Certificate of Incorporation and
states as follows:
1. The present name of the corporation is "NGC Corporation." The
corporation was originally incorporated under the name Midstream Combination
Corp. pursuant to its original Certificate of Incorporation, which was filed
with the Secretary of State of the State of Delaware on May 22, 1996;
2. The Restated Certificate of Incorporation (i) was duly adopted in
accordance with Section 245 of the Delaware General Corporation Law by the Board
of Directors without a vote of stockholders; (ii) only restates and integrates
and does not further amend the provisions of the Certificate of Incorporation of
the corporation as heretofore amended by that certain Certificate of Merger
merging NGC Corporation with and into Midstream Combination Corp., which filed
with the Secretary of State of the State of Delaware on August 30, 1996; and
(iii) there is no discrepancy between the provisions of the Certificate of
Incorporation as so amended and the provisions of the Restated Certificate of
Incorporation; and
3. The Restated Certificate of Incorporation restates and integrates the
Certificate of Incorporation as heretofore amended by the Certificate of Merger
as follows:
FIRST: The name of the corporation is NGC Corporation (the "Corporation").
SECOND: The registered office of the Corporation in the State of Delaware
is located at Corporation Service Company, 1013 Centre Road, in the City of
Wilmington, County of New Castle. The name of the registered agent of the
Corporation at such address is Corporation Service Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH:
A. Capital Stock. The total number of shares of stock which the
Corporation shall have authority to issue is 450,000,000 shares, divided into
two classes as follows: (i) 50,000,000 shares of Preferred Stock, par value
$0.01 per share ("Preferred Stock"); and (ii) 400,000,000 shares of Common
Stock, par value $0.01 per share ("Common Stock").
The designations and the powers, preferences, rights, qualifications,
limitations, and restrictions of the Preferred Stock and the Common Stock of
the Corporation are as follows:
<PAGE>
B. Provisions Relating to the Preferred Stock.
1. The Preferred Stock may be issued from time to time in one or more
series, the shares of each series to have such designations and powers,
preferences, and rights, and qualifications, limitations, and restrictions
thereof as are stated and expressed herein and in the resolution or resolutions
providing for the issuance of such series adopted by the board of directors of
the Corporation as hereafter prescribed.
2. Authority is hereby expressly granted to and vested in the board of
directors of the Corporation to authorize the issuance of the Preferred Stock
from time to time in one or more series, and with respect to each such series of
the Preferred Stock, to fix and state by the resolution or resolutions from time
to time adopted providing for the issuance thereof the following:
(i) whether or not such series is to have voting rights, full,
special, or limited, or is to be without voting rights, and whether or not
such series is to be entitled to vote as a separate class either alone or
together with the holders of one or more other series or class of stock;
(ii) the number of shares to constitute such series and the
designations thereof;
(iii) the preferences, and relative, participating, optional, or
other special rights, if any, and the qualifications, limitations, or
restrictions thereof, if any, with respect to any such series;
(iv) whether or not the shares of any such series shall be
redeemable at the option of the Corporation or the holders thereof or upon
the happening of any specified event, and, if redeemable, the redemption
price or prices (which may be payable in the form of cash, notes,
securities, or other property), and the time or times at which, and the
terms and conditions upon which, such shares shall be redeemable and the
manner of redemption;
(v) whether or not the shares of such series shall be subject to
the operation of retirement or sinking funds to be applied to the purchase
or redemption of such shares for retirement, and, if such retirement or
sinking fund or funds are to be established, the annual amount thereof, and
the terms and provisions relative to the operation thereof;
(vi) the dividend rate, whether dividends are payable in cash,
stock of the Corporation, or other property, or a combination thereof, the
conditions upon which and the times when such dividends are payable, the
preference to or the relation to the payment of dividends payable on any
other class or classes or series of stock, whether such dividends shall be
cumulative or non-cumulative, and if cumulative, the date or dates from
which such dividends shall accumulate;
(vii) the preferences, if any, and the amounts thereof which the
holders of any such series shall be entitled to receive upon the voluntary
and involuntary dissolution of, or upon any distribution of the assets of,
the Corporation;
2
<PAGE>
(viii) whether or not the shares of any such series, at the
option of the Corporation or the holder thereof or upon the happening of
any specified event, shall be convertible into or exchangeable for the
shares of any other class or classes or of any other series of the same or
any other class or classes of stock, securities, or other property of the
Corporation and the conversion price or prices or ratio or ratios or the
rate or rates at which such exchange may be made, with such adjustments, if
any, as shall be stated and expressed or provided for in such resolution or
resolutions; and
(ix) such other special rights and provisions with respect to any
such series as may to the board of directors of the Corporation seem
advisable.
3. The shares of each series of the Preferred Stock may vary from the
shares of any other class or series thereof in any or all of the foregoing
respects. The board of directors of the Corporation may increase the number of
shares of the Preferred Stock designated for any existing series by a resolution
adding to such series authorized and unissued shares of the Preferred Stock not
designated for any other series. The board of directors of the Corporation may
decrease the number of shares of the Preferred Stock designated for any existing
series by a resolution, subtracting from such series unissued shares of the
Preferred Stock designated for such series, and the shares so subtracted shall
become authorized, unissued and undesignated shares of the Preferred Stock.
C. Provisions Relating to the Series A Participating Preferred Stock.
1. Designation and Amount. The shares of such series of Preferred Stock
shall be designated as "Series A Participating Preferred Stock" (the "Series A
Preferred"), $0.01 par value per share, and the number of shares of Preferred
Stock constituting such series shall be 8,000,000.
2. Dividends and Distribution. Subject to the provision for adjustment
hereinafter set forth, the holders of the Series A Preferred shall be entitled
to receive dividends or distributions equal per share in amount and kind to any
dividend or distribution payable on shares of Common Stock, when and as the same
are declared by the Board of Directors out of any funds legally available
therefor and paid to the holders of Common Stock, and no dividend may be
declared and paid on Common Stock unless an identical dividend or distribution
is declared and paid concurrently on Series A Preferred. If, however, at any
time after the date of original issuance of Series A Preferred, the Corporation
shall subdivide or reclassify the outstanding shares of Common Stock into a
greater number of shares of Common Stock or combine or reclassify the
outstanding shares of Common Stock into a smaller number of shares of Common
Stock, then, and in each such case, the amount to which holders of the Series A
Preferred were entitled immediately prior to such event shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of the Common Stock outstanding immediately after such event, and the
denominator of which is the number of shares of the Common Stock outstanding
immediately prior to such event. The Corporation will have the right to issue
shares of capital stock that are senior or junior to or on a parity with the
Series A Preferred with respect to dividends without the approval or consent of
the holders of Series A Preferred.
3. Voting Rights. Except as provided by law, the holders of the Series A
3
<PAGE>
Preferred shall have no voting rights on any matter.
4. Redemption. The shares of the Series A Preferred shall not be
redeemable.
5. Liquidation Preference. In the event of any liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, no
distribution shall be made to the holders of Common Stock or any stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series A Preferred unless, prior thereto, the holders of the Series A
Preferred shall have received $1.00 per share. All assets of the Corporation
available for distribution after the liquidation preferences are fully met of
the Series A Preferred and any shares senior to or on a parity with the Series A
Preferred with respect to liquidation preferences shall be distributed ratably
among the holders of the Series A Preferred and Common Stock in proportion to
the number of shares of Series A Preferred and Common Stock outstanding at the
time of such liquidation, dissolution or winding up of the Corporation. The
Corporation will have the right to issue shares of capital stock that are senior
or junior to or on a parity with the Series A Preferred with respect to the
liquidation, winding-up or dissolution of the Corporation without the approval
or consent of the holders of the Series A Preferred.
6. Conversion. The Series A Preferred may be converted at the option of
the holder thereof, or shall be converted automatically without any action on
the part of the holder thereof, into shares of Common Stock, on the terms and
conditions set forth in this Section 6. For purposes of this section 6, the
term "affiliate" shall mean any corporation, partnership or other entity that is
an "affiliate" within the meaning of the regulations promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), as such regulations
are in effect on the date hereof, and the term "Person" shall mean any
individual, firm, corporation, partnership, association, trust, joint venture,
legal entity, political subdivision or instrumentality or other organization.
(A) Right to Convert. Subject to the provisions for adjustment hereinafter
set forth, each share of the Series A Preferred shall be convertible, at the
option of the holder, at any time after the date of issuance of such share, into
one share of Common Stock as follows:
(i) To the extent necessary (a) to avoid dilution of the holder's
percentage ownership of the issued Common Stock, provided that, with
respect to dilution resulting from the issuance of additional compensatory
options as approved by not less than eighty-five percent (85%) of the
entire Board of Directors, the holder would have no such conversion right
so long as its ownership of Common Stock would still be greater than twenty
percent (20%) of the issued Common Stock, assuming for this purpose that
all shares of Common Stock subject to currently exercisable options and
warrants were issued and outstanding, or (b) to maintain a percentage
ownership of the issued Common Stock at least equal to that of the then
largest other stockholder of the Corporation;
(ii) To the extent necessary, if any Person other than the holder
of Series A Preferred or an affiliate of such holder makes a tender offer
for Common Stock and such holder desires to tender the shares of the Series
A Preferred in the same proportion as it tenders Common Stock;
4
<PAGE>
(iii) Upon approval by the stockholders of the Corporation of
any merger or recapitalization proposal in which the Series A Preferred
would be treated differently than Common Stock; and
(iv) Upon approval by the Corporation's stockholders of any (a)
sale of all or substantially all of the assets of the Corporation or (b)
liquidation, dissolution or winding up of the Corporation.
(B) Automatic Conversion. Subject to the provisions for adjustment
hereinafter set forth, each share of the Series A Preferred shall be
automatically converted into one share of Common Stock upon a sale or other
transfer (by operation of law, merger or otherwise) by the holder of such shares
to any Person other than an affiliate of the holder.
(C) Conversion Rate Adjustments. The Conversion Rate of the Series A
Preferred shall be subject to adjustment as hereinafter set forth. If at any
time the Corporation shall subdivide or reclassify the outstanding shares of
Common Stock into a greater number of shares of Common Stock or combine or
reclassify the outstanding shares of Common Stock into a smaller number of
shares of Common Stock, then, and in each such case, the number of shares of
Common Stock into which each share of the Series A Preferred is convertible
shall be adjusted so that the holder of each share thereof shall be entitled to
receive, upon the conversion thereof, the number of shares of Common Stock which
the holder of a share of the Series A Preferred would have been entitled to
receive after the happening of any and all of the events described above had
such share been converted into Common Stock immediately prior to the happening
of such event or the record date therefor, whichever is earlier.
(D) Mechanics of Conversion. The holder of any shares of the Series A
Preferred may exercise its option to convert such shares into shares of Common
Stock by surrendering for such purpose to the Corporation, at its principal
office or at such other office or agency maintained by the Corporation for that
purpose, a certificate or certificates representing the shares of the Series A
Preferred to be converted accompanied by a written notice stating that such
holder elects to convert all or a specified whole number of such shares in
accordance with the provisions of this Section 6 and specifying the name or
names in which such holder wishes the certificate or certificates for shares of
Common Stock to be issued. In case such notice shall specify a name or names
other than that of such holder, such notice shall be accompanied by payment of
all transfer taxes payable upon the issuance of shares of Common Stock in such
name or names. As promptly as practicable, and in any event within five
business days after the surrender of such certificates and the receipt of such
notice relating thereto and, if applicable, payment of all transfer taxes, the
Corporation shall deliver or cause to be delivered (i) certificates representing
the number of validly issued, fully paid and non-assessable shares of Common
Stock of the Corporation to which the holder of the Series A Preferred so
converted shall be entitled (and/or any other consideration to which the holders
of such shares of Common Stock would then be entitled) and (ii) if less than the
full number of shares of the Series A Preferred evidenced by the surrendered
certificate or certificates are being converted, a new certificate or
certificates, for the number of shares evidenced by such surrendered certificate
or certificates less the number of shares converted. Such conversions shall be
deemed to have been made upon receipt by the Corporation of such notice and such
surrendered certificate or certificates representing the shares of the Series A
Preferred to be converted, so that the rights of the holder
5
<PAGE>
thereof shall cease except for the right to receive Common Stock of the
Corporation in accordance herewith (and/or any other consideration to which the
holders of such shares of Common Stock would then be entitled), and such holder
shall be treated for all purposes as having become the record holder of such
Common Stock of the Corporation at such time.
D. Provisions Relating to the Common Stock.
1. Except as otherwise required by law, and subject to any special voting
rights which may be granted any series of Preferred Stock in the board of
directors resolution which creates such series, each holder of Common Stock
shall be entitled to one vote for each share of Common Stock standing in such
other holder's name on the records of the Corporation on each matter submitted
to a vote of the stockholders.
2. Subject to the rights of the holders of the Preferred Stock, the
holders of the Common Stock shall be entitled to receive when, as, and if
declared by the board of directors of the Corporation, out of funds legally
available therefor, dividends payable in cash, stock, or otherwise.
3. Upon any liquidation, dissolution, or winding up of the Corporation,
whether voluntary or involuntary, and after the holders of the Preferred Stock
and the holders of any bonds, debentures, or other obligations of the
Corporation shall have been paid in full the amounts to which they shall be
entitled (if any), or a sum sufficient for such payment in full shall have been
set aside, the remaining net assets of the Corporation shall be distributed pro
rata to the holders of the Common Stock and the holders of Series A Preferred in
accordance with their respective rights and interest, to the exclusion of the
holders of any other series of the Preferred Stock and any bonds, debentures, or
other obligations of the Corporation.
4. Without the consent of the holders of eighty-five percent (85%) of the
outstanding Common Stock, the Corporation may (and may permit any subsidiary of
the Corporation over which it has control to) sell the following products:
(i) crude oil;
(ii) other products usually and normally refined as petroleum
products from crude oils; and
(iii) natural gas liquids or liquefied petroleum gases;
irrespective of where such sales or products are made, only when the seller has
no actual knowledge that the sale is not for consumption or resale in one or
more of the following areas:
(i) the United States or any of its territories or possessions;
(ii) any country wholly located in the Western Hemisphere and/or
Europe or surrounded by the Mediterranean Sea;
(iii) any country all of the territory of which was formerly
contained
6
<PAGE>
within the Union of Soviet Socialist Republics;
(iv) any country whose territory is contained within the
territories constituting as of the date hereof the countries known as
Algeria, Angola, Benin, Burkina Faso, Cameroon, Central African Republic,
Chad, Congo, Cote D'Ivoire, Equatorial Guinea, Gabon, Gambia, Ghana,
Greenland, Guinea, Guinea Bissau, Iceland, Liberia, Libya, Mali,
Mauritania, Mongolia, Morocco, Niger, Nigeria, Rio Muni, Senegal, Sierra
Leone, Togo, Tunisia, Turkey, Western Sahara and/or Zaire;
(v) Antarctica; and
(vi) international waters;
unless (a) otherwise permitted by the terms of that certain Scope of Business
Agreement, dated May 22, 1996, between the Corporation and Chevron Corporation,
as the same may from time to time be amended in accordance with the terms
thereof, or (b) such Scope of Business Agreement is terminated pursuant to its
terms, upon which termination the provisions of this paragraph 4 shall be of no
further force and effect. A copy of such Scope of Business Agreement, as the
same may be amended, shall be available for inspection by any stockholder of the
Corporation at the principal offices of the Corporation. Except as indicated
above or as may otherwise be provided in this Certificate of Incorporation or by
Delaware law, stockholders shall have no right to approve specific business
activities of the Corporation, and the above provisions shall not otherwise
affect corporate powers and purposes as stated in Article III.
E. General.
1. Subject to the foregoing provisions of this Certificate of
Incorporation, the Corporation may issue shares of its Preferred Stock and
Common Stock from time to time for such consideration (in any form, but not less
in value than the par value thereof) as may be fixed by the board of directors
of the Corporation, which is expressly authorized to fix the same in its
absolute and uncontrolled discretion subject to the foregoing conditions.
Shares so issued for which the consideration shall have been paid or delivered
to the Corporation shall be deemed fully paid stock and shall not be liable to
any further call or assessment thereon, and the holders of such shares shall not
be liable for any further payments in respect of such shares.
2. The Corporation shall have authority to create and issue rights and
options entitling their holders to purchase or otherwise acquire shares of the
Corporation's capital stock of any class or series or other securities of the
Corporation, and such rights and options shall be evidenced by instrument(s)
approved by the board of directors of the Corporation. The board of directors
of the Corporation shall be empowered to set the exercise price, duration, times
for exercise, and other terms of such options or rights; provided, however, that
the consideration to be received (which may be in any form) for any shares of
capital stock subject thereto shall have a value not less than the par value
thereof.
FIFTH: No contract or transaction between the Corporation and one or more
of its directors, officers, or stockholders or between the Corporation and any
person (as used herein
7
<PAGE>
"person" means any other corporation, partnership, association, firm, trust,
joint venture, other legal entity, political subdivision, or instrumentality or
other organization) in which one or more of its directors, officers, or
stockholders are directors, officers, or stockholders, or have a financial
interest, shall be void or voidable solely for this reason, or solely because
the director or officer is present at or participates in the meeting of the
board or committee which authorizes the contract or transaction, or solely
because his, her, or their votes are counted for such purpose, if (i) the
material facts as to his or her relationship or interest and as to the contract
or transaction are disclosed or are known to the board of directors or the
committee, and the board of directors or committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or (ii) the material facts as to his or her relationship or interest and
as to the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (iii) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved, or ratified by the board of directors, a committee thereof (to the
extent permitted by applicable law), or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the board of directors or of a committee which authorizes the contract or
transaction.
SIXTH: The Corporation shall indemnify any person who was, is, or is
threatened to be made a party to a proceeding (as hereinafter defined) by reason
of the fact that he (i) is or was a director or officer of the Corporation or
(ii) while a director or officer of the Corporation, is or was serving at the
request of the Corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another foreign
or domestic corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan, or other enterprise, to the fullest extent permitted
under the General Corporation Law of Delaware, as the same exists or may
hereafter be amended. Such right shall be a contract right and shall include
the right to be paid by the Corporation expenses incurred in defending any such
proceeding in advance of its final disposition to the maximum extent permitted
under the General Corporation Law of Delaware, as the same exists or may
hereafter be amended. If a claim for indemnification or advancement of expenses
hereunder is not paid in full by the Corporation within 60 days after a written
claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim, and if successful in whole or in part, the claimant shall also be
entitled to be paid the expenses of prosecuting such claim. It shall be a
defense to any such action that such indemnification or advancement of costs of
defense are not permitted under the General Corporation Law of Delaware, but the
burden of proving such defense shall be on the Corporation. Neither the failure
of the Corporation (including its board of directors or any committee or
directors thereof, independent legal counsel, or stockholders) to have made its
determination prior to the commencement of such action that indemnification of,
or advancement of costs of defense to, the claimant is permissible in the
circumstances nor an actual determination by the Corporation (including its
board of directors or any committee or directors thereof, independent legal
counsel or stockholders) that such indemnification or advancement is not
permissible shall be a defense to the action or create a presumption that such
indemnification or advancement is not permissible. In the event of the death of
any person having a right of indemnification under the foregoing provisions,
such right shall inure to the benefit of his heirs, executors, administrators,
and personal representatives. The rights conferred above shall not be exclusive
of any other right which any person may have or hereafter acquire under any
statute,
8
<PAGE>
bylaw, resolution of stockholders or directors, agreement, or otherwise. The
Company shall be required to indemnify an indemnitee in connection with a
proceeding (or part thereof) initiated by such indemnitee only if the initiation
of such proceeding (or part thereof) by the indemnitee was authorized by the
board of directors of the Company.
The Corporation's obligation, if any, to indemnify or advance expenses to
any person who was or is serving at the request of the Corporation as a
director, officer, partner, venturer, proprietor, trustee, employee, agent, or
similar functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan, or other
enterprise shall be reduced by any amount such person may collect as
indemnification or advancement from such other foreign or domestic corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit plan,
or other enterprise.
The Corporation may additionally indemnify any employee or agent of the
Corporation to the fullest extent permitted by law.
As used herein, the term "proceeding" means any threatened, pending, or
completed action suit, or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, any appeal in such an action, suit, or
proceeding, and any inquiry or investigation that could lead to such an action,
suit, or proceeding.
Any repeal or amendment of this Article SIXTH shall be prospective only and
shall not affect the rights of any such director or officer or the obligations
of the Corporation with respect to any claim arising from or related to the
services of such director or officer in any of the foregoing capacities prior to
any such repeal or amendment to this Article SIXTH.
SEVENTH: The board of directors shall have the power to make, adopt,
alter, amend, and repeal from time to time the Bylaws of the Corporation and to
make from time to time new Bylaws of the Corporation (subject to the right of
the stockholders entitled to vote thereon to adopt, alter, amend, and repeal
Bylaws made by the board of directors or to make new Bylaws) to the extent and
in the manner provided in the Bylaws; provided, however, that the stockholders
of the Corporation shall be entitled to adopt, alter, amend, or repeal Bylaws
made by the board of directors or to make new Bylaws solely upon the affirmative
vote of the holders of a majority of the outstanding shares of the Common Stock.
EIGHTH: A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or knowing
violation of law, (iii) under Section 174 of the General Corporation Law of
Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit. Any repeal or amendment of this Article EIGHTH by
the stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation arising from an act or omission occurring prior to the time of such
repeal or amendment. In addition to the circumstances in which a director of
the Corporation is not personally liable as set forth in the foregoing
provisions of this Article EIGHTH, a director shall not be liable to the
Corporation or its
9
<PAGE>
stockholders to such further extent as permitted by any law hereafter enacted,
including without limitation any subsequent amendment to the General Corporation
Law of Delaware.
NINTH: The number of directors constituting the board of directors shall
be fixed by, or in the manner provided in, the Bylaws of the Corporation. Each
director of the Corporation shall hold office until the next annual meeting of
stockholders or until his or her successor shall have been duly elected and
qualified. Directors need not be elected by written ballot.
EXECUTED this 21st day of November, 1996.
NGC CORPORATION
By: /s/ C.L. Watson
---------------------------------
C.L. Watson
Chairman of the Board and
Chief Executive Officer
10
<PAGE>
EXHIBIT 4.5
DYNEGY INC.
And
THE FIRST NATIONAL BANK OF CHICAGO
Trustee
_______________
SUBORDINATED INDENTURE
_______________
Dated as of July 17, 1998
<PAGE>
DYNEGY INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
INDENTURE DATED AS OF JULY 17, 1998
Trust Indenture
Act Section Indenture Section
---------------- -----------------
(S) 310(a)(1)....................................... 609
(a)(2)....................................... 609
(a)(3)....................................... Not Applicable
(a)(4)....................................... Not Applicable
(a)(5)....................................... 609
(b).......................................... 608
(c).......................................... Not Applicable
.......................................... 610
(S) 311(a).......................................... 613
(b).......................................... 613
(c).......................................... Not Applicable
(S) 312(a).......................................... 701
.......................................... 702
(b).......................................... 702
(c).......................................... 702
(S) 313(a).......................................... 703
(b).......................................... 703
(c).......................................... 703
(d).......................................... 703
(S) 314(a)(1)-(3)................................... 704, 1007
(a)(4)....................................... 101
....................................... 1004
(b).......................................... Not Applicable
(c)(1)....................................... 102
(c)(2)....................................... 102
(c)(3)....................................... Not Applicable
(d).......................................... Not Applicable
(e).......................................... 102
(S) 315(a).......................................... 601
(b).......................................... 602
(c).......................................... 601
(d).......................................... 601
(e).......................................... 514
(f).......................................... Not Applicable
(S) 316(a).......................................... 101
(a)(1)(A).................................... 502
.................................... 512
(a)(1)(B).................................... 513
(a)(2)....................................... Not Applicable
(b).......................................... 508
(c).......................................... 104
(S) 317(a)(1)....................................... 503
(a)(2)....................................... 504
(b).......................................... 1003
(S) 318(a).......................................... 108
_______________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
RECITALS OF THE COMPANY...................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION.................................................. 1
SECTION 101. Definitions............................................... 1
SECTION 102. Compliance Certificates and Opinions...................... 9
SECTION 103. Form of Documents Delivered to Trustee.................... 9
SECTION 104. Acts of Holders........................................... 9
SECTION 105. Notices, Etc., to Trustee and Company.....................11
SECTION 106. Notice to Holders of Securities; Waiver...................11
SECTION 107. Language of Notices, Etc..................................12
SECTION 108. Conflict with Trust Indenture Act.........................12
SECTION 109. Effect of Headings and Table of Contents..................12
SECTION 110. Successors and Assigns....................................12
SECTION 111. Separability Clause.......................................12
SECTION 112. Benefits of Indenture.....................................12
SECTION 113. Governing Law.............................................13
SECTION 114. Legal Holidays............................................13
ARTICLE TWO
SECURITY FORMS..........................................................13
SECTION 201. Forms Generally...........................................13
SECTION 202. Form of Trustee's Certificate of Authentication...........13
SECTION 203. Securities in Global Form.................................14
SECTION 204. Form of Legend for Book-Entry Securities..................14
ARTICLE THREE
THE SECURITIES..........................................................15
SECTION 301. Amount Unlimited; Issuable in Series......................15
SECTION 302. Denominations.............................................17
SECTION 303. Execution, Authentication, Delivery and Dating............17
SECTION 304. Temporary Securities......................................19
SECTION 305. Registration, Registration of Transfer and Exchange.......20
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities and
Coupons..................................................23
SECTION 307. Payment of Interest; Interest Rights Preserved............24
SECTION 308. Persons Deemed Owners.....................................25
SECTION 309. Cancellation..............................................25
SECTION 310. Computation of Interest...................................26
ARTICLE FOUR
SATISFACTION AND DISCHARGE..............................................26
SECTION 401. Satisfaction and Discharge of Indenture...................26
SECTION 402. Application of Trust Money................................27
i
<PAGE>
ARTICLE FIVE
REMEDIES................................................................27
SECTION 501. Events of Default.........................................27
SECTION 502. Acceleration of Maturity; Rescission and Annulment........28
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee..................................................29
SECTION 504. Trustee May File Proofs of Claim..........................29
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons....................................30
SECTION 506. Application of Money Collected............................30
SECTION 507. Limitation on Suits.......................................31
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.....................................32
SECTION 509. Restoration of Rights and Remedies........................32
SECTION 510. Rights and Remedies Cumulative............................32
SECTION 511. Delay or Omission Not Waiver..............................32
SECTION 512. Control by Holders of Securities..........................32
SECTION 513. Waiver of Past Defaults...................................33
SECTION 514. Undertaking for Costs.....................................33
SECTION 515. Waiver of Stay or Extension Laws..........................33
ARTICLE SIX
THE TRUSTEE.............................................................33
SECTION 601. Certain Duties and Responsibilities.......................33
SECTION 602. Notice of Defaults........................................34
SECTION 603. Certain Rights of Trustee.................................34
SECTION 604. Not Responsible for Recitals or Issuance of Securities....35
SECTION 605. May Hold Securities.......................................35
SECTION 606. Money Held in Trust.......................................35
SECTION 607. Compensation and Reimbursement............................35
SECTION 608. Disqualification; Conflicting Interests...................36
SECTION 609. Corporate Trustee Required; Eligibility...................36
SECTION 610. Resignation and Removal; Appointment of Successor.........36
SECTION 611. Acceptance of Appointment by Successor....................37
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business.................................................38
SECTION 613. Preferential Collection of Claims Against Company.........38
SECTION 614. Appointment of Authenticating Agent.......................38
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.......................40
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.40
SECTION 702. Preservation of Information; Communications to Holders....40
SECTION 703. Reports by Trustee........................................40
SECTION 704. Reports by Company........................................41
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE....................41
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms......41
SECTION 802. Successor Substituted.....................................41
ii
<PAGE>
ARTICLE NINE
SUPPLEMENTAL INDENTURES.................................................42
SECTION 901. Supplemental Indentures without Consent of Holders........42
SECTION 902. Supplemental Indentures with Consent of Holders...........43
SECTION 903. Execution of Supplemental Indentures......................44
SECTION 904. Effect of Supplemental Indentures.........................44
SECTION 905. Conformity with Trust Indenture Act.......................44
SECTION 906. Reference in Securities to Supplemental Indentures........44
SECTION 907. Subordinated Unimpaired...................................44
ARTICLE TEN
COVENANTS...............................................................44
SECTION 1001. Payment of Principal, Premium and Interest................44
SECTION 1002. Corporate Existence and Maintenance of Office or Agency...45
SECTION 1003. Money for Securities Payments to Be Held in Trust.........46
SECTION 1004. Additional Amounts........................................47
SECTION 1005. Purchase of Securities by Company or Subsidiary...........47
SECTION 1006. Appointment to Fill Vacancies in Trustee's Office.........47
SECTION 1007. Statement by Officer as to Default........................48
SECTION 1008. Waiver of Certain Covenants...............................48
ARTICLE ELEVEN
REDEMPTION OF SECURITIES................................................48
SECTION 1101. Applicability of Article..................................48
SECTION 1102. Election to Redeem; Notice to Trustee.....................48
SECTION 1103. Selection of Securities to Be Redeemed....................49
SECTION 1104. Notice of Redemption......................................49
SECTION 1105. Deposit of Redemption Price...............................50
SECTION 1106. Securities Payable on Redemption Date.....................50
SECTION 1107. Securities Redeemed in Part...............................51
ARTICLE TWELVE
SINKING FUNDS...........................................................51
SECTION 1201. Applicability of Article..................................51
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.....51
SECTION 1203. Redemption of Securities for Sinking Fund.................51
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE......................................52
SECTION 1301. Company's Option to Effect Defeasance or Covenant
Defeasance...............................................52
SECTION 1302. Defeasance and Discharge..................................52
SECTION 1303. Covenant Defeasance.......................................52
SECTION 1304. Conditions to Defeasance or Covenant Defeasance...........53
SECTION 1305. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions............54
SECTION 1306. Reinstatement.............................................54
iii
<PAGE>
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF BEARER SECURITIES................................55
SECTION 1401. Purposes for Which Meetings May Be Called.................55
SECTION 1402. Call, Notice and Place of Meetings........................55
SECTION 1403. Persons Entitled to Vote at Meetings......................55
SECTION 1404. Quorum; Action............................................55
SECTION 1405. Determination of Voting Rights; Conduct and Adjournment of
Meetings.................................................56
SECTION 1406. Counting Votes and Recording Action of Meetings...........57
ARTICLE FIFTEEN
CONVERSION OF SECURITIES................................................57
SECTION 1502. Exercise of Conversion Privilege..........................57
SECTION 1503. Fractional Interests......................................58
SECTION 1504. Adjustment of Conversion Price............................59
SECTION 1505. Continuation of Conversion Privilege in Case of Merger,
Consolidation or Sale of Assets..........................62
SECTION 1506. Notice of Certain Events..................................63
SECTION 1507. Taxes on Conversion.......................................64
SECTION 1508. Company to Provide Stock..................................64
SECTION 1509. Disclaimer of Responsibility for Certain Matters..........64
SECTION 1510. Return of Funds Deposited for Redemption of Converted
Securities...............................................65
ARTICLE SIXTEEN
SUBORDINATION...........................................................65
SECTION 1601. Securities Subordinated to Senior Indebtedness............65
SECTION 1602. Reliance on Certificate of Liquidating Agent; Further
Evidence as to Ownership of Senior Indebtedness..........67
SECTION 1603. Application by Trustee of Assets Deposited with It........67
SECTION 1604. Disputes with Holders of Certain Senior Indebtedness......68
SECTION 1605. Trustee Not Charged with Knowledge of Prohibition.........68
SECTION 1606. Trustee to Effectuate Subordination.......................68
SECTION 1607. Rights of Trustee as Holder of Senior Indebtedness........69
SECTION 1608. Article Applicable to Paying Agents.......................69
SECTION 1609. Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of Senior Indebtedness............69
SECTION 1610. Trustee Not Fiduciary for Holders of Senior Indebtedness..69
iv
<PAGE>
THIS SUBORDINATED INDENTURE, dated as of July 17, 1998, among Dynegy Inc., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at 1000 Louisiana
Street, Suite 5800, Houston, Texas 77002, and The First National Bank of
Chicago, a national banking association, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its subordinated debentures,
notes or other evidences of indebtedness (herein called the "Securities"), to be
issued in one or more series as in this Indenture provided.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, that are required to be part of this Indenture and shall, to
the extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the Company,
in accordance with 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 agreed, for the equal and proportionate
benefit of all Holders of the Securities or of a series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. 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;
(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 in the United States of America, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States of America
at the date of this Indenture; 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, and the words "date of this
Indenture" and "date hereof" and other words of similar import refer to the
effective date of the original execution and delivery of this Indenture,
viz. July 17, 1998.
1
<PAGE>
"Act," when used with respect to any Holder of a Security, has the meaning
specified in Section 104.
"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.
"Authenticating Agent" means any Person authorized by the Trustee pursuant to
Section 614 to act on behalf of the Trustee to authenticate Securities of one or
more series.
"Authorized Newspaper" means a newspaper, in the English language or in an
official language of the country of publication, customarily published on each
Business Day, whether or not published on Saturdays, Sundays or holidays, and of
general circulation in the place in connection with which the term is used or in
the financial community of such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 United States
Code (S)(S) 101 et seq., or any successor statute thereto.
"Bearer Security" means any Security in the form established pursuant to
Section 201 which is payable to bearer, including, without limitation, a
Security in temporary or permanent global form.
"Board of Directors" means, with respect to the Company, either the board of
directors of the Company or any duly authorized committee of that board, and,
with respect to any Subsidiary of the Company, either the board of directors of
such Subsidiary or any duly authorized committee of that board or, if the
Subsidiary is not a corporation, the group of Persons having authority to manage
the Subsidiary or any duly authorized committee of that group.
"Board Resolution" means a copy of a resolution certified by the Secretary or
an Assistant Secretary of the Company or a Subsidiary of the Company to have
been duly adopted by the Board of Directors of the Company or such Subsidiary,
as the case may be, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Security" means a Security bearing the legend specified in
Section 204, evidencing all or part of a series of Securities, issued to the
Depository for such series or its nominee, and registered in the name of such
Depository or nominee. Book-Entry Securities shall not be deemed to be
Securities in global form for purposes of Sections 201 and 203 and Article Three
of this Indenture.
"Business Day," when used with respect to any Place of Payment or any other
particular location referred to in this Indenture or in the Securities, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment or other location are authorized
or obligated by law or executive order to close.
"Capitalized Lease Obligation" means rental obligations under a lease that
are required to be capitalized for financial reporting purposes in accordance
with generally accepted accounting principles, and the amount of Indebtedness
represented by such obligations shall be the capitalized amount of such
obligations, as determined in accordance with generally accepted accounting
principles.
2
<PAGE>
"Capital Stock" means, with respect to any corporation, any and all shares,
interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Certification Date" means with respect to Securities of any series (i), if
Bearer Securities of such series are not to be initially represented by a
temporary global Security, the date of delivery of the definitive Bearer
Security and (ii), if Bearer Securities of such series are initially represented
by a temporary global Security, the earlier of (A) the Exchange Date with
respect to Securities of such series and (B), if the first Interest Payment Date
with respect to Securities of such series is prior to such Exchange Date, such
Interest Payment Date.
"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 under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Depositary" has the meaning specified in Section 304.
"Common Stock" means the Common Stock, par value $.01 per share, of the
Company as the same exists at the date of execution and delivery of this
Indenture or other Capital Stock of the Company into which such Common Stock is
converted, reclassified or changed from time to time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order signed
in the name of the Company by its Chairman of the Board, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Conversion Agent" means any Person authorized by the Company to convert any
Securities on behalf of the Company.
"Conversion Price" has the meaning specified in Section 1504.
"Conversion Shares" has the meaning specified in Section 1504.
"Corporate Trust Office" means the principal office of the Trustee in
Chicago, Illinois, at which at any particular time its corporate trust business
shall be administered.
The term "corporation" means a corporation, association, limited liability
company, joint-stock company, business trust or similar organization.
The term "coupon" means any interest coupon appertaining to a Bearer
Security.
"Date of Conversion" has the meaning set forth in Section 1502.
"Defaulted Interest" has the meaning specified in Section 307.
"Depository" means, with respect to the Securities of any series issuable or
issued in whole or in part in the form of one or more Book-Entry Securities, the
clearing agency registered under the Securities Exchange Act of 1934, as
amended, specified for that purpose as contemplated by Section 301.
3
<PAGE>
"Disqualified Capital Stock" means (a) except as set forth in (b), with
respect to any Person, Capital Stock of such Person that, by its terms or by the
terms of any security into which it is convertible, exercisable or exchangeable,
is, or upon the happening of an event or the passage of time would be, required
to be redeemed or repurchased (including at the option of the holder thereof) by
such Person or any of its Subsidiaries, in whole or in part, on or prior to the
latest Stated Maturity of the principal of any Outstanding Securities and (b)
with respect to any Subsidiary of such Person (including with respect to any
Subsidiary of the Company), any Capital Stock other than any common stock with
no preference, privileges, or redemption or repayment provisions.
"Distribution Date" has the meaning specified in Section 1504.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"Euro-clear" means the operator of the Euro-clear System.
"Event of Default" has the meaning specified in Section 501.
"Exchange Date" has the meaning specified in Section 304.
"Expiration Time" has the meaning specified in Section 1504.
"Funded Indebtedness" means all outstanding indebtedness (including
indebtedness incurred under any revolving credit, letter of credit or working
capital facility) that matures by its terms, or that is renewable at the option
of any obligor thereon to a date, more than one year after the date on which
such indebtedness is originally incurred.
"Holder," when used with respect to any Security, means in the case of a
Registered Security the Person in whose name the Security is registered in the
Security Register and in the case of a Bearer Security the bearer thereof and,
when used with respect to any coupon, means the bearer thereof.
"Indebtedness" means, with respect to any Person, without duplication, (a)
all liabilities and obligations, contingent or otherwise, of any such Person,
(i) in respect of borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof), (ii)
evidenced by bonds, notes, debentures or similar instruments, (iii) representing
the balance deferred and unpaid of the purchase price of any property or
services, except such as would constitute trade payables to trade creditors in
the ordinary course of business, (iv) evidenced by bankers' acceptances or
similar instruments issued or accepted by banks, (v) for the payment of money
relating to a Capitalized Lease Obligation, or (vi) evidenced by a letter of
credit or a reimbursement obligation of such Person with respect to any letter
of credit; (b) all net obligations of such Person under Interest Swap and
Hedging Obligations; (c) all liabilities of others of the kind described in the
preceding clause (a) or (b) that such Person has guaranteed or that is otherwise
its legal liability and all obligations to purchase, redeem or acquire any
Capital Stock; and (d) any and all deferrals, renewals, extensions,
refinancings, refundings (whether direct or indirect) of any liability of the
kind described in any of the preceding clause (a), (b) or (c), or this clause
(d), whether or not between or among the same parties.
"Indenture" means this instrument as originally executed or as it may from
time to time be (i) supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof or
(ii) restated to cumulate the terms of such supplemental indentures, and shall
include the terms of a particular series of Securities established as
contemplated by Section 301 and the provisions of the Trust Indenture Act that
are deemed to be a part of and govern this instrument.
4
<PAGE>
The term "interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Interest Swap and Hedging Obligation" means any obligation of any Person
pursuant to any interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, interest rate exchange agreement, currency
exchange agreement or any other agreement or arrangement designed to protect
against fluctuations in interest rates or currency values, including, without
limitation, any arrangement whereby, directly or indirectly, such Person is
entitled to receive from time to time periodic payments calculated by applying
either a fixed or floating rate of interest on a stated notional amount in
exchange for periodic payments made by such Person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"Issue Date" means the Date on which Securities are originally issued under
this Indenture.
"Junior Security" of any Person means any Qualified Capital Stock and any
Indebtedness of such Person that is subordinated in right of payment to the
Securities of each series then Outstanding and has no scheduled installment of
principal due, by redemption, sinking fund payment or otherwise, on or prior to
the latest Stated Maturity of the principal of any Outstanding Securities.
"Last Sale Price" has the meaning specified in Section 1503.
"Maturity," when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Net Tangible Assets" means the total amount of assets appearing on a
consolidated balance sheet of the Company and its Subsidiaries less, without
duplication: (a) total current liabilities (excluding current maturities of
long-term debt and preferred stock); (b) all reserves for depreciation and other
asset valuation reserves but excluding reserves for deferred federal and state
income taxes; (c) all intangible assets such as goodwill, trademarks, trade
names, patents and unamortized debt discount and expense carried as an asset;
and (d) all appropriate adjustments on account of minority interests of other
Persons holding common stock in any Subsidiary.
"non-electing shares" has the meaning specified in Section 1505.
"Offer" has the meaning specified in Section 1504.
"Officers' Certificate" means a certificate complying with the provisions of
Section 102 signed by the Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company, and who shall be reasonably acceptable
to the Trustee.
"Original Issue Discount Security" means any Security which is issued at a
price lower than the principal amount payable upon the Stated Maturity thereof
and which provides for an amount less than the principal amount thereof to be
due and payable upon redemption thereof or upon a declaration of acceleration of
the Maturity thereof pursuant to Section 502.
5
<PAGE>
"Outstanding," when used with respect to Securities, means, as of the date of
determination, all Securities theretofore authenticated and delivered under this
Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities and any coupons appertaining thereto, provided
that, if such Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company; and
(iv) Securities converted into Common Stock pursuant hereto and, for
purposes of selection for redemption, Securities not deemed Outstanding
pursuant to Section 1103,
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether a
quorum is present at a meeting of Holders of Securities (a) the principal amount
of an Original Issue Discount Security that shall be deemed to be Outstanding
shall be the amount of the principal thereof that would be due and payable as of
the date of such determination upon acceleration of the Maturity thereof
pursuant to Section 502, (b) the principal amount of a Security denominated in a
foreign currency or currencies, including composite currencies, shall be the
Dollar equivalent, determined on the date of original issuance of such Security
in the manner provided as contemplated by Section 301, of the principal amount
(or, in the case of an Original Issue Discount Security, the Dollar equivalent
on the date of original issuance of such Security of the amount determined as
provided in (i) above) of such Security, and (c) Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company, or of
such other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, or
upon any such determination as to the presence of a quorum, only Securities
which the Trustee knows to be so owned shall be so disregarded. 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 the
Company, or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Payment Blockage Period" has the meaning specified in Section 1601.
"Payment Default" has the meaning specified in Section 1601.
"Payment Notice" has the meaning specified in Section 1601.
6
<PAGE>
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, trust, unincorporated organization or government or
any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any series,
means the place or places as specified in accordance with Section 301 where,
subject to the provisions of Section 1002, the principal of and any premium and
interest on the Securities of that series are payable.
"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 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains, as the case may be.
"Principal Property" means any natural gas, natural gas liquids or crude oil
pipeline, distribution system, gathering system, storage facility or processing
plant, except any such property that in the good faith opinion of the Board of
Directors of the Company is not of material importance to the business conducted
by the Company and its consolidated Subsidiaries taken as a whole.
"Principal Subsidiary" means any Subsidiary of the Company which owns a
Principal Property.
"Purchased Shares" has the meaning specified in Section 1504.
"Qualified Capital Stock" means any Capital Stock of the Company that is not
Disqualified Capital Stock.
"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.
"Registered Security" means any Security in the form established pursuant to
Section 201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Registered Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Responsible Officer," when used with respect to the Trustee, shall mean any
officer in the corporate trust department (or any successor group) of the
Trustee, including any Vice President, any Trust Officer, or any other officer
of the Trustee customarily performing functions similar to those performed by
the persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred at the Corporate Trust Office because of his
or her knowledge of and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Indebtedness" means Indebtedness of the Company, whether outstanding
on the date of this Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by the Company, unless
7
<PAGE>
the instrument creating or evidencing such Indebtedness provides that such
Indebtedness is not senior or superior, in right of payment, to the Securities
or to other Indebtedness which is pari passu with, or subordinated to, the
Securities; provided, however, that in no event shall Senior Indebtedness
include (a) Indebtedness of the Company owed or owing to any Subsidiary of the
Company or any officer, director or employee of the Company or any Subsidiary of
the Company except in respect of deferred compensation in an amount not to
exceed $10,000,000 at any one time, (b) Indebtedness to trade creditors, (c) any
liability for taxes owed or owing by the Company and (d) the Securities.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of any series means a date fixed by the Trustee pursuant
to Section 307.
"Stated Maturity," when used with respect to any Security or any installment
of principal thereof or interest thereon, means the date specified in such
Security or a coupon representing such installment of interest as the fixed date
on which the principal of such Security or such installment of principal or
interest is due and payable.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which is owned, directly
or indirectly, by such Person or by one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries, or (ii) any partnership or similar
business organization more than 50% of the ownership interests having ordinary
voting power of which shall at the time be so owned. For the purposes of this
definition, "securities having ordinary voting power" means securities or other
equity interests which ordinarily have voting power for the election of
directors, or persons having management power with respect to the Person,
whether at all times or only so long as no senior class of securities has such
voting power by reason of any contingency.
"Trading Day" has the meaning specified in Section 1503.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture 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" means the Trust Indenture Act of 1939 as in force at
the date as of which this Indenture was executed, except as provided in Section
905; provided, however, that in the event the Trust Indenture Act of 1939 is
amended after such date, "Trust Indenture Act" means, to the extent required by
any such amendment, the Trust Indenture Act of 1939 as so amended.
"United States" means the United States of America (including the States and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal income
tax purposes, is a foreign corporation, a non-resident alien individual, a non-
resident alien fiduciary of a foreign estate or trust, or a foreign partnership
one or more of the members of which is, for United States Federal income tax
purposes, a foreign corporation, a non-resident alien individual or a non-
resident alien fiduciary of a foreign estate or trust.
"U.S. Government Obligations" has the meaning specified in Section 1304.
"Vice President," when used with respect to the Company or the Trustee, means
any vice president, whether or not designated by a number or a word or words
added before or after the title "vice president."
8
<PAGE>
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include
(1) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(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, such Person
has made such examination or investigation as is necessary to enable such
Person 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, in the opinion of each such Person,
such condition or covenant has been complied with.
SECTION 103. Form 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 the Company may be based, insofar
as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer 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 certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such 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 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given 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 duly appointed in
9
<PAGE>
writing. If Securities of a series are issuable as Bearer Securities, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders of such series
may, alternatively, be embodied in and evidenced by the record of Holders of
Securities of such series voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities of
such series duly called and held in accordance with the provisions of Article
Fourteen, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments and so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent or
proxy or of the holding by any Person of a Security, shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section. The
record of any meeting of Holders of Securities shall be proved in the manner
provided in Section 1406.
(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 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 the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust Indenture
Act, fix any day as the record date for the purpose of determining the Holders
of Registered Securities of any series entitled to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or taken by Holders of
Securities of such series. If not set by the Company prior to the first
solicitation of a Holder of Securities of such series made by any Person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701) prior to such first solicitation or vote, as the case
may be. With regard to any record date for action to be taken by the Holders of
one or more series of Securities, only the Holders of Securities of such series
on such date (or their duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action.
(d) The principal amount and serial numbers of Registered Securities held by
any Person, and the date of holding the same, shall be proved by the Security
Register.
(e) The principal amount and serial numbers of Bearer Securities held by any
Person, and the date of holding the same, may be proved by the production of
such Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The principal amount and
serial numbers of Bearer Securities held by any Person, and the date of holding
the same, may also be proved in any other manner which the Trustee deems
sufficient.
10
<PAGE>
(f) Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
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 the Company in
reliance thereon, whether or not notation of such action is made upon such
Security. Any Holder or subsequent Holder may revoke the request, demand,
authorization, direction, notice, consent, waiver or other Act as to his
Security or portion of his Security; provided, however, that such revocation
shall be effective only if the Trustee receives notice of such revocation before
the date the Act becomes effective.
(g) Without limiting the foregoing, a Holder entitled hereunder to give or
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 different part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or Act
of Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Department, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this Indenture, to the attention of its Treasurer, or at
any other address previously furnished in writing to the Trustee by the
Company; and in the case of Bearer Securities, at the address of an office
or agency located outside the United States maintained by the Company in
accordance with Section 1002.
SECTION 106. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein, where this Indenture provides
for notice to Holders of Securities of any event,
(1) such notice shall be sufficiently given to Holders of Registered
Securities if in writing and mailed, first-class postage prepaid, to each
Holder of a Registered Security affected by such event, at the address of
such Holder as it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the
giving of such notice; and
(2) such notice shall be sufficiently given to Holders of Bearer
Securities if published in an Authorized Newspaper in The City of New York
and in such other city or cities as may be specified in such Securities on
a Business Day at least twice, the first such publication to be not earlier
than the earliest date, and not later than the latest date, prescribed for
the giving of such notice.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice to Holders of
Registered Securities by mail, then such notification as shall be made with the
approval of the Trustee shall constitute sufficient notice to such Holders for
every purpose hereunder. In any case where notice to Holders of Registered
Securities is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder of a Registered
Security
11
<PAGE>
shall affect the sufficiency of such notice with respect to other Holders of
Registered Securities or the sufficiency of any notice to Holders of Bearer
Securities given as provided herein.
In case by the reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice to Holders
of Registered Securities given as provided herein.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders of Securities shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 107. Language of Notices, Etc.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
SECTION 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under the Trust Indenture Act to be a
part of and govern this Indenture or any other provision of this Indenture that
is required to be in this Indenture by the Trust Indenture Act, such required
provision shall control. If any provision of this Indenture modifies or
excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
SECTION 109. 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.
SECTION 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind its
successors and assigns, whether so expressed or not.
SECTION 111. Separability Clause.
In case any provision in this Indenture or the Securities or coupons 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 112. Benefits of Indenture.
Nothing in this Indenture or the Securities or coupons, express or implied,
shall give to any Person, other than the parties hereto, their successors
hereunder, the holders of Senior Indebtedness and the Holders of Securities and
coupons, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
12
<PAGE>
SECTION 113. Governing Law.
This Indenture and the Securities and coupons shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of laws.
SECTION 114. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last day for conversion of any Security shall
not be a Business Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture or of the Securities or coupons other than a
provision in the Securities of any series which specifically states that such
provision shall apply in lieu of this Section) payment of interest or principal
(and premium, if any) need not be made at such Place of Payment on such date,
and such conversion need not be made at such Place of Payment on such date, but
may be made on the next succeeding Business Day at such Place of Payment with
the same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity, or on the last date for conversion, as the case
may be, provided that no interest shall accrue on the amount so payable for the
period from and after such date.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Registered Securities, if any, of each series and the Bearer Securities,
if any, of each series and related coupons shall be in substantially the form
(including temporary or permanent global form) as shall be established by or
pursuant to a Board Resolution of the Company 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 law, or with the rules of any securities exchange or to conform to general
usage, all as may, consistently herewith, be determined by the officers
executing such Securities or coupons, as evidenced by their execution of the
Securities or coupons. If temporary Securities of any series are issued in
global form as permitted by Section 304, the form thereof shall be established
as provided in the preceding sentence. A copy of the Board Resolution of the
Company establishing the forms of Securities or coupons of any series (or any
such temporary global Security) shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities (or any such temporary global
Security) or coupons.
Unless otherwise specified as contemplated by Section 301, Securities in
bearer form shall have interest coupons attached.
The definitive Securities and coupons, if any, shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Securities as evidenced by
their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially the
following form:
"This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
13
<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By
---------------------------------
Authorized Officer."
SECTION 203. Securities in Global Form.
If Securities of a series are issuable in global form, as contemplated by
Section 301, then, notwithstanding clause (10) of Section 301 and the provisions
of Section 302, any such Security shall represent such of the Outstanding
Securities of such series as shall be specified therein and may provide that it
shall represent the aggregate amount of Outstanding Securities from time to time
endorsed thereon and that the aggregate amount of Outstanding Securities
represented thereby may be reduced to reflect exchanges. Any endorsement of a
Security in global form to reflect the amount, or any increase or decrease in
the amount, of Outstanding Securities represented thereby shall be made by the
Trustee in such manner and upon instructions given by such Person or Persons as
shall be specified therein or in the Company Order to be delivered to the
Trustee pursuant to Section 303 or Section 304. Subject to the provisions of
Section 303 and, if applicable, Section 304, the Trustee shall deliver and
redeliver any Security in permanent global form in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 303 or 304 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Security in global form
shall be in writing but need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 303.
Notwithstanding the provisions of Sections 201 and 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein.
SECTION 204. Form of Legend for Book-Entry Securities.
Any Book-Entry Security authenticated and delivered hereunder shall bear a
legend in substantially the following form:
"This Security is a Book-Entry Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depository or a
nominee of a Depository. This Security is exchangeable for Securities
registered in the name of a Person other than the Depository or its nominee only
in the limited circumstances described in the Indenture, and no transfer of this
Security (other than a transfer of this Security as a whole by the 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 such limited
circumstances."
14
<PAGE>
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series, and each such series
shall rank equally and pari passu with each other series, but all Securities
issued hereunder shall be subordinate and junior in right of payment, to the
extent and in the manner set forth in Article Sixteen, to all Senior
Indebtedness. There shall be established in or pursuant to a Board Resolution
of the Company and, subject to Section 303, set forth, or determined in the
manner provided, in an Officers' Certificate, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
series:
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities of
the 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 304, 305, 306, 906 or 1107 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(3) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities or both, whether any Securities of the series
are to be issuable initially in temporary global form and whether any
Securities of the series are to be issuable in permanent global form, as
Book Entry Securities, or otherwise, with or without coupons and, if so,
whether beneficial owners of interests in any such permanent global
Security may exchange such interests for Securities of such series and of
like tenor of any authorized form and denomination and the circumstances
under which any such exchanges may occur, if other than in the manner
provided in Section 305;
(4) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than 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, the manner in
which, or the Person to whom, any interest on any Bearer Security of the
series shall be payable, if otherwise than upon presentation and surrender
of the coupons appertaining thereto as they severally mature and the extent
to which, or the manner in which, any interest payable on a temporary
global Security on an Interest Payment Date will be paid if other than in
the manner provided in Section 304;
(5) the date or dates on which the principal of (and premium, if any,
on) the Securities of the series is payable or the method of determination
thereof;
(6) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method by which such rate shall be determined, the
date or dates from which any such interest shall accrue, the Interest
Payment Dates on which any such interest shall be payable, the Regular
Record Date for any interest payable on any Registered Securities on any
Interest Payment Date and whether, and under what circumstances, additional
amounts with respect to such Securities shall be payable as set forth in
Section 1004;
15
<PAGE>
(7) the place or places where, subject to the provisions of Section
1002, the principal of and any premium and interest on Securities of the
series shall be payable, any Registered Securities of the series may be
surrendered for registration of transfer, Securities of the series may be
surrendered for exchange or conversion and notices and demands to or upon
the Company in respect of the Securities of the series and this Indenture
may be served;
(8) the right, if any, of the Company to redeem Securities of the
series, in whole or in part, at its option and the period or periods within
which, the price or prices at which and the terms and conditions upon which
Securities of the series may be so redeemed;
(9) the obligation, if any, of the Company to redeem, purchase, or
repay Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder thereof
and the period or periods within which, the price or prices at which and
the terms and conditions upon which Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(10) the denominations in which any Registered Securities of the
series shall be issuable, if other than denominations of $1,000 and any
integral multiple thereof, and the denomination or denominations in which
any Bearer Securities of the series shall be issuable, if other than the
denomination of $5,000;
(11) the currency or currencies, including composite currencies, in
which payment of the principal of and any premium and interest on any
Securities of the series shall be payable if other than the currency of the
United States and the manner of determining the equivalent thereof in the
currency of the United States for purposes of the definition of
"Outstanding" in Section 101;
(12) if the amount of payments of principal of and any premium or
interest on any Securities of the series may be determined with reference
to an index, the manner in which such amounts shall be determined;
(13) if other than the principal amount thereof, the portion of the
principal amount of any Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 502;
(14) if the principal of and any premium or interest on the Securities
of the series are to be payable, at the election of the Company or a Holder
thereof, in a currency or currencies, including composite currencies, other
than that or those in which the Securities are stated to be payable, the
currency or currencies in which payment of the principal of and any premium
and interest on Securities of such series as to which such election is made
shall be payable, and the periods within which and the terms and conditions
upon which such election is to be made;
(15) whether the Securities of the series shall be issued upon
original issuance in whole or in part in the form of one or more Book-Entry
Securities and, in such case, (a) the Depository with respect to such Book-
Entry Security or Securities and (b) the circumstances under which any such
Book-Entry Security may be exchanged for Securities registered in the name
of, and any transfer of such Book-Entry Security may be registered to, a
Person other than such Depository or its nominee, if other than as set
forth in Section 305;
(16) if either or both of the provisions of Section 1302 or 1303 are
applicable to the Securities of such series and any additional means of
discharge pursuant to Section 1302 or 1303 and any additional conditions to
the provisions of Section 1302 or 1303;
16
<PAGE>
(17) any other Events of Default or covenants with respect to the
Securities of such series; and
(18) whether the Securities of the series will be convertible into
Common Stock (or cash in lieu thereof) and, if so, the terms and conditions
upon which such conversion will be effected including the initial
Conversion Price and any adjustments thereto in addition to or different
from those set forth in Section 1504, the conversion period and other
provisions in addition to or in lieu of those set forth herein;
(19) any subordination provisions with respect to the Securities of
such series in addition to or in lieu of those set forth in Article Sixteen
hereof; and
(20) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture except as permitted by
Section 901(5)).
All Securities of any one series and the coupons appertaining to any Bearer
Securities of such series shall be substantially identical except, in the case
of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to the Board Resolution referred to above and (subject
to Section 303) set forth, or determined in the manner provided, in the
Officers' Certificate referred to above or in any such indenture supplemental
hereto.
If any of the terms of the 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 the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
SECTION 302. Denominations.
Unless otherwise provided as contemplated by Section 301 with respect to any
series of Securities, any Registered Securities of a series shall be issuable in
denominations of $1,000 and any integral multiple thereof and any Bearer
Securities of a series shall be issuable in the denomination of $5,000.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman of
the Board, its President, its Treasurer or its Chief Financial Officer, under
its corporate seal reproduced thereon 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. Coupons shall bear the facsimile signature of the
Treasurer or any Assistant Treasurer of the Company.
Securities and coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, 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 or coupons.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series, together with any
coupons appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
unless otherwise provided with respect to such series, in connection with its
original issuance, during the "restricted period" (as defined in Section 1.163-
5(c)(2)(i)(D)(7) of the United States Treasury Regulations) (the "restricted
period") no Bearer Security shall be mailed or otherwise delivered to any
17
<PAGE>
location in the United States; and provided, further, that, unless otherwise
provided with respect to such series, a Bearer Security may be delivered in
connection with its original issuance only if the Person entitled to receive
such Bearer Security shall have furnished a certificate in the form set forth in
Exhibit A to this Indenture, dated no earlier than the Certification Date. If
any Security shall be represented by a permanent global Bearer Security, then,
for purposes of this Section and Section 304, the notation of a beneficial
owner's interest therein upon original issuance of such Security or upon
exchange of a portion of a temporary global Security shall be deemed to be
delivery in connection with its original issuance during the restricted period
of such beneficial owner's interest in such permanent global Security. Except
as permitted by Section 306, the Trustee shall not authenticate and deliver any
Bearer Security unless all appurtenant coupons for interest then matured have
been detached and cancelled.
In authenticating Securities, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion
of Counsel stating:
(a) that the forms of such Securities and coupons established by or
pursuant to a Board Resolution of the Company as contemplated by Section
201 have been established in conformity with the provisions of this
Indenture;
(b) if the terms of such Securities and any coupons have been
established by or pursuant to a Board Resolution of the Company as
permitted by Section 301, that such terms have been established in
conformity with the provisions of this Indenture; and
(c) that such Securities, together with any coupons appertaining
thereto, when authenticated and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions specified in such
Opinion of Counsel, will constitute valid and legally binding obligations
of the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization and other laws
of general applicability relating to or affecting creditors' rights and to
general equity principles.
Such Opinion of Counsel shall also cover such other matters as the Trustee may
reasonably request.
The Trustee shall not be required to authenticate such Securities the forms
or terms of which have been established by or pursuant to a Board Resolution of
the Company 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 301 and of the two preceding
paragraphs, 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 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraphs at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon issuance of the first Security
of such series to be issued.
After the original issuance of the first Security of such series to be
issued, any separate request by the Company that the Trustee authenticate
Securities of such series for original issuance will be deemed to be a
certification by the Company (which, subject to Section 601, the Trustee shall
be fully protected in relying on) that it is in compliance with all conditions
precedent provided for in this Indenture relating to the authentication and
delivery of such Securities.
Each Registered Security shall be dated the date of its authentication; and
each Bearer Security shall be dated as of the date of original issuance of the
first Security of such series to be issued.
18
<PAGE>
No Security or coupon shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security,
or the Security to which such coupon appertains, a certificate of authentication
substantially in the form provided for herein executed by the Trustee by manual
signature, 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 the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued, in registered form or,
if authorized, in bearer form with one or more coupons or without coupons, 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. In the case of any series issuable as Bearer
Securities, such temporary Securities may be in global form. A temporary Bearer
Security shall be delivered only in compliance with the conditions set forth in
Section 303.
Except in the case of temporary Securities in global form (which shall be
exchanged in accordance with the provisions of the following paragraphs), if
temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company maintained pursuant to Section 1002 in a Place
of Payment for such series for the purpose of exchanges of Securities of such
series without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series (accompanied by any unmatured coupons
appertaining thereto) the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like aggregate principal amount
of definitive Securities of the same series and of like tenor of authorized
denominations; provided, however, that no definitive Bearer Security shall be
issued in exchange for a temporary Registered Security.
If temporary Securities of any series are issued in global form, any such
temporary global Security shall, unless otherwise provided therein, be delivered
to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of Euro-clear and CEDEL S.A., for credit to the
respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date specified
in, or determined pursuant to the terms of, any such temporary global Security
of a series (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities of that series in aggregate principal amount equal to the
principal amount of such temporary global Security, executed by the Company. On
or after the Exchange Date such temporary global Security shall be surrendered
by the Common Depositary to the Trustee, as the Company's agent for such
purpose, to be exchanged, in whole or from time to time in part, for definitive
Securities of that series without charge and the Trustee shall authenticate and
deliver, in exchange for each portion of such temporary global Security, a like
aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such temporary
global Security to be exchanged; provided, however, that, unless otherwise
specified in such temporary global Security, upon such presentation by the
Common Depositary, such temporary global Security is accompanied by a
certificate dated the Exchange
19
<PAGE>
Date or a subsequent date and signed by Euro-clear as to the portion of such
temporary global Security held for its account then to be exchanged and a
certificate dated the Exchange Date or a subsequent date and signed by CEDEL
S.A. as to the portion of such temporary global Security held for its account
then to be exchanged, each in the form set forth in Exhibit B to this Indenture.
The definitive Securities to be delivered in exchange for any such temporary
global Security shall be in bearer form, registered form, permanent global
bearer form or permanent global registered form, or any combination thereof, as
specified as contemplated by Section 301, and if any combination thereof is so
specified, as requested by the beneficial owner thereof; provided, however, that
no definitive Bearer Security or permanent global Security shall be delivered in
exchange for a temporary Bearer Security except in compliance with the
conditions set forth in Section 303.
Unless otherwise specified in the temporary global Security, the interest of
a beneficial owner of Securities of a series in a temporary global Security
shall be exchanged on the Exchange Date for definitive Securities (and where the
form of the definitive Securities is not specified by the Holder for an interest
in a permanent global Security) of the same series and of like tenor unless, on
or prior to the Exchange Date, such beneficial owner has not delivered to Euro-
clear or CEDEL S.A., as the case may be, a certificate in the form set forth in
Exhibit A to this Indenture dated no earlier than the Certification Date,
copies of which certificate shall be available from the offices of Euro-clear
and CEDEL S.A., the Trustee, any Authenticating Agent appointed for such series
of Securities and each Paying Agent and after the Exchange Date, the interest of
a beneficial owner of Securities of a series in a temporary global Security
shall be exchanged for definitive Securities (and where the form of the
definitive Securities is not specified by the Holder for an interest in a
permanent global Security) of the same series and of like tenor following such
beneficial owner's delivery to Euro-clear or CEDEL S.A., as the case may be, of
a certificate in the form set forth in Exhibit A to this Indenture dated no
earlier than the Certification Date. Unless otherwise specified in such
temporary global Security, any exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like in the event that such Person does not take delivery
of such definitive Securities in person at the offices of Euro-clear or CEDEL
S.A. Definitive Securities in bearer form to be delivered in exchange for any
portion of a temporary global Security shall be delivered only outside the
United States.
Until exchanged in full as hereinabove provided, the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless otherwise specified
as contemplated by Section 301, interest payable on a temporary global Security
on an Interest Payment Date for Securities of such series shall be payable to
Euro-clear and CEDEL S.A. on such Interest Payment Date upon delivery by Euro-
clear and CEDEL S.A. to the Trustee of a certificate or certificates in the form
set forth in Exhibit B to this Indenture, for credit without further interest on
or after such Interest Payment Date to the respective accounts of the Persons
who are the beneficial owners of such temporary global Security on such Interest
Payment Date and who have each delivered to Euro-clear or CEDEL S.A., as the
case may be, a certificate in the form set forth in Exhibit A to this Indenture.
Any interest so received by Euro-clear and CEDEL S.A. and not paid as herein
provided shall be returned to the Trustee immediately prior to the expiration of
two years after such Interest Payment Date in order to be repaid to the Company
in accordance with Section 1003.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at an office or agency to be maintained by
the Company in accordance with Section 1002 a register (being the combined
register of the Security Registrar and all transfer agents designated pursuant
to Section 1002 for the purpose of registration of transfer of Securities and
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of each series of Registered Securities and the
registration of transfers of such Registered Securities. The Company shall
serve initially as "Security Registrar" for the purpose of registering
Registered Securities and transfers of Registered Securities as herein provided.
20
<PAGE>
Upon surrender for registration of transfer of any Registered Security of any
series at the office or agency of the Company maintained pursuant to Section
1002 for such purpose in a Place of Payment for such series, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Registered Securities of
the same series of any authorized denominations and of a like aggregate
principal amount and tenor.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Securities to be exchanged at any such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive. Unless otherwise provided with respect to
any series of Securities, Bearer Securities may not be issued in exchange for
Registered Securities.
At the option of the Holder, Bearer Securities of any series may be exchanged
for Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, such exchange may be effected if the
Bearer Securities are accompanied by payment in funds acceptable to the Company
in an amount equal to the face amount of such missing coupon or coupons, or the
surrender of such missing coupon or coupons may be waived by the Company and the
Trustee if there is furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Security shall surrender to any Paying Agent any such missing
coupon in respect of which such a payment shall have been made, such Holder
shall be entitled to receive the amount of such payment; provided, however,
that, except as otherwise provided in Section 1002, interest represented by
coupons shall be payable only upon presentation and surrender of those coupons
at an office or agency located outside the United States. Notwithstanding the
foregoing, in case a Bearer Security of any series is surrendered at any such
office or agency in exchange for a Registered Security of the same series and
like tenor after the close of business at such office or agency on (i) any
Regular Record Date and before the opening of business at such office or agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and
before the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such Interest Payment Date or
proposed date for payment, as the case may be, and interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security but will be payable only to
the Holder of such coupon when due in accordance with the provisions of this
Indenture.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as contemplated
by Section 301, any permanent global Security shall be exchangeable only as
provided in this paragraph. If the beneficial owners of interests in a
permanent global Security are entitled to exchange such interests for Securities
of such series and of like tenor and principal amount of another authorized form
and denomination, as specified as contemplated by Section 301, then without
unnecessary delay but in any event not later than the earliest date on which
such interests may be so exchanged, the Company shall deliver to the Trustee
definitive Securities of that series in an aggregate principal amount equal to
the principal amount of such permanent global Security, executed by the Company.
On or after the earliest date on which such interests may be so exchanged, such
permanent global Security shall be surrendered from time to time in accordance
with instructions given to the Trustee and the Common Depositary (which
instructions shall be in writing but need not comply with Section 102 or be
accompanied by an Opinion of Counsel) by the Common Depositary or such other
depositary or Common Depositary as shall be specified in the Company Order with
respect thereto to the Trustee, as the
21
<PAGE>
Company's agent for such purpose, to be exchanged, in whole or in part, for
definitive Securities of the same series without charge and the Trustee shall
authenticate and deliver, in exchange for each portion of such permanent global
Security, a like aggregate principal amount of definitive Securities of the same
series of authorized denominations and of like tenor as the portion of such
permanent global Security to be exchanged which, unless the Securities of the
series are not issuable both as Bearer Securities and as Registered Securities,
as specified as contemplated by Section 301, shall be in the form of Bearer
Securities or Registered Securities, or any combination thereof, as shall be
specified by the beneficial owner thereof; provided, however, that no such
exchanges may occur during a period beginning at the opening of business 15 days
before any selection of Securities of that series is to be redeemed and ending
on the relevant Redemption Date; and provided, further, that no Bearer Security
delivered in exchange for a portion of a permanent global Security shall be
mailed or otherwise delivered to any location in the United States. Promptly
following any such exchange in part, such permanent global Security shall be
returned by the Trustee to the Common Depositary or such other depositary or
Common Depositary referred to above in accordance with the instructions of the
Company referred to above. If a Registered Security is issued in exchange for
any portion of a permanent global Security after the close of business at the
office or agency where such exchange occurs on (i) any Regular Record Date and
before the opening of business at such office or agency on the relevant Interest
Payment Date, or (ii) any Special Record Date and before the opening of business
at such office or agency on the related proposed date for payment of Defaulted
Interest, interest or Defaulted Interest, as the case may be, will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of such Registered Security, but will be payable on such
Interest Payment Date or proposed date for payment, as the case may be, only to
the Person to whom interest in respect of such portion of such permanent global
Security is payable in accordance with provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Trustee or any
transfer agent) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar or any
transfer agent duly executed, by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or exchange
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before any selection of Securities of that series to be
redeemed and ending at the close of business on (A) if Securities of the series
are issuable only as Registered Securities, the day of the mailing of the
relevant notice of redemption and (B) if Securities of the series are issuable
as Bearer Securities, the day of the first publication of the relevant notice of
redemption, or if Securities of the series are also issuable as Registered
Securities and there is no publication, the mailing of the relevant notice of
redemption, or (ii) to register the transfer of or exchange any Registered
Security so selected for redemption, in whole or in part, except the unredeemed
portion of any Registered Security being redeemed in part, or (iii) to exchange
any Bearer Security so selected for redemption except that such a Bearer
Security may be exchanged for a Registered Security of that series and like
tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption.
Notwithstanding the foregoing and except as otherwise specified or
contemplated by Section 301, any Book-Entry Security shall be exchangeable
pursuant to this Section 305 or Sections 304, 906 and 1107 for Securities
registered in the name of, and a transfer of a Book-Entry Security of any series
may be registered
22
<PAGE>
to, any Person other than the Depository for such Security or its nominee only
if (i) such Depository notifies the Company that it is unwilling or unable to
continue as Depository for such Book-Entry Security or if at any time such
Depository ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, (ii) the Company executes and delivers to the
Trustee a Company Order that such Book-Entry Security shall be so exchangeable
and the transfer thereof so registrable or (iii) there shall have occurred and
be continuing an Event of Default, with respect to the Securities of such
series. Upon the occurrence in respect of any Book-Entry Security of any series
of any one or more of the conditions specified in clause (i), (ii) or (iii) of
the preceding sentence or such other conditions as may be specified, such Book-
Entry Security may be exchanged for Securities registered in the names of, and
the transfer of such Book-Entry Security may be registered to, such Persons
(including Persons other than the Depository with respect to such series and its
nominees) as such Depository shall direct. Notwithstanding any other provision
of this Indenture, any Security authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, any Book-Entry Security shall
also be a Book-Entry Security and shall bear the legend specified in Section 204
except for any Security authenticated and delivered in exchange for, or upon
registration of transfer of, a Book-Entry Security pursuant to the preceding
sentence.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities and Coupons.
If any mutilated Security or a Security with a mutilated coupon appertaining
thereto is surrendered to the Trustee, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor a new Security of the same
series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to the surrendered Security.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security or coupon
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security or coupon has been acquired by a
bona fide purchaser, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Security
or in exchange for the Security to which a destroyed, lost or stolen coupon
appertains (with all appurtenant coupons not destroyed, lost or stolen), a new
Security of the same series and of like tenor and principal amount and bearing a
number not contemporaneously outstanding, with coupons corresponding to the
coupons, if any, appertaining to such destroyed, lost or stolen Security or to
the Security to which such destroyed, lost or stolen coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or coupon has
become or is about to become due and payable, or is being surrendered for
conversion in full, the Company in its discretion may, instead of issuing a new
Security, pay such Security or coupon; or authorize the conversion thereof
(without surrender thereof except in the case of a mutilated Security or
coupon); provided, however, that the principal of and any premium and interest
on Bearer Securities shall, except as otherwise provided in Section 1002, be
payable only at an office or agency located outside the United States.
Upon the issuance of any new Security under this Section, the Company may
require 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 of any series with its coupons, if any, issued pursuant to
this Section in lieu of any destroyed, lost or stolen Security or in exchange
for a Security to which a destroyed, lost or stolen coupon appertains, shall
constitute an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Security and its coupons, if any, or the
destroyed, lost or stolen coupon shall be at any time enforceable by anyone, and
any such new Security and coupons, if any, shall be entitled to all the benefits
23
<PAGE>
of this Indenture equally and proportionately with any and all other Securities
of that series and their coupons, if any, 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,
payment or conversion of mutilated, destroyed, lost or stolen Securities or
coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by Section 301 with respect to any
series of Securities, interest on any Registered Security 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. Unless otherwise so provided, at the option of the Company,
payment of interest on any Registered Security may be made by check mailed on or
before the due date to the address of the Person entitled thereto as such
address shall appear in the Security Register.
Any interest on any Registered Security of any series which is payable, but
is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Registered Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall 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 the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Registered Securities of such series at the address of
such Holder as it appears in the Security 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 the Company, cause a similar notice to be
published at least once in an Authorized Newspaper, provided 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 so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Registered Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be then listed, and upon such notice as may be
24
<PAGE>
required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this Clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305, each
Security delivered under this Indenture upon registration of 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 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Sections 305 and 307) any
interest on such Registered Security and for all other purposes whatsoever,
whether or not such Security be overdue, and none of the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
Title to any Bearer Security and any coupons appertaining thereto shall pass
by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of any coupon
as the owner of such Bearer Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or coupon be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
Notwithstanding the foregoing, with respect to any Book-Entry Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by a Depository or impair, as between a
Depository and holders of beneficial interests in any Book-Entry Security, the
operation of customary practices governing the exercise of the rights of the
Depository (or its nominee) as Holder of such Book-Entry Security.
SECTION 309. Cancellation.
All Securities and coupons surrendered for payment, redemption, registration
of transfer, conversion or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee. All Registered Securities and matured coupons so delivered
shall be promptly cancelled by the Trustee. All Bearer Securities and
unmatured coupons so delivered shall be held by the Trustee and, upon
instruction by a Company Order, shall be cancelled or held for reissuance.
Bearer Securities and unmatured coupons held for reissuance may be reissued only
in replacement of mutilated, lost, stolen or destroyed Bearer Securities of the
same series and like tenor or the related coupons pursuant to Section 306. All
Bearer Securities and unmatured coupons held by the Trustee pending such
cancellation or reissuance shall be deemed to be delivered for all purposes of
this Indenture and the Securities. The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
cancelled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Securities and coupons
held by the Trustee shall be disposed of in accordance with its customary
practice.
25
<PAGE>
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect with
respect to Securities of a Series (except as to any surviving rights of
registration of transfer or exchange of Securities herein expressly provided
for, and any right to receive additional amounts, as provided in Section 1004),
and the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to
Securities of a Series, when
(1) either
(A) all Securities of such Series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than (i)
coupons appertaining to Bearer Securities surrendered for exchange for
Registered Securities and maturing after such exchange, whose surrender is
not required or has been waived as provided in Section 305, (ii) Securities
and coupons which have been destroyed, lost or stolen and which have been
replaced, converted or paid as provided in Section 306, (iii) coupons
appertaining to Securities called for redemption and maturing after the
relevant Redemption Date, whose surrender has been waived as provided in
Section 1106, and (iv) Securities and coupons for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust,
as provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) with respect to all such Securities and, in the case of (i) or
(ii) below, any coupons appertaining thereto 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, 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 the
Company;
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the
purpose an amount sufficient to pay and discharge the entire indebtedness
on such Securities and coupons not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and any 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) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
26
<PAGE>
(3) the Company 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 the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to clause (1)(B) of this Section,
the obligations of the Company under Sections 306, 610(e) and 701 and the
obligations of the Trustee under Section 402 and the last paragraph of Section
1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities, the coupons
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default," wherever used herein with respect to 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 the provisions of Article Sixteen hereof or by operation of law or pursuant
to any judgment, decree or order, rule or regulation of any administrative or
governmental body), unless it is either inapplicable to a particular series of
Securities or it is specifically deleted or modified in or pursuant to the terms
of such series or in the form of Security of such series:
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; 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 deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) INTENTIONALLY OMITTED;
(5) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of series of Securities other than that
series), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least
25% in principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder;
or
27
<PAGE>
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company as bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of the property of the Company, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a
period of 90 consecutive days; or
(7) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or the commencement of any
bankruptcy or insolvency case or proceeding against the Company, or the
filing by the Company of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or state law, or the
consent by the Company to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or of any
substantial part of the property of the Company, or the making by the
Company of an assignment for the benefit of creditors, or the admission by
the Company in writing of its inability to pay its debts generally as they
become due, or the taking of corporate action by the Company in furtherance
of any such action; or
(8) any other Event of Default provided with respect to Securities of
that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount (or, if any of the Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified in the terms thereof) of
all of the Securities of that series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified amount) shall
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 the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on, and any additional amounts payable
as set forth in Section 1004 on, all Securities of that series and any
coupons appertaining thereto,
(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 any interest thereon at the rate or rates
prescribed therefor in such Securities,
28
<PAGE>
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest, and any additional amounts payable as
set forth in Section 1004 on, at the rate or rates prescribed therefor
in such Securities, and
(D) 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 have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities and coupons, the whole amount then due and payable on
such Securities and coupons for principal and any premium and interest and, to
the extent that payment of such interest shall be legally enforceable, interest
on any overdue principal and premium and on any overdue interest, at the rate or
rates prescribed therefor in such Securities (or, in the case of Original Issue
Discount Securities, the Securities' yield to maturity) and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
related coupons by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), or the property or the creditors of the Company,
the Trustee shall be entitled and empowered, by intervention in such proceeding
or otherwise, to take any and all actions authorized under the Trust Indenture
Act in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, subject to Article
29
<PAGE>
Sixteen hereof, the Trustee shall be authorized to collect and receive any
moneys or other property payable or deliverable on any such claims and to
distribute the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of Holders, vote for the election of a trustee
of bankruptcy or similar official and be a member of a creditors' or other
similar committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or
Coupons.
All rights of action and claims under this Indenture or the Securities or
coupons may be prosecuted and enforced by the Trustee without the possession of
any of the Securities or coupons or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities and coupons in respect
of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee 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 on account of principal or any
premium or interest, upon presentation of the Securities or coupons, or both as
the case may be, 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 under Section
607; and
SECOND: Subject to Article Sixteen hereof, to the payment of the
amounts then due and unpaid for principal of and any premium and interest
on the Securities and coupons 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
Securities and coupons for principal and any premium and interest,
respectively.
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
In any case in which Securities are Outstanding that are denominated in
more than one currency and the Trustee is directed to make ratable payments
under this Section to Holders of such Securities, unless otherwise provided with
respect to any series of Securities, the Trustee shall calculate the amount of
such payments as follows: (i) as of the day the Trustee collects an amount under
this Article, the Trustee shall, as to each Holder of a Security to whom an
amount is due and payable under this Section that is denominated in a foreign
currency, determine that amount in Dollars that would be obtained for the amount
owing such Holder, using the rate of exchange at which in accordance with normal
banking procedures the Trustee could purchase in The City of New York Dollars
with such amount owing; (ii) calculate the sum of all Dollar amounts determined
under (i) and add thereto any amounts due and payable in Dollars; and (iii)
using the individual amounts determined in (i) or any individual amounts due and
payable in Dollars, as the case may be, as a
30
<PAGE>
numerator, and the sum calculated in (ii) as a denominator, calculate as to each
Holder of a Security to whom an amount is owed under this Section the fraction
of the amount collected under this Article payable to such Holder. Any expenses
incurred by the Trustee in actually converting amounts owing Holders of
Securities denominated in a currency other than that in which any amount is
collected under this Article shall be likewise (in accordance with this
paragraph) borne ratably by all Holders of Securities to whom amounts are
payable under this Section.
To the fullest extent allowed under applicable law, if for the purpose of
obtaining judgment against the Company in any court it is necessary to convert
the sum due in respect of the principal of, or premium, if any, or interest on,
the Securities of any series (the "Required Currency") into a currency in which
a judgment will be rendered (the "Judgment Currency"), the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in The City of New York the Required Currency with the
Judgment Currency on the Business Day in the City of New York next preceding
that on which final judgment is given. Neither the Company nor the Trustee
shall be liable for any shortfall nor shall it benefit from any windfall in
payments to Holders of Securities under this Section caused by a change in
exchange rates between the time the amount of a judgment against the Company is
calculated as above and the time the Trustee converts the Judgment Currency into
the Required Currency to make payments under this Section to Holders of
Securities, but payment of such judgment shall discharge all amounts owed by the
Company on the claim or claims underlying such judgment.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any related coupons shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, 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
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 indemnity has failed to institute any such proceeding; and
(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 of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, 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.
31
<PAGE>
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture (but subject to
Article Sixteen hereof), the Holder of any Security or coupon shall have the
right, which is absolute and unconditional, to receive payment of the principal
of and any premium and (subject to Sections 305 and 307) any interest on such
Security or payment of such coupon on the Stated Maturity or Maturities
expressed in such Security or coupon (or, in the case of redemption, on the
Redemption Date) and, if applicable, to convert such Security as provided in
Article Fifteen and to institute suit for the enforcement of any such payment or
conversion right, and such rights shall not be impaired without the consent of
such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or coupon 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 or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders of Securities and coupons shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or coupons in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Securities or coupons 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 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 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security or
coupon 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 of Securities or coupons may
be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Securities or coupons, as the case may be.
SECTION 512. Control by Holders of Securities.
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture;
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
(3) the Trustee shall not be obligated to take any action unduly
prejudicial to Holders not joining in such direction or involving the
Trustee in personal liability.
32
<PAGE>
SECTION 513. Waiver of Past Defaults.
The Holders of a majority in principal amount of the Outstanding Securities
of any series may on behalf of the Holders of all the Securities of such series
waive any past default hereunder with respect to the Securities of such series
and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on
any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
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, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
SECTION 515. Waiver of Stay or Extension Laws.
The Company 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 to
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and 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 SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, 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. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
33
<PAGE>
SECTION 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series, the
Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
501(5) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) 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, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors of the Company shall be sufficiently
evidenced by a Board Resolution of the Company;
(3) 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;
(4) the Trustee may consult with counsel and the written 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;
(5) 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;
(6) 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, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney; and
(7) 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.
34
<PAGE>
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities (except the Trustee's
certificates of authentication) and in any coupons shall be taken as the
statements of the Company and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities or
coupons. The Trustee or any Authenticating Agent shall not be accountable for
the use or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and coupons and, subject
to Sections 608 and 613, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
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 with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee and each predecessor 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 the Trustee and each predecessor Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
The obligations of the Company under this Section shall not be subordinated
to the payment of Senior Indebtedness pursuant to Article Sixteen hereof, and as
security for the performance of such obligations, the Trustee shall have a lien
prior to the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the Holders of
particular Securities.
Any expenses and compensation for any services rendered by the Trustee
after the occurrence of an Event of Default specified in clause (6) or (7) of
Section 501 shall constitute expenses and compensation for services of
administration under all applicable federal or state bankruptcy, insolvency,
reorganization or other similar laws.
35
<PAGE>
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States,
any State thereof or the District of Columbia, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by Federal or State
authority. If such corporation 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 corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article. No obligor upon any Security
issued under this Indenture or a person directly or indirectly controlling,
controlled by or under common control with such obligor shall serve as Trustee
under this Indenture.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder of a Security who has been
a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or a public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
36
<PAGE>
then, in any case, (i) the Company by a Board Resolution may remove the Trustee
with respect to all Securities, or (ii) subject to Section 514, any Holder of a
Security who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of the Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all series and that at any time there shall be only one Trustee with respect
to the Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the successor
Trustee with respect to the Securities of such series and to that extent
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders of Securities of such series and
accepted appointment in the manner required by Section 611, any Holder of a
Security who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series. Such court may
thereupon, after such notice, if any, as it may deem proper, appoint a successor
Trustee.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series in the manner
provided in Section 106. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.
SECTION 611. 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 the Company 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 further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee, with like effect as
if originally named Trustee hereunder; but on the request of the Company 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. Any Trustee ceasing to act shall,
nevertheless, retain a prior lien upon all property or funds held or collected
by such Trustee to secure any amounts then due it pursuant to the provisions of
Section 607.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, 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,
37
<PAGE>
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 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
as 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 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 the Company 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 successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such 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 612. 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 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 with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (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
the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may, by an instrument in writing, appoint an Authenticating
Agent or Agents with respect to one or more series of Securities which may be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon original issue or upon exchange, registration of transfer or
partial redemption thereof or pursuant to Section 306, 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 the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States, any State thereof or the District of Columbia (or, if Bearer Securities,
organized and doing business
38
<PAGE>
under the laws of the country in which the Bearer Securities are eligible),
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 (or, if Bearer Securities, an
authority of the country in which the Bearer Securities are eligible). 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 the corporate agency or
corporate trust business of such Authenticating Agent, shall continue to be an
Authenticating Agent, 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 such Authenticating Agent.
An Authenticating Agent may, and if it shall cease to be eligible shall,
resign at any time by giving written notice thereof to the Trustee and to the
Company. The Trustee may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof to such Authenticating Agent and to the
Company. Upon receiving such notice of resignation or upon such 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 the Company and
shall mail written notice of such appointment by first-class mail, postage
prepaid, to all Holders of Registered Securities, if any, of the series with
respect to which such Authenticating Agent will serve, as their names and
addresses appear in the Security Register. 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 provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payment, subject to the provisions
of Section 607.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have been 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 of the series designated therein
referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
As Trustee
By: _______________________________
As Authenticating Agent
By: _______________________________
Authorized Officer"
39
<PAGE>
If all the Securities of a series may not be originally issued at one time,
and if the Company has an Affiliate eligible to be appointed as an
Authenticating Agent hereunder or the Trustee does not have an office capable of
authenticating Securities upon original issuance located in a Place of Payment
where the Company wishes to have Securities of such series authenticated upon
original issuance, the Trustee, if so requested by the Company in writing (which
writing need not comply with Section 102 and need not be accompanied by an
Opinion of Counsel), shall appoint in accordance with this Section an
Authenticating Agent (which, if so requested by the Company, shall be such
Affiliate of the Company) having an office in a Place of Payment designated by
the Company with respect to such series of Securities.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
With respect to each series of Securities, the Company will furnish or
cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after a Regular Record Date, a
list, in such form as the Trustee may reasonably require, containing all the
information in the possession or control of the Company, or any of its Paying
Agents other than the Trustee, as to the names and addresses of the Holders of
Securities as of the immediately preceding Regular Record Date, and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company 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 Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701, and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of any of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).
SECTION 703. Reports by Trustee.
(a) on or before July 15 in each year following the date hereof, the
Trustee shall transmit to Holders such reports concerning the Trustee and its
actions under this Indenture as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto.
40
<PAGE>
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed (or delisted) on any
stock exchange.
SECTION 704. Reports by Company.
In addition to the certificates delivered to the Trustee pursuant to
Section 1007, the Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company 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 other Person, unless:
(1) the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, partnership or trust, shall be organized
and validly existing under the laws of the United States, any state thereof
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 any premium and interest (including all additional amounts, if any,
payable pursuant to Section 1004) on all the Securities and the performance
or observance of every other covenant of this Indenture on the part of the
Company to be performed or observed;
(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 occurred and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor Person formed by such consolidation or into which the Company
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, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and thereafter, except in the case of a
lease, the
41
<PAGE>
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities and coupons and may liquidate and dissolve.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities or coupons, the Company,
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
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities pursuant to Article Eight; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities and any coupons appertaining
thereto (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), to convey, transfer,
assign, mortgage or pledge any property to or with the Trustee or otherwise
secure any series of the Securities or to surrender any right or power
herein conferred upon the Company; or
(3) to add any additional Events of Default with respect to all or any
series of the Securities (and, if such Event of Default is applicable to
less than all series of Securities, specifying the series to which such
Event of Default is applicable); or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of or any
premium or interest on Bearer Securities, to permit Bearer Securities to be
issued in exchange for Registered Securities, to permit Bearer Securities
to be issued in exchange for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of Securities in
uncertificated form, provided that any such action shall not adversely
affect the interests of the Holders of Securities of any series or any
related coupons in any material respect; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any
such addition, change or elimination (A) shall neither (i) apply to any
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (ii) modify the
rights of the Holder of any such Security with respect to such provision or
(B) shall become effective only when there is no such Security Outstanding;
or
(6) provide for adjustment of conversion rights pursuant to Section
1505 hereof; or
(7) to establish the form or terms of Securities of any series and any
related coupons as permitted by Sections 201 and 301; 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 611(b); or
42
<PAGE>
(9) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be defective or
inconsistent with any other provision herein or in any supplemental
indenture, or to make any other provisions with respect to matters or
questions arising under this Indenture; provided, however, that such action
shall not adversely affect the interests of the Holders of Securities of
any series or any related coupons in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of a majority in principal amount of the
Outstanding Securities of each series affected by such supplemental indenture,
by Act of said Holders delivered to the Company and the Trustee, the Company,
when authorized by 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 and any related coupons under this Indenture; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable upon
the redemption thereof, or change the Redemption Date thereof, or change
any obligation of the Company to pay additional amounts pursuant to Section
1004 (except as contemplated by Section 801(1) and permitted by Section
901(1)), or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502 or change the
coin or currency in which any Security or any premium or interest thereon
is payable, or change any right of redemption, purchase or repayment by the
Company at the option of the Holder, or adversely affect the right to
convert Securities, if applicable, or impair the right to institute suit
for the enforcement of (x) any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date),
or (y) any conversion right with respect to any Security, 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 reduce the requirements of Section 1404 for quorum or voting,
or
(3) change any obligation of the Company to maintain an office or
agency in the places and for the purposes specified in Section 1002, or
(4) modify any of the provisions of this Section, Section 513 or
Section 1008 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 Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to require
the consent of any Holder of a Security or coupon with respect to changes
in the references to "the Trustee" and concomitant changes in this Section
and Section 1008 or the deletion of this provision, in accordance with the
requirements of Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of 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 of any other series.
43
<PAGE>
It shall not be necessary for any Act of Holders of Securities 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 903. 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 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. 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 904. 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
and of any coupons appertaining thereto shall be bound thereby.
SECTION 905. 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 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company, and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series and of like tenor.
SECTION 907. Subordinated Unimpaired.
This Indenture may not be amended to alter the subordination of any
Outstanding Securities without the written consent of each holder of Senior
Indebtedness then outstanding that would be adversely affected thereby.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities, any coupons appertaining thereto and this Indenture. Unless
otherwise specified as contemplated by Section 301 with respect to any series of
Securities, any interest due on Bearer Securities
44
<PAGE>
on or before Maturity shall be payable only upon presentation and surrender of
the several coupons for such interest installments as are evidenced thereby as
they severally mature.
SECTION 1002. Corporate Existence and Maintenance of Office or Agency.
Except as expressly permitted by this Indenture, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect the corporate existence of the Company.
If Securities of a series are issuable only as Registered Securities, the
Company will maintain in each Place of Payment for such series an office or
agency where Securities of that series may be presented or surrendered for
payment, or, if applicable, for conversion, where Securities of that series may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. If Securities of a series are issuable as Bearer
Securities, the Company will maintain (A) in the Borough of Manhattan, The City
of New York, an office or agency where any Registered Securities of that series
may be presented or surrendered for payment, or, if applicable, for conversion,
where any Registered Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange, where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related coupons may be presented or surrendered
for payment in the circumstances described in the following paragraph (and not
otherwise), (B) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series which is located outside the United States, an
office or agency where Securities of that series and related coupons may be
presented and surrendered for payment (including payment of any additional
amounts payable on Securities of that series pursuant to Section 1004) or, if
applicable, for conversion; provided, however, that if the Securities of that
series are listed on The International Stock Exchange of the United Kingdom and
the Republic of Ireland Limited, the Luxembourg Stock Exchange or any other
stock exchange located outside the United States and such stock exchange shall
so require, the Company will maintain a Paying Agent for the Securities of that
series in London, Luxembourg or any other required city located outside the
United States, as the case may be, so long as the Securities of that series are
listed on such exchange, and (C) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series which is located outside the
United States an office or agency where any Registered Securities of that series
may be surrendered for registration of transfer, where Securities of that series
may be surrendered for exchange and where notices and demands to or upon the
Company in respect of the Securities of that series, and this Indenture may be
served. The Company will give prompt written notice to the Trustee and prompt
notices to the Holders as provided in Section 106 of the location, and any
change in the location, of any such office or agency. If at any time the
Company shall fail to maintain any such required office or agency in respect of
any series of Securities or shall fail to furnish the Trustee with the address
thereof, such presentations and surrenders of Securities of that series may be
made and notices and demands may be made or served at the Corporate Trust Office
of the Trustee, except that Bearer Securities of that series and the related
coupons may be presented and surrendered for payment (including payment of any
additional amounts payable on Bearer Securities of that series pursuant to
Section 1004) or, if applicable, for conversion, at any Paying Agent for such
series located outside the United States, and the Company hereby appoints the
same as its agents to receive such respective presentations, surrenders, notices
and demands.
No payment of principal, premium or interest on Bearer Securities shall be
made at any office or agency of the Company in the United States or by check
mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, that, if
the Securities of a series are denominated and payable in Dollars, payment of
principal of and any premium and interest on any Bearer Security (including any
additional amounts payable on Securities of such series pursuant to Section
1004) shall be made at the office of the Company's Paying Agent in the Borough
of Manhattan, The City of New York, if (but only if) payment in Dollars of the
full amount of such principal, premium, interest or additional amounts, as the
case may be, at all offices or agencies outside the United States maintained for
the purpose by
45
<PAGE>
the Company in accordance with this Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other offices
or agencies where Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain an office or
agency in accordance with the requirements set forth above for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee and the Holders of any such designation or rescission and of any other
change in the location of any such other office or agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities and any coupons appertaining thereto, it will, on or
before each due date of the principal of and any premium or interest on any of
the Securities of that series, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the principal and any
premium or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure to so act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, on or prior to each due date of the principal of and any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay the principal and any premium or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure to so act.
The Company will cause each Paying Agent for any series of Securities
(other than the Company or the Trustee) to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will (i) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and
(ii) during the continuance of any default by the Company (or any other obligor
upon the Securities of that series) in the making of any payment in respect of
the Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of and any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal and any premium or interest has become due and payable
shall be paid to the Company on Company Request (unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
law), or (if then held by the Company) shall be discharged from such trust; and
the Holder of such Security or any coupon appertaining thereto shall (unless
otherwise required by mandatory provisions of applicable escheat or abandoned or
unclaimed property law) thereafter, as an unsecured general creditor, look only
to the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any
46
<PAGE>
such repayment, may at the expense of the Company cause to be published once, in
an Authorized Newspaper in each Place of Payment, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
SECTION 1004. Additional Amounts.
If the Securities of a series provide for the payment of additional
amounts, the Company will pay to the Holder of any Security of such series or
any coupon appertaining thereto additional amounts as provided therein.
Whenever in this Indenture there is mentioned, in any context, the payment of
the principal of or any premium or interest on, or in respect of, any Security
of any series or payment of any related coupon or the net proceeds received on
the sale or exchange of any Security of any series, such mention shall be deemed
to include mention of the payment of additional amounts provided for in this
Section to the extent that, in such context, additional amounts are, were or
would be payable in respect thereof pursuant to the provisions of this Section
and express mention of the payment of additional amounts (if applicable) in any
provisions hereof shall not be construed as excluding additional amounts in
those provisions hereof where such express mention is not made.
If the Securities of a series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officers' Certificate, the
Company will furnish the Trustee and the Company's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series or any related
coupons who are United States Aliens without withholding for or on account of
any tax, assessment or other governmental charge described in the Securities of
that series. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be withheld
on such payments to such Holders of Securities or coupons and the Company will
pay to the Trustee or such Paying Agent the additional amounts required by this
Section. The Company covenants to indemnify the Trustee and any Paying Agent
for, and to hold them harmless against, any loss, liability or expense
reasonably incurred without negligence or bad faith on their part arising out of
or in connection with actions taken or omitted by any of them in reliance on any
Officers' Certificate furnished pursuant to this Section.
SECTION 1005. Purchase of Securities by Company or Subsidiary.
If and so long as the Securities of a series are listed on The
International Stock Exchange of the United Kingdom and the Republic of Ireland
Limited and such stock exchange shall so require, the Company will not, and will
not permit any of its Subsidiaries to, purchase any Securities of that series by
private treaty at a price (exclusive of expenses and accrued interest) which
exceeds 120% of the mean of the nominal quotations of the Securities of that
series as shown in The Stock Exchange Daily Official List for the last trading
day preceding the date of purchase.
SECTION 1006. Appointment to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the office of
the Trustee, will appoint, in the manner provided in Section 610, a Trustee, so
that there shall at all times be a Trustee hereunder.
47
<PAGE>
SECTION 1007. Statement by Officer as to Default.
(a) The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture. For purposes
of this Section 1007, such compliance shall be determined without regard to any
period of grace or requirement of notice under this Indenture. Such certificate
shall comply with Section 314(a)(4) of the Trust Indenture Act.
(b) The Company shall, so long as any of the Securities are outstanding,
deliver to the Trustee forthwith upon any Officer becoming aware of any Event of
Default or event which, after notice or lapse of time or both, would become an
Event of Default, an Officers' Certificate specifying such Event of Default or
event and what action the Company proposes to take with respect thereto.
SECTION 1008. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Section 1005, or Article Fifteen with
respect to the Securities of any series if before the time for such compliance
the Holders of 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 term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution. In the case of any redemption at the election of the
Company of less than all the Securities of any series, the Company shall, at
least 45 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date, of the principal amount of Securities of such series to be
redeemed and, if applicable, of the tenor of the Securities of such series to be
redeemed. In the case of any redemption of Securities (i) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, or (ii) pursuant to an election of
the Company which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction or condition.
48
<PAGE>
SECTION 1103. Selection of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed (unless
all of the Securities of such series of a specified tenor are to be redeemed)
the particular Securities to be redeemed shall be selected not more than 45 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Registered Securities of such series of a denomination larger than the
minimum authorized denomination for Securities of that series or of the
principal amount of global Securities of such series. If less than all of the
Securities of such series and of a specified tenor are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 45 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 the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, 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 Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
If any Security selected for partial redemption is surrendered for conversion
after such selection, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Upon any redemption of
less than all the Securities of a series, for purposes of selection for
redemption the Company and the Trustee may treat as Outstanding Securities
surrendered for conversion during the period of 15 days next preceding the
mailing of a notice of redemption, and need not treat as Outstanding any
Security authenticated and delivered during such period in exchange for the
unconverted portion of any Security converted in part during such period.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section 106
to the Holders of Securities to be redeemed not less than 30 nor more than 60
days prior to the Redemption Date.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities to be
redeemed, and that on and after the Redemption Date, upon surrender of the
Securities, new Securities of such series in principal amount equal to the
unredeemed part thereof will be issued,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities, together in the case of
Bearer Securities with all coupons appertaining thereto, if any, maturing
after the Redemption Date, are to be surrendered for payment of the
Redemption Price, and
49
<PAGE>
(6) that the redemption is for a sinking fund, if such is the case,
and
(7) if applicable, the Conversion Price then in effect and the date on
which the right to convert the Securities or portions thereof to be
redeemed will expire.
A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date. If any Security called for redemption is
converted pursuant hereto, any money deposited with the Trustee or any Paying
Agent or so segregated and held in trust for the redemption of such Security
shall be paid to the Company upon delivery of a Company Request to the Trustee
or such Paying Agent, or, if then held by the Company, shall be discharged from
such trust.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest and the coupons for such
interest appertaining to any Bearer Securities so to be redeemed, except to the
extent provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest to
the Redemption Date; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 1002) and, unless otherwise specified as
contemplated by Section 301, only upon presentation and surrender of coupons for
such interest, and provided, further, that, unless otherwise specified as
contemplated by Section 301, installments of interest on Registered Securities
whose Stated Maturity is on or prior to the Redemption Date shall 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 307.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall
surrender to the Trustee or any Paying Agent any such missing coupon in respect
of which a deduction shall have been made from the Redemption Price, such Holder
shall be entitled to receive the amount so deducted; provided, however, that
interest represented by coupons shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 1002)
and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of those coupons.
50
<PAGE>
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security or, in the case of Original Issue Discount Securities, the Securities'
yield to maturity.
SECTION 1107. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at a Place of Payment thereof (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Registered Security or Securities of the same
series and of like tenor, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption
of Securities of any series as provided for by the terms of Securities of such
series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption), together in the case of any Bearer
Securities of such series with all unmatured coupons appertaining thereto, and
(2) may apply as a credit Securities of a series which have been (x) converted
into Common Stock or (y) redeemed either at the election of the Company pursuant
to the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Securities of such series required to be made pursuant to the terms of such
Securities as provided for by the terms of such series; provided that such
Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee a Company Order
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that
51
<PAGE>
series pursuant to Section 1202 and will also deliver to the Trustee any
Securities to be so credited. Not less than 45 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may at its option by Board Resolution, at any time, elect to
have either Section 1302 or Section 1303 applied to the Outstanding Securities
of any series upon compliance with the conditions set forth below in this
Article Thirteen.
SECTION 1302. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section 1301
applicable to this Section, the Company shall be deemed to have been discharged
from its obligations with respect to the Outstanding Securities of any series
(other than any convertible series) on the date the conditions set forth below
are satisfied (hereinafter, "defeasance"). For this purpose, such defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Outstanding Securities of such series and to
have satisfied all its other obligations under the Securities of such series and
this Indenture insofar as the Securities of such series are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (A) the rights of Holders of the
Securities of such series to receive, solely from the trust fund described in
Section 1304 and as more fully set forth in such Section, payments in respect of
the principal of and any premium and interest on the Securities of such series
when such payments are due, (B) the Company's obligations with respect to such
Securities under Sections 304, 305, 306, 1002, 1003 and 1004, (C) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and (D) this
Article Thirteen. Subject to compliance with this Article Thirteen, the Company
may exercise its option under this Section 1302 notwithstanding the prior
exercise of its option under Section 1303.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section 1301
applicable to this Section, (i) the Company shall be released from its
obligations with respect to the Securities of such series under Sections 801,
and 1005 and (ii) the occurrence of an event specified in Sections 501(3) or (5)
shall not be deemed to be an Event of Default on and after the date the
conditions set forth below are satisfied (hereinafter, "covenant defeasance"),
but the remainder of this Indenture and such Securities shall be unaffected
thereby. For this purpose, such covenant defeasance means that the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section or clause whether directly
or indirectly by reason of any reference elsewhere herein to any such Section or
clause or by reason of any reference in any such Section or clause to any other
provision herein or in any such Section or clause to any other provision herein
or in any other document, but the remainder of this Indenture and such
Securities shall be unaffected thereby.
52
<PAGE>
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section 1302
or Section 1303 to the then Outstanding Securities of any series:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 609 who shall agree to comply with the provisions of this
Article Thirteen applicable to it) as trust funds in trust for the purpose
of making the following payments specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Securities of such
series, (A) money in an amount, or (B) U.S. Government Obligations which
through the scheduled payment of principal and interest in respect thereof
in accordance with their terms will provide, not later than one day before
the due date of any payment, money in an amount, or (C) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied
by the Trustee (or other qualifying trustee) to pay and discharge, the
principal of (and premium, if any) and each installment of interest on the
Securities and any coupons pertaining thereto on the Stated Maturity of
such principal (and premium, if any) or installment of interest in
accordance with the terms of this Indenture and of the Securities of such
series. For this purpose, "U.S. Government Obligations" means securities
that are (x) direct obligations of the United States for the payment of
which its full faith and credit is pledged or (y) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of
the United States the payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United States, which, in either
case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian
with respect to any such U.S. Government Obligation or a specific payment
of principal of or interest on any such U.S. Government Obligation held by
such custodian for the account of the holder of such depository receipt,
provided that (except as required by law) such custodian is not authorized
to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such depository
receipt.
(2) In the case of an election under Section 1302, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the date of this Indenture there has
been a change in the applicable United States Federal income tax law, in
either case to the effect that, and based thereon such opinion shall
confirm that, the Holders of the Outstanding Securities of such series will
not recognize income, gain or loss for United States Federal income tax
purposes as a result of such deposit, defeasance and discharge and will be
subject to United States Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
deposit, defeasance and discharge had not occurred.
(3) In the case of an election under Section 1303, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Outstanding Securities of such series will not recognize
gain or loss for United States Federal income tax purposes as a result of
such deposit and covenant defeasance and will be subject to United States
Federal income tax on the same amount, in the same manner and at the same
times as would have been the case if such deposit and covenant defeasance
had not occurred.
(4) No Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to the Securities of
such series shall have occurred and be continuing on the date of such
deposit or, insofar as subsections 501(6) and (7) are concerned, at any
time during
53
<PAGE>
the period ending on the 121st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period).
(5) Such defeasance or covenant defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture
Act with respect to any securities of the Company.
(6) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
(7) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 1302
or the covenant defeasance under Section 1303 (as the case may be) have
been complied with.
(8) Such defeasance or covenant defeasance shall not result in the
trust arising from such deposit constituting an investment company as
defined in the Investment Company Act of 1940, as amended, or such trust
shall be qualified under such Act or exempt from regulation thereunder.
SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee -- collectively, for purposes of this
Section 1305, the "Trustee") pursuant to Section 1304 in respect of the
Securities of such series shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities of such series and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of the Securities of such series, of all sums due and
to become due thereon in respect of principal (and premium, if any) and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Outstanding Securities.
Anything in this Article Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance.
SECTION 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 1302 or 1303 by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Securities of such series shall be revived and reinstated as though no deposit
had occurred pursuant to this Article Thirteen until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
1302 or 1303; provided, however, that if the Company makes any payment of
principal of or any premium or interest on any Security following the
reinstatement of its obligations, the Company shall be subrogated to the
54
<PAGE>
rights of the Holders of the Securities of such series to receive such payment
from the money held by the Trustee or the Paying Agent.
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF BEARER SECURITIES
SECTION 1401. Purposes for Which Meetings May Be Called.
If Securities of a series are issuable as Bearer Securities, a meeting of
Holders of Securities of such series may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 1402. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of Bearer
Securities of any series for any purpose specified in Section 1401, to be held
at such time and at such place in the Borough of Manhattan, The City of New
York, or in London or such other location as the Trustee shall determine.
Notice of every meeting of Holders of Bearer Securities of any series, setting
forth the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be given, in the manner provided in
Section 106, not less than 21 nor more than 120 days prior to the date fixed for
the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or the
Holders of at least 10% in aggregate principal amount of the Outstanding Bearer
Securities of any series shall have requested the Trustee to call a meeting of
the Holders of Securities of such series for any purpose specified in Section
1401, by written request setting forth in reasonable detail the action proposed
to be taken at the meeting, and the Trustee shall not have made the first
publication of the notice of such meeting within 21 days after receipt of such
request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Securities of such series in
the amount above specified, as the case may be, may determine the time and the
place in the Borough of Manhattan, The City of New York, or in London or such
other location as the Trustee shall determine for such meeting and may call such
meeting for such purposes by giving notice thereof as provided in subsection (a)
of this Section.
SECTION 1403. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Bearer Securities a
Person shall (a) be a Holder of one or more Bearer Securities or (b) be a Person
appointed by an instrument in writing as proxy by a Holder of one or more Bearer
Securities. The only Persons who shall be entitled to be present or to speak at
any meeting of Holders of Bearer Securities shall be the Persons entitled to
vote at such meeting and their counsel and any representatives of the Trustee
and its counsel and any representatives of the Company and its counsel.
SECTION 1404. Quorum; Action.
The Persons entitled to vote a majority in aggregate principal amount of
the Outstanding Bearer Securities of a series shall constitute a quorum for a
meeting of Holders of Securities of such series. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities of such series, be
dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the
55
<PAGE>
meeting prior to the adjournment of such adjourned meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided in Section
1402(a), except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly the percentage, as
provided above, of the aggregate principal amount of the Outstanding Securities
of such series which shall constitute a quorum.
Except as limited by Section 512 or the proviso to the first paragraph of
Section 902, any resolution presented to a meeting (or adjourned meeting duly
reconvened at which a quorum is present as aforesaid) may be adopted by the
affirmative vote of the Holders of a majority in principal amount of the
Outstanding Bearer Securities of that series; provided, however, that any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which this Indenture expressly provides
may be made, given or taken by the Holders of a specified percentage, which is
less than a majority, in aggregate principal amount of the Outstanding Bearer
Securities of a series may be adopted at a meeting (or an adjourned meeting duly
reconvened and at which a quorum is present as aforesaid) by the affirmative
vote of the Holders of such specified percentage in principal amount of the
Outstanding Bearer Securities of that series.
To the extent consistent with the terms of this Indenture, any resolution
passed or decision taken at any meeting of Holders of Bearer Securities of any
series duly held in accordance with this Section shall be binding on all the
Holders of Securities of such series and the related coupons, whether or not
present or represented at the meeting.
SECTION 1405. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Bearer Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Bearer Securities shall be proved in the manner specified in Section 104 and
the appointment of any proxy shall be proved in the manner specified in Section
104 or by having the signature of the Person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 104 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Bearer Securities as provided in Section 1402(b), in
which case the Company or the Holders of Bearer Securities of the series calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting shall
be elected by vote of the Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities of such series represented at the
meeting.
(c) At any meeting each Holder of a Security of such series or proxy shall
be entitled to one vote for each $1,000 principal amount of the Outstanding
Securities of such series held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any Bearer Security
challenged as not Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote, except as
a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Bearer Securities of any series duly called
pursuant to Section 1402 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
56
<PAGE>
SECTION 1406. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of Bearer
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Bearer Securities of
any series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1402 and, if
applicable, Section 1404. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE FIFTEEN
CONVERSION OF SECURITIES
SECTION 1501. Applicability of Article.
The provisions of this Article shall be applicable to the Securities of any
series which are convertible into Common Stock or, if so provided in a Board
Resolution, Officers' Certificate or executed supplemental indenture referred to
in Sections 201 and 301 by or pursuant to which the form and terms of the
Securities of such series were established, cash in lieu thereof, as and to the
extent provided by the terms of the Securities of such series.
SECTION 1502. Exercise of Conversion Privilege .
In order to exercise the conversion privilege, the Holder of any Security
to be converted shall surrender such Security to the Conversion Agent at any
time during usual business hours, until and including, but not after the close
of business on the second Business Day prior to the Stated Maturity of the
principal of such Security, at its office or agency maintained for the purpose
as provided in this Indenture, accompanied by a fully executed written notice,
in substantially the form set forth on the reverse of the Security, that the
Holder elects to convert such Security or a stated portion thereof constituting
a multiple of $1,000 in principal amount, and, if such Security is surrendered
for conversion during the period between the close of business on any record
date for such Security and the opening of business on the related Interest
Payment Date and has not been called for redemption on a Redemption Date within
such period, accompanied also by payment of an amount equal to the interest
payable on such Interest Payment Date on the portion of the principal amount of
the Security being surrendered for conversion. The Holder of any Security at
the close of business on any record date for such Security shall be entitled to
receive the interest payable on such Security on the corresponding Interest
Payment Date notwithstanding the conversion thereof after such record date.
Such notice of conversion shall also state the name or names (and address) in
which the certificate or certificates for shares of Common Stock shall be issued
(or to whom payment in cash in lieu of Common Stock shall be made). Securities
surrendered for conversion shall (if so required by the Company or the
Conversion Agent) be duly endorsed by, or be accompanied by a written instrument
or instruments of transfer in form satisfactory to the Company and the
Conversion Agent duly executed by, the Holder or his attorney duly authorized in
writing. As promptly as practicable after the receipt of such notice and the
surrender of such Security as aforesaid, the Company shall,
57
<PAGE>
subject to the provisions of Section 1507, issue and deliver at such office or
agency to such Holder, or on his written order, a certificate or certificates
for the number of full shares of Common Stock issuable on conversion of such
Security in accordance with the provisions of such Security and cash, as
provided in Section 1503, in respect of any fraction of a share of Common Stock
otherwise issuable upon such conversion or, if so provided in a Board
Resolution, Officers' Certificate or executed supplemental indenture referred to
in Sections 201 and 301 by or pursuant to which the form and terms of the
Securities of such series were established, cash in lieu of shares of Common
Stock. Such conversion shall be at the Conversion Price in effect, and shall be
deemed to have been effected, immediately prior to the close of business on the
date (herein called the "Date of Conversion") on which such notice in proper
form shall have been received by the Conversion Agent and such Security shall
have been surrendered as aforesaid, and the Person or Persons in whose name or
names any certificate or certificates for shares of Common Stock shall be
issuable, if any, upon such conversion shall be deemed to have become on the
Date of Conversion the holder or holders of record of the shares represented
thereby; provided, however, that any such surrender on any date when the stock
transfer books of the Company shall be closed shall constitute the Person or
Persons in whose name or names the certificate or certificates for such shares
are to be issued, if any, as the record holder or holders thereof for all
purposes at the opening of business on the next succeeding day on which such
stock transfer books are open but such conversion shall nevertheless be at the
Conversion Price in effect at the close of business on the date when such
Security shall have been so surrendered with the conversion notice in proper
form. In the case of conversion of a portion, but less than all, of a Security,
the Company shall execute, and the Trustee shall authenticate and deliver to the
Holder thereof, at the expense of the Company, a Security or Securities in the
aggregate principal amount of the unconverted portion of the Security
surrendered. Except as otherwise expressly provided in this Indenture, no
payment or adjustment shall be made for interest accrued on any Security (or
portion thereof) converted or for dividends or distributions on any Common Stock
issued upon conversion of any Security. The right, if any, of a Holder of any
Security to cause the Company to redeem, purchase or repay such Security shall
terminate upon receipt by the Company of any notice of conversion of such
Security.
SECTION 1503. Fractional Interests.
No fractions of shares or scrip representing fractions of shares shall be
issued upon conversion of Securities. If more than one Security shall be
surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Securities so surrendered. If
any fraction of a share of Common Stock would, except for the provisions of this
Section 1503, be issuable on the conversion of any Security or Securities, the
Company shall make payment in lieu thereof in cash equal to the value of such
fraction computed on the basis of the Last Sale Price of one share of Common
Stock on the most recent Trading Day prior to the Date of Conversion. "Last
Sale Price" on any Trading Day shall mean (i) the closing price regular way (or,
if no closing price is reported the average of the bid and asked prices) as
reported on the New York Stock Exchange Composite Tape, or (ii) if on such
Trading Day the Common Stock is not listed or admitted to trading on such
exchange, the closing price regular way (or, if no closing price is reported the
average of the bid and asked prices) on the principal national securities
exchange on which the Common Stock is listed or admitted to trading, or (iii) if
not listed or admitted to trading on any national securities exchange on such
Trading Day, then the average of the closing bid and asked prices as reported
through the National Association of Securities Dealers, Inc. on its NASDAQ
National Market or other NASDAQ market or through a similar organization if
NASDAQ is no longer reporting information, or (iv) if the Common Stock is not
listed or admitted to trading on any national securities exchange or quoted on
such National Market or other NASDAQ market on such Trading Day, then the
average of the closing bid and asked prices in the over-the-counter market as
furnished by any New York Stock Exchange member firm selected from time to time
by the Company for that purpose or (v) if not quoted by any such organization on
such Trading Day, the fair value of such Common Stock on such Trading Day, as
determined by the Board of Directors. The term "Trading Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on which
securities are not traded on any of the above mentioned exchanges or in such
markets.
58
<PAGE>
SECTION 1504. Adjustment of Conversion Price.
The conversion price or rate (herein called the "Conversion Price") for a
series of Securities shall be as set forth in a Board Resolution, Officers'
Certificate or executed supplemental indenture referred to in Sections 201 and
301 by or pursuant to which the form and terms of the Securities of such series
were established, and, except as otherwise provided therein, shall be subject to
adjustment from time to time as follows:
(a) In case the Company shall (1) make or pay a dividend (or other
distribution) in shares of Common Stock on any class of Capital Stock of the
Company, (2) subdivide its outstanding shares of Common Stock into a greater
number of shares or (3) combine or reclassify its outstanding shares of Common
Stock into a smaller number of shares, the Conversion Price in effect
immediately prior to such action shall be adjusted so that the Holder of any
Security thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock which he would have owned immediately following
such action had such Security been converted immediately prior thereto. An
adjustment made pursuant to this subsection (a) shall become effective
immediately, except as provided in subsection (h) below, after the record date
in the case of a dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision or combination.
(b) In case the Company shall issue rights, options or warrants to all
holders of Common Stock entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the then current market price per
share (as determined pursuant to subsection (f) below) of the Common Stock on
the record date mentioned below, the Conversion Price shall be adjusted to a
price, computed to the nearest cent, so that the same shall equal the price
determined by multiplying:
(1) the Conversion Price in effect immediately prior to the date of
issuance of such rights, options or warrants by a fraction, of which
(2) the numerator shall be (A) the number of shares of Common Stock
outstanding on the date of issuance of such rights, options or warrants,
immediately prior to such issuance, plus (B) the number of shares which the
aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such current market price
(determined by multiplying such total number of shares by the exercise
price of such rights, options or warrants and dividing the product so
obtained by such current market price), and of which
(3) the denominator shall be (A) the number of shares of Common Stock
outstanding on the date of issuance of such rights, options or warrants,
immediately prior to such issuance, plus (B) the number of additional
shares of Common Stock which are so offered for subscription or purchase.
Such adjustment shall become effective immediately, except as provided in
subsection (h) below, after the record date for the determination of holders
entitled to receive such rights, options or warrants; provided, however, that if
any such rights, options or warrants issued by the Company as described in this
subsection (b) are only exercisable upon the occurrence of certain triggering
events relating to control and provided for in shareholder rights plans, then
the Conversion Price will not be adjusted as provided in this subsection (b)
until such triggering events occur.
59
<PAGE>
(c) In case the Company or any Subsidiary of the Company shall distribute
to all holders of Common Stock evidences of indebtedness, shares of Capital
Stock other than Common Stock, cash or other assets (including securities, but
other than (x) regular dividends or distributions paid exclusively in cash or
(y) any dividend or distribution for which an adjustment is required to be made
in accordance with subsection (a) or (b) above), then in each such case the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the date of such distribution by a fraction of which the numerator shall be the
then current market price per share (determined as provided in subsection (f)
below) of the Common Stock on the record date mentioned below less the then fair
market value (as reasonably determined in good faith by the Board of Directors )
of the portion of the assets so distributed applicable to one share of Common
Stock, and of which the denominator shall be such current market price per share
of the Common Stock. Such adjustment shall become effective immediately, except
as provided in subsection (h) below, after the record date for the determination
of stockholders entitled to receive such distribution. Notwithstanding the
foregoing, in the event that the fair market value of the assets, evidences of
indebtedness or other securities so distributed applicable to one share of
Common Stock equals or exceeds such current market price per share of Common
Stock, or such current market price exceeds such fair market value by less than
$0.10 per share, the Conversion Price shall not be adjusted pursuant to this
subsection (c) and, to the extent applicable, the provisions of subsection (k)
shall apply to such distribution.
(d) In case the Company or any Subsidiary of the Company shall make any
distribution consisting exclusively of cash (excluding any cash portion of
distributions for which an adjustment is required to be made in accordance with
(c) above, or cash distributed upon a merger or consolidation to which Section
1505 applies) to all holders of Common Stock in an aggregate amount that,
combined together with (i) all other such all-cash distributions made within the
then preceding 12 months in respect of which no adjustment has been made and
(ii) any cash and the fair market value of other consideration paid or payable
in respect of any tender offer by the Company or any of its Subsidiaries for
Common Stock concluded within the preceding 12 months in respect of which no
adjustment has been made, exceeds 15% of the Company's market capitalization
(defined as being the product of the then current market price of the Common
Stock (determined as provided in subsection (f) below) times the number of
shares of Common Stock then outstanding) on the record date of such
distribution, then in each such case the Conversion Price shall be adjusted so
that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the date of such distribution by a fraction
of which the numerator shall be the then current market price per share of the
Common Stock on such record date less the amount of the cash so distributed
applicable to one share of Common Stock, and of which the denominator shall be
such current market price per share of the Common Stock. Such adjustment shall
become effective immediately, except as provided in subsection (h) below, after
the record date for the determination of stockholders entitled to receive such
distribution. Notwithstanding the foregoing, in the event that the cash so
distributed applicable to one share of Common Stock equals or exceeds such
current market price per share of Common Stock, or such current market price
exceeds such amount of cash by less than $0.10 per share, the Conversion Price
shall not be adjusted pursuant to this subsection (d), and, to the extent
applicable, the provisions of subsection (k) shall apply to such distribution.
(e) In case there shall be completed a tender or exchange offer made by the
Company or any Subsidiary of the Company for all or any portion of the Common
Stock (any such tender or exchange offer being referred to as an "Offer") that
involves an aggregate consideration having a fair market value as of the
expiration of such Offer (the "Expiration Time") that, together with (i) any
cash and the fair market value of any other consideration payable in respect of
any other Offer, as of the expiration of such other Offer, expiring within the
12 months preceding the expiration of such Offer and in respect for which no
Conversion Price adjustment pursuant to this subsection (e) has been made and
(ii) the aggregate amount of any all-cash distributions referred to in
subsection (d) of this Section 1504 to all holders of Common Stock within the 12
months preceding the expiration of such Offer for which no Conversion Price
adjustment pursuant to such subsection (d) has been made, exceeds 15% of the
product of the then current market price per share (determined as provided in
subsection (f) below) of the Common Stock on the Expiration Time times the
number of shares of Common Stock outstanding (including any tendered shares) on
the Expiration Time, the Conversion
60
<PAGE>
Price shall be reduced by multiplying such Conversion Price in effect
immediately prior to the Expiration Time by a fraction of which the numerator
shall be (i) the product of the then current market price per share (determined
as provided in subsection (f) below) of the Common Stock on the Expiration Time
times the number of shares of Common Stock outstanding (including any tendered
shares) on the Expiration Time minus (ii) the fair market value of the aggregate
consideration payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the Offer) of all shares validly tendered and not
withdrawn as of the Expiration Time (the shares deemed so accepted being
referred to as the "Purchased Shares") and the denominator shall be the product
of (i) such current market price per share on the Expiration Time times (ii)
such number of outstanding shares on the Expiration Time less the number of
Purchased Shares, such reduction to become effective immediately prior to the
opening of business on the day following the Expiration Time. For purposes of
this subsection (e), the fair market value of any consideration with respect to
an Offer shall be reasonably determined in good faith by the Board of Directors
of the Company and described in a Board Resolution.
(f) For the purpose of any computation under subsections (b), (c), (d) and
(e) above, the current market price per share of Common Stock on any date shall
be deemed to be the average of the Last Sale Prices of a share of Common Stock
for the five consecutive Trading Days selected by the Company commencing not
more than 20 Trading Days before, and ending not later than, the earlier of the
date in question and the date before the "ex date," with respect to the
issuance, distribution or Offer requiring such computation. For purposes of
this paragraph, the term "ex date," when used with respect to any issuance,
distribution or payments with respect to an Offer, means the first date on which
the Common Stock trades regular way on the New York Stock Exchange (or if not
listed or admitted to trading thereon, then on the principal national securities
exchange on which the Common Stock is listed or admitted to trading) without the
right to receive such issuance, distribution or Offer.
(g) In addition the foregoing adjustments in subsections (a), (b), (c), (d)
and (e) above, the Company will be permitted to make such reductions in the
Conversion Price as it considers to be advisable in order that any event treated
for Federal income tax purposes as a dividend of stock or stock rights will not
be taxable to the holders of the shares of Common Stock.
In the event the Company elects to make such a reduction in the Conversion
Price, the Company will comply with the requirements of Rule 14e-1 of the
Securities Exchange Act of 1934, as amended and any other Federal and state laws
and regulations thereunder if and to the extent that such laws and regulations
are applicable in connection with the reduction of the Conversion Price of the
Notes; provided, however, that any provisions of this Indenture which conflict
with such laws shall be deemed to be superseded by the provisions of such laws.
(h) In any case in which this Section 1504 shall require that an adjustment
(including by reason of the last sentence of subsection (a) or (c) above) be
made immediately following a record date, the Company may elect to defer the
effectiveness of such adjustment (but in no event until a date later than the
effective time of the event giving rise to such adjustment), in which case the
Company shall, with respect to any Security converted after such record date and
on and before such adjustment shall have become effective (i) defer paying any
cash payment pursuant to Section 1503 or issuing to the Holder of such Security
the number of shares of Common Stock and other Capital Stock of the Company (or
other assets or securities) issuable upon such conversion in excess of the
number of shares of Common Stock and other Capital Stock of the Company issuable
thereupon only on the basis of the Conversion Price prior to adjustment, and
(ii) not later than five Business Days after such adjustment shall have become
effective, pay to such Holder the appropriate cash payment pursuant to Section
1503 and issue to such Holder the additional shares of Common Stock and other
Capital Stock of the Company (or other assets or securities) issuable on such
conversion.
(i) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% of the
Conversion Price; provided, however, that any adjustments which
61
<PAGE>
by reason of this subsection (i) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article Fifteen shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
(j) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly (i) file with the Trustee and each Conversion Agent an
Officers' Certificate setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment,
which certificate shall be conclusive evidence of the correctness of such
adjustment, and (ii) give or cause to be given a notice of such adjustment to
each Holder of Securities in the manner provided in Section 106.
(k) In the event that the Company distributes rights (including rights to
distributions referred to by paragraphs (c) and (d) of this Section 1504 to the
extent this paragraph (k) applies thereto) or warrants (other than those
referred to in subsection (b) above) pro rata to holders of Common Stock, so
long as any such rights or warrants have not expired or been redeemed by the
Company, the Company shall make proper provision so that the Holder of any
Security surrendered for conversion will be entitled to receive upon such
conversion, in addition to the shares of Common Stock issuable upon such
conversion (the "Conversion Shares"), a number of rights or warrants to be
determined as follows: (i) if such conversion occurs on or prior to the date
for the distribution to the holders of rights or warrants of separate
certificates evidencing such rights or warrants (the "Distribution Date"), the
same number of rights or warrants to which a holder of a number of shares of
Common Stock equal to the number of Conversion Shares is entitled at the time of
such conversion in accordance with the terms and provisions of and applicable to
the rights or warrants, and (ii) if such conversion occurs after such
Distribution Date, the same number of rights or warrants to which a holder of
the number of shares of Common Stock into which the principal amount of such
Security so converted was convertible immediately prior to such Distribution
Date would have been entitled on such Distribution Date in accordance with the
terms and provisions of and applicable to the rights or warrants.
SECTION 1505. Continuation of Conversion Privilege in Case of Merger,
Consolidation or Sale of Assets.
If any of the following shall occur, namely: (a) any reclassification or
change of outstanding shares of Common Stock issuable upon conversion of any
Securities (other than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of a subdivision or
combination), (b) any consolidation or merger of the Company with or into any
other Person, or the merger of any other Person with or into the Company (other
than a merger which does not result in any reclassification, change, conversion,
exchange or cancellation of outstanding shares of Common Stock) or (c) any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety, then the Company, or such successor or purchasing
entity, as the case may be, shall, as a condition precedent to such
reclassification, change, consolidation, merger, conveyance, transfer or lease,
execute and deliver to the Trustee a supplemental indenture providing that the
Holder of each Security then outstanding shall have the right to convert such
Security only into the kind and amount of shares of stock and other securities
and property (including cash) receivable upon such reclassification, change,
consolidation, merger, conveyance, transfer or lease by a holder of the number
of shares of Common Stock issuable upon conversion of such Security immediately
prior to such reclassification, change, consolidation, merger, conveyance,
transfer or lease assuming such holder of Common Stock of the Company failed to
exercise his rights of an election, if any, as to the kind or amount of
securities, cash and other property receivable upon such reclassification,
change, consolidation, merger, conveyance, transfer or lease (provided that if
the kind or amount of securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, conveyance, transfer or lease
is not the same for each share of Common Stock of the Company held immediately
prior to such reclassification, change, consolidation, merger, conveyance,
transfer or lease in respect of which such rights of election shall not have
been exercised ("non-electing share"), then for the purpose of this Section 1505
the kind and amount of securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, conveyance, transfer or lease
by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of
62
<PAGE>
the non-electing shares). Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article Fifteen. If, in the case of any such
consolidation, merger, conveyance, transfer or lease, the stock or other
securities and property (including cash) receivable thereupon or in connection
therewith by a holder of shares of Common Stock includes shares of stock or
other securities and property (including cash) of a Person other than the
successor or purchasing Person, as the case may be, in such consolidation,
merger, conveyance, transfer or lease, then such supplemental indenture shall
also be executed by such other Person and shall contain such additional
provisions to protect the interests of the Holders of the Securities as the
Board of Directors shall reasonably consider necessary by reason of the
foregoing. The provisions of this Section 1505 shall similarly apply to
successive consolidations, mergers, conveyances, transfer or leases.
Notice of the execution of each such supplemental indenture shall be given
to each Holder of Securities in the manner provided in Section 106.
Neither the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or other securities or property (including cash) receivable by Holders of
Securities upon the conversion of their Securities after any such
reclassification, consolidation, merger, conveyance, transfer or lease or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Sections 601 and 603, may accept as conclusive evidence of the correctness of
any such provision, and shall be protected in relying upon, the Officers'
Certificate (which the Company shall be obligated to file with the Trustee prior
the execution of any such supplemental indenture) with respect thereto.
SECTION 1506. Notice of Certain Events.
If:
(a) the Company shall declare a dividend (or any other distribution)
payable to the holders of Common Stock otherwise than in cash; or
(b) the Company shall authorize the granting to all holders of Common
Stock of rights, warrants or options to subscribe for or purchase any
shares of stock of any class or of any other rights; or
(c) the Company shall authorize any reclassification or change of the
Common Stock (other than a subdivision or combination of its outstanding
shares of Common Stock), or any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the
Company is required, or the conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety;
(d) there shall be authorized or ordered any voluntary or involuntary
dissolution, liquidation or winding-up of the Company; or
(e) the Company or any of its Subsidiaries shall complete an Offer;
then, the Company shall cause to be filed at the office or agency maintained for
the purpose of conversion of the Securities as provided in Section 1002, and
shall cause to be given to each Holder of Securities, in the manner provided in
Section 106, at least 20 days before the date hereinafter specified (or the
earlier of the dates hereinafter specified, in the event that more than one date
is specified), a notice stating the date on which (1) a record is expected to be
taken for the purpose of such dividend, distribution, rights, warrants, options
or Offer or if a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend, distribution, rights,
warrants or options or to participate in such Offer are to be determined, or
63
<PAGE>
(2) such reclassification, change, consolidation, merger, conveyance, transfer
or lease, dissolution, liquidation or winding-up is expected to become effective
and the date, if any is to be fixed, as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such reclassification,
change, consolidation, merger, conveyance, transfer or lease, dissolution,
liquidation or winding-up.
SECTION 1507. Taxes on Conversion.
The Company will pay any and all documentary, stamp or similar taxes
payable to the United States of America or any political subdivision or taxing
authority thereof or therein in respect of the issue or delivery of shares of
Common Stock on conversion of Securities pursuant thereto; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue or delivery of shares of Common
Stock in a name other than that of the Holder of the Securities to be converted
(or payment of cash in lieu thereof to a Person other than such Holder) and no
such issue or delivery (or payment) shall be made unless and until the Person
requesting such issue or delivery (or payment) has paid to the Company the
amount of any such tax or has established, to the satisfaction of the Company,
that such tax has been paid. The Company extends no protection with respect to
any other taxes imposed in connection with conversion of Securities.
SECTION 1508. Company to Provide Stock.
The Company shall reserve, free from preemptive rights, out of its
authorized but unissued shares, sufficient shares to provide for the conversion
of convertible Securities from time to time as such Securities are presented for
conversion, provided, however, that nothing contained herein shall be construed
to preclude the Company from satisfying its obligations in respect of the
conversion of Securities by delivery of repurchased shares of Common Stock which
are held in the treasury of the Company.
If any shares of Common Stock to be reserved for the purpose of conversion
of Securities hereunder require registration with or approval of any
governmental authority under any Federal or State law before such shares may be
validly issued or delivered upon conversion, then the Company covenants that it
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be; provided, however, that nothing in
this Section 1508 shall be deemed to affect in any way the obligations of the
Company to convert Securities into Common Stock as provided in this Article
Fifteen.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Company will take all corporate action which may, in the opinion of counsel, be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Securities will upon issue be fully paid and non-assessable
by the Company and free of preemptive rights.
SECTION 1509. Disclaimer of Responsibility for Certain Matters.
Neither the Trustee, any Conversion Agent nor any agent of either shall at
any time be under any duty or responsibility to any Holder of Securities to
determine whether any facts exist which may require any adjustment of the
Conversion Price, or with respect to the Officers' Certificate referred to in
Section 1504(j), or with respect to the nature or extent of any such adjustment
when made, or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the same. Neither the
Trustee, any Conversion Agent nor any agent of either shall be accountable with
respect to the validity or value (or the kind or amount) of any shares of Common
Stock, or of any securities or property (including cash), which may at any time
be issued or delivered upon the conversion of any Security, and neither the
Trustee, any Conversion Agent nor any agent of either makes any representation
with respect thereto. Neither the Trustee, any
64
<PAGE>
Conversion Agent nor any agent of either shall be responsible for any failure of
the Company to issue, register the transfer of or deliver any shares of Common
Stock or stock certificates or other securities or property (including cash)
upon the surrender of any Security for the purpose of conversion or, subject to
Sections 601 and 603, to comply with any of the covenants of the Company
contained in this Article Fifteen.
SECTION 1510. Return of Funds Deposited for Redemption of Converted Securities.
Any funds which at any time shall have been deposited by the Company or on
its behalf with the Trustee or any Paying Agent for the purpose of paying the
principal of and any premium and interest on any of the Securities and which
shall not be required for such purposes because of the conversion of such
Securities, as provided in this Indenture, shall forthwith after such conversion
be repaid to the Company by the Trustee or such Paying Agent.
ARTICLE SIXTEEN
SUBORDINATION
SECTION 1601. Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees that anything in this Indenture to the
contrary notwithstanding, the indebtedness evidenced by the Securities of each
series is subordinate and junior in right of payment to all Senior Indebtedness
to the extent provided herein or, if so provided in a Board Resolution,
Officers' Certificate or executed supplemental indenture referred to in Sections
201 and 301 by or pursuant to which the form and terms of the Securities of such
series were established, as and to the extent provided by the terms of the
Securities of such series, and each Holder of Securities of each series, by his
acceptance thereof, likewise covenants and agrees to the subordination herein or
therein provided and shall be bound by the provisions hereof or thereof.
This Article Sixteen shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Indebtedness, and such provisions are made for the benefit of the holders
of Senior Indebtedness, and such holders are made obligees hereunder and any one
or more of them may enforce such provisions.
No payment may be made by the Company on account of the principal of or any
premium or interest on the Securities, or to acquire any of the Securities
(including repurchases of Securities at the option of the Holders) for cash or
property (other than Junior Securities), or on account of any redemption
provisions of the Securities, (i) upon the maturity of any Senior Indebtedness
of the Company by lapse of time, acceleration (unless waived) or otherwise,
unless and until all principal of and any premium and interest on such Senior
Indebtedness are first paid in full (or such payment is duly provided for) or
(ii) in the event of default in the payment of any principal of or any premium
or interest on any Senior Indebtedness when it becomes due and payable, whether
at stated maturity or at a date fixed for prepayment or by declaration or
otherwise (a "Payment Default"), unless and until such Payment Default has been
cured or waived or otherwise has ceased to exist.
Upon (i) the happening of an event of default (other than a Payment
Default) that permits the holders of Senior Indebtedness or their representative
immediately to accelerate its maturity and (ii) written notice of such event of
default given to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount outstanding of such Senior Indebtedness or their
representative (a "Payment Notice"), then, unless and until such event of
default has been cured or waived or otherwise has ceased to exist, no payment
(by set off or otherwise) may be made by or on behalf of the Company on account
of the principal of or any premium or interest on the Securities, or to acquire
or repurchase any of the Securities for cash or property, or on account of any
redemption provisions of the Securities, in any such case other than payments
made with Junior
65
<PAGE>
Securities of the Company. Notwithstanding the foregoing, unless (i) the Senior
Indebtedness in respect of which such event of default exists has been declared
due and payable in its entirety within 179 days after the Payment Notice is
delivered as set forth above (the "Payment Blockage Period"), and (ii) such
declaration has not been rescinded or waived, at the end of the Payment Blockage
Period, the Company shall be required to pay all sums not paid to the Holders of
the Securities during the Payment Blockage Period due to the foregoing
prohibitions and to resume all other payments as and when due on the Securities.
Any number of Payment Notices may be given; provided, however, that (i) not more
than one Payment Notice shall be given within a period of any 360 consecutive
days and (ii) no event of default that existed upon the date of such Payment
Notice or the commencement of such Payment Blockage Period (whether or not such
event of default is on the same issue of Senior Indebtedness) shall be made the
basis for the commencement of any other Payment Blockage Period.
Upon any distribution of assets of the Company upon any dissolution,
winding-up, liquidation or reorganization of the Company, whether voluntary of
involuntary, in bankruptcy, insolvency, receivership or a similar proceeding or
upon assignment for the benefit of creditors or any marshaling of assets or
liabilities: (i) the holders of all Senior Indebtedness shall first be entitled
to receive payments in full (or have such payment duly provided for) before the
Holders are entitled to receive any payment on account of the principal of or
any premium or interest on the Securities (other than Junior Securities); and
(ii) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than Junior
Securities), to which the Holders or the Trustee on behalf of the Holders would
be entitled (by set off or otherwise), except for the provisions of this Article
Sixteen, shall be paid by the liquidating trustee or agent or other Person
making such a payment or distribution directly to the holders of Senior
Indebtedness or their representative to the extent necessary to make payment in
full of all such Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution to the holders of such Senior
Indebtedness.
In the event that, notwithstanding the foregoing provisions of this Section
1601, any payment or distribution of assets of the Company (other than Junior
Securities) shall be received by the Trustee or the Holders at a time when such
payment or distribution is prohibited by the provisions of this Section 1601,
then such payment or distribution (subject to the provisions of Section 1603
shall be received and held in trust by the Trustee or such Holders for the
benefit of the holders of Senior Indebtedness, and shall be paid or delivered by
the Trustee or such Holders, as the case may be, to the holders of Senior
Indebtedness remaining unpaid or unprovided for or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Indebtedness may have been
issued, ratably according to the aggregate amounts remaining unpaid on account
of the Senior Indebtedness held or represented by each, for application to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
pay or to provide for the payment of all such Senior Indebtedness in full after
giving effect to any concurrent payment and distribution to the holders of such
Senior Indebtedness.
The failure to make a payment on account of principal of or any premium or
interest on the Securities of any series by reason of any provision of this
Article Sixteen shall not be construed as preventing the occurrence of an Event
of Default. Nothing contained herein shall impair, as between the Company and
the Holders of Securities of each series, the obligation of the Company, which
is absolute and unconditional, to pay to such Holders the principal of and any
premium and interest on such Securities as and when the same shall become due
and payable in accordance with their terms or prevent the Trustee or any Holder
from exercising all rights, powers and remedies otherwise permitted by
applicable law or hereunder upon a default or Event of Default hereunder, all
subject to the rights of the holders of the Senior Indebtedness to receive cash,
securities or other property otherwise payable or deliverable to the Holders.
Senior Indebtedness shall not be deemed to have been paid in full unless
the holders thereof shall have received cash, securities or other property equal
to the amount of such Senior Indebtedness then outstanding. Upon the payment in
full of all Senior Indebtedness, the Holders of Securities of each series shall
be subrogated to all rights of any holders of Senior Indebtedness to receive any
further payments or distributions applicable
66
<PAGE>
to the Senior Indebtedness until the indebtedness evidenced by the Securities of
such series shall have been paid in full, and such payments or distributions
received by such Holders, by reason of such subrogation, of cash, securities or
other property which otherwise would be paid or distributed to the holders of
Senior Indebtedness, shall, as between the Company and its creditors other than
the holders of Senior Indebtedness, on the one hand, and such Holders, on the
other hand, be deemed to be a payment by the Company on account of Senior
Indebtedness, and not on account of the Securities of such series.
The provisions of this Section 1601 shall not impair any rights, interests,
remedies or powers of any secured creditor of the Company 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 the Company, 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 1602. Reliance on Certificate of Liquidating Agent; Further Evidence as
to Ownership of Senior Indebtedness.
Upon any payment or distribution of assets of the Company, the Trustee and
the Holders shall be entitled to rely upon an order or decree issued by any
court of competent jurisdiction in which such dissolution or winding-up or
liquidation or reorganization proceedings are pending or upon a certificate of
the trustee in bankruptcy, receiver, assignee for the benefit of creditors or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders, for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Sixteen. In the absence of any such bankruptcy trustee,
receiver, assignee or other Person, the Trustee shall be entitled to rely upon a
written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee or representative on behalf of such holder) as
evidence that such Person is a holder of Senior Indebtedness (or is such a
trustee or representative). If 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 Sixteen, 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, as to the extent to which such Person is
entitled to participate in such payment or distribution, and as to other facts
pertinent to the rights of such Person under this Article Sixteen, 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 1603. Application by Trustee of Assets Deposited with It.
Amounts deposited in trust with the Trustee pursuant to and in accordance
with Article Thirteen shall be for the sole benefit of Holders of Securities of
each series subject thereto and, to the extent allocated for the payment of such
Securities, shall not be subject to the subordination provisions of this Article
Sixteen. Otherwise, any deposit of assets with the Trustee (whether or not in
trust) for the payment of the principal of or any premium or interest on any
Securities shall be subject to the provisions of this Article Sixteen; provided,
however, if prior to one Business Day preceding the date on which by the terms
of this Indenture any such assets may become distributable for any purpose
(including, without limitation, the payment of the principal of or any premium
or interest on any Security) the Trustee shall not have received with respect to
such assets the Officers' Certificate or written notice provided for in Section
1605, then the Trustee shall have full power and authority to receive such
assets and to apply the same to the purpose for which they were received.
67
<PAGE>
SECTION 1604. Disputes with Holders of Certain Senior Indebtedness.
Any failure by the Company to make any payment on or under any Senior
Indebtedness, other than any Senior Indebtedness as to which the provisions of
this Section 1604 shall have been waived by the Company in the instrument or
instruments by which the Company incurred, assumed, guaranteed or otherwise
created such Senior Indebtedness, shall not be deemed a default under Section
1601 if (i) the Company shall be disputing its obligation to make such payment
or perform such obligation, and (ii) either (A) no final judgment relating to
such dispute shall have been issued against the Company which is in full force
and effect and is not subject to further review, including a judgment that has
become final by reason of the expiration of the time within which a party may
seek further appeal or review, or (B) in the event of a judgment that is subject
to further review or appeal has been issued, the Company shall in good faith be
prosecuting an appeal or other proceeding for review, and a stay of execution
shall have been obtained pending such appeal or review.
SECTION 1605. Trustee Not Charged with Knowledge of Prohibition.
Anything in this Article Sixteen or elsewhere in this Indenture contained
to the contrary notwithstanding, the Trustee shall not at any time be charged
with knowledge of the existence of any facts which would prohibit the making of
any payment of moneys to or by Trustee and shall be entitled to assume
conclusively that no such facts exist, unless and until the Trustee shall have
received an Officers' Certificate to that effect or notice in writing to that
effect signed by or on behalf of the holder or holders, or their
representatives, of Senior Indebtedness who shall have been certified by the
Company or otherwise established to the reasonable satisfaction of the Trustee
to be such holder or holders or representatives or from any trustee under any
indenture pursuant to which such Senior Indebtedness shall be outstanding;
provided, however, that, if the Trustee shall not have received the Officers'
Certificate or notice provided for in this Section 1605 at least one Business
Day preceding the date upon which by the terms hereof any such moneys may become
payable for any purpose (including, without limitation, the payment of the
principal of or any premium or interest on any Security), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such moneys and 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 one Business Day preceding such date. The Company
shall give prompt written notice to the Trustee and to each Paying Agent of any
facts which would prohibit any payment of moneys to or by the Trustee or any
Paying Agent, and the Trustee shall not be charged with knowledge of the curing
of any default or the elimination of any other fact or condition preventing such
payment or distribution unless and until the Trustee shall have received an
Officers' Certificate to such effect.
SECTION 1606. Trustee to Effectuate Subordination.
Each Holder of Securities by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination as between such Holder and holders of Senior
Indebtedness as provided in this Article Sixteen and appoints the Trustee its
attorney-in-fact for any and all such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of the Company (whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors of the Company), the immediate filing of a claim for
the unpaid balance of his Securities in the form required in said proceedings
and cause said claim to be approved. If the Trustee does not file a proper
claim or proof of debt in the form required in such proceeding prior to 30 days
before the expiration of the time to file such claim or claims, then the holders
of the Senior Indebtedness or their representative is hereby authorized to have
the right to file and is hereby authorized to file an appropriate claim for and
on behalf of the Holders of said Securities. Nothing herein contained shall be
deemed to authorize the Trustee or the holders of Senior Indebtedness or their
representative to authorize or consent to or accept or adopt on behalf of any
Security holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee or the holders of Senior
68
<PAGE>
Indebtedness or their representative to vote in respect of the claim of any
Security holder in any such proceeding.
SECTION 1607. Rights of Trustee as Holder of Senior Indebtedness.
The Trustee shall be entitled to all the rights set forth in this Article
Sixteen with respect to any Senior Indebtedness which may at the 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 Sixteen shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.
SECTION 1608. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article Sixteen shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if the Paying Agent
were named in this Article Sixteen in addition to or in place of the Trustee;
provided, however, that Sections 1605 and 1607 shall not apply to the Company if
its acts as Paying Agent.
SECTION 1609. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.
No right of any present or future holders 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 the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with. The holders of Senior Indebtedness may, at any time
or from time to time and in their absolute discretion, change the manner, place
or terms of payment, change or extend the time of payment of, or renew or alter,
any such Senior Indebtedness, or amend or supplement any instrument pursuant to
which any such Senior Indebtedness is issued or by which it may be secured, or
release any security therefor, or exercise or refrain from exercising any other
of their rights under the Senior Indebtedness, including, without limitation,
the waiver of default thereunder, all without notice to or assent from the
Holders of the Securities or the Trustee and without affecting the obligations
of the Company, the Trustee or the Holders of Securities under this Article
Sixteen.
SECTION 1610. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
the Senior Indebtedness, and shall not be liable to any such holders if it shall
mistakenly pay over or distribute money or assets to Security holders or the
Company.
____________________________
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.
69
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
COMPANY
DYNEGY INC.
By /s/ John U. Clarke
------------------------------
John U. Clarke
Senior Vice President
[Signature Page - 1]
<PAGE>
TRUSTEE
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ John R. Prendiville
---------------------------------
John R. Prendiville
Vice President
[Signature Page - 2]
<PAGE>
EXHIBIT A
FORM OF CERTIFICATE TO BE GIVEN BY
BENEFICIAL OWNER OF
INTEREST IN A TEMPORARY GLOBAL SECURITY
DYNEGY INC.
[Title of Securities]
(the "Securities")
This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States Federal income taxation regardless of its source
("United States persons"), (ii) are owned by United States person(s) that are
(A) foreign branches of United States financial institutions (as defined in U.S.
Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial institutions")
purchasing for their own account or for resale, or (B) United States person(s)
who acquired Securities through the foreign branches of the United States
financial institutions and who hold the Securities through such United States
financial institutions on the date hereof (and in either case (A) or (B), each
such United States financial institution hereby agrees, on its own behalf or
through its agent, to comply with the requirements of Section 165(j)(3)(A), (B)
or (C) of the Internal Revenue Code of 1986 as amended, and the regulations
thereunder), or (iii) are owned by United States or foreign financial
institution(s) for purposes of resale during the restricted period (as defined
in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition if
the owner of the Securities is a United States or foreign financial institution
described in clause (iii) above (whether or not also described in clause (i) or
(ii)), this is to further certify that such financial institution has not
acquired the Securities for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its possessions.
If the Securities are of the category contemplated in Section 230.903(c)(3)
of Regulation S under the Securities Act of 1933, as amended (the "Act"), then
this is also to certify that, except as set forth below, the Securities are
beneficially owned by (a) non-U.S. person(s) or (b) U.S. person(s) who purchased
the Securities in transactions which did not require registration under the Act.
As used herein, "United States" or "U.S." means the United States
(including the States and District of Columbia); and its "possessions" include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the date
on which you intend to submit your certification relating to the Securities held
by you for our account in accordance with your Operating Procedures if any
applicable statement herein is not correct on such date, and in the absence of
any such notification it may be assumed that this certification applies as of
such date.
This certification excepts and does not relate to $________ of such
interest in the above Securities in respect of which we are not able to certify
and as to which we understand exchange and delivery of definitive Securities
(or, if relevant, exercise of any rights or collection of any interest) cannot
be made until we do so certify.
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States. In connection therewith, if administrative or legal proceedings are
A-1
<PAGE>
commenced or threatened in connection with which this certification is or would
be relevant, we irrevocably authorize you to produce this certification to any
interested party in such proceedings.
*Dated: ______________, 199__.
NAME OF PERSON MAKING CERTIFICATION
By:
-------------------------------
_______________________________
* To be dated no earlier than the Certification Date.
A-2
<PAGE>
EXHIBIT B
FORM OF CERTIFICATION TO BE GIVEN BY THE
EURO-CLEAR OPERATOR OR CEDEL S.A.
DYNEGY INC.
[Title of Securities]
(the "Securities")
This is to certify that, based solely on certifications we have received in
writing, by tested telex or by electronic transmission from member organizations
appearing in our records as persons being entitled to a portion of the principal
amount set forth below (our "Member Organizations") substantially to the effect
set forth in the Indenture, dated as of September 26, 1996, among Dynegy Inc.,
and The First National Bank of Chicago] as of the date hereof, as supplemented,
amended or restated, [ ] principal amount of the above-captioned
Securities (i) is owned by persons that are not citizens or residents of the
United States, domestic partnerships, domestic corporations or any estate or
trust the income of which is subject to United States Federal income taxation
regardless of its source ("United States persons"), (ii) is owned by United
States persons that are (A) foreign branches of United States financial
institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v))
("financial institutions") purchasing for their own account or for resale, or
(B) United States persons who acquired the Securities through foreign branches
of United States financial institutions and who hold the Securities through such
United States financial institutions on the date hereof (and in either case (A)
or (B), each such United States financial institution has agreed, on its own
behalf or through its agent, that it will comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) is owned by United States or
foreign financial institutions for purposes of resale during the restricted
period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and to the further effect that the United States or foreign financial
institutions described in clause (iii) above (whether or not also described in
clause (i) or (ii)) have certified that they have not acquired the Securities
for purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
If the Securities are of the category contemplated in Section 230.903(c)(3)
of Regulation S under the Securities Act of 1933, as amended, then this is also
to certify with respect to such principal amount of Securities set forth above
that, except as set forth below, we have received in writing, by tested telex or
by electronic transmission, from our Member Organizations entitled to a portion
of such principal amount, certifications with respect to such portion,
substantially to the effect set forth in the Indenture.
We further certify (i) that we are not making available herewith for
exchange (or, if relevant, exercise of any rights or collection of any interest)
any portion of the temporary global Security excepted in such certifications and
(ii) that as of the date hereof we have not received any notification from any
of our Member Organizations to the effect that the statements made by such
Member Organizations with respect to any portion of the part submitted herewith
for exchange (or, if relevant, exercise of any rights or collection of any
interest) are no longer true and cannot be relied upon as of the date hereof.
B-1
<PAGE>
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States. In connection therewith, if administrative or legal proceedings are
commenced or threatened in connection with which this certification is or would
be relevant, we irrevocably authorize you to produce this certification or a
copy hereof to any interested party in such proceedings.
Dated: _______________, 199__.
(dated the Exchange Date or the Interest
Payment Date)
[Morgan Guaranty Trust Company of New
York, as operator of the Euro-clear
System]
or
[CEDEL S.A.]
By:
--------------------------
B-2
<PAGE>
EXHIBIT 4.6
CERTIFICATE OF TRUST
OF
DYNEGY CAPITAL TRUST II
THIS Certificate of Trust of Dynegy Capital Trust II (the "Trust"),
dated July 15, 1998, is being duly executed and filed by The First National Bank
of Chicago, a national banking association, First Chicago Delaware Inc., a
Delaware corporation, and Robert T. Ray, as trustees, with the Secretary of
State of the State of Delaware to form a business trust under the Delaware
Business Trust Act (12 Del.C. (S) 3801 et seq.).
1. Name. The name of the business trust formed hereby is Dynegy
Capital Trust II.
2. Delaware Trustee. The name and business address of the trustee
of the Trust with a principal place of business in the State of Delaware is
First Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective
upon filing with the Secretary of State.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.
THE FIRST NATIONAL BANK OF CHICAGO, as trustee
By: /s/ John R. Prendiville
--------------------------------------------
John R. Prendiville
Vice President
FIRST CHICAGO DELAWARE INC., as trustee
By: /s/ John R. Prendiville
--------------------------------------------
John R. Prendiville
Vice President
/s/ Robert T. Ray
--------------------------------------------
ROBERT T. RAY, as trustee
<PAGE>
EXHIBIT 4.7
DECLARATION OF TRUST
OF DYNEGY CAPITAL TRUST II
This Declaration of Trust, dated as of July 15, 1998 (this "Declaration of
Trust"), among (i) Dynegy Inc., a Delaware corporation, as sponsor (the
"Sponsor"), (ii) The First National Bank of Chicago, a national banking
association, as property trustee (the "Property Trustee"), (iii) First Chicago
Delaware Inc., a Delaware corporation, as trustee (the "Delaware Trustee"), and
(iv) Robert T. Ray, an individual, as trustee (the "Administrative Trustee")
(each of such trustees in (ii), (iii) and (iv) a "Trustee" and collectively, the
"Trustees"). The Sponsor and the Trustees hereby agree as follows:
1. The trust created hereby (the "Trust") shall be known as "Dynegy
Capital Trust II" in which name the Trustees, or the Sponsor to the extent
provided herein, may engage in the transactions contemplated hereby, make and
execute contracts, and sue and be sued.
2. The Sponsor hereby assigns, transfers conveys and sets over to the
Trust the sum of $10. The Trust hereby acknowledge receipt of such amount in
trust from the Sponsor, which amount shall constitute the initial trust estate.
It is the intention of the parties hereto that the Trust created hereby
constitute a business trust under Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. (S) 3801, et seq. (the "Business Trust Act"), and that this document
constitutes the governing instrument of the Trust. The Trustees are hereby
authorized and directed to execute and file a certificate of trust with the
Delaware Secretary of State in accordance with the provisions of the Business
Trust Act.
3. The Sponsor and the Trustees will enter into an amended and restated
Declaration of Trust, satisfactory to each such party and substantially in the
form included as an exhibit to the 1933 Act Registration Statement (as defined
below), to provide for the contemplated operation of the Trust created hereby
and the issuance of the Preferred or Capital Securities and Common Securities
referred to therein. Prior to the execution and delivery of such amended and
restated Declaration of Trust, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior to such
execution and delivery of any licenses, consents or approvals required by
applicable law or otherwise.
4. The Sponsor, as sponsor of the Trust, is hereby authorized, in its
discretion, (i) to file with the Securities and Exchange Commission (the
"Commission") and to execute, in the case of the 1933 Act Registration Statement
and 1934 Act Registration Statement (as herein defined), on behalf of the Trust,
(a) a Registration Statement (the "1933 Act Registration Statement"), including
all pre-effective and post-effective amendments thereto, relating to the
registration under the Securities Act of 1933, as amended (the "1933 Act"), of
the Preferred or Capital Securities of the Trust, (b) any preliminary prospectus
or prospectus or supplement thereto relating to the Preferred or Capital
Securities of the Trust required to be filed pursuant to the 1933 Act, and (c) a
Registration Statement on Form 8-A or other appropriate form (the "1934 Act
Registration Statement"), including all pre-effective and post-effective
<PAGE>
amendments thereto, relating to the registration of the Preferred or Capital
Securities of the Trust under the Securities Exchange Act of 1934, as amended;
(ii) to file with the New York Stock Exchange or other exchange, or the National
Association of Securities Dealers ("NASD"), and execute on behalf of the Trust a
listing application and all other applications, statements, certificates,
agreements and other instruments as shall be necessary or desirable to cause the
Preferred or Capital Securities of the Trust to be listed on the New York Stock
Exchange or such other exchange, or the NASD's Nasdaq National Market; (iii) to
file and execute on behalf of the Trust, such applications, reports, surety
bonds, irrevocable consents, appointments of attorney for service of process and
other papers and documents that shall be necessary or desirable to register the
Preferred or Capital Securities of the Trust under the securities or "Blue Sky"
laws of such jurisdictions as the Sponsor, on behalf of the Trust, may deem
necessary or desirable; (iv) to execute and deliver letters or documents to, or
instruments for filing with, a depository relating to the Preferred or Capital
Securities of the Trust; and (v) to execute, deliver and perform on behalf of
the Trust an underwriting agreement with one or more underwriters relating to
the offering of the Preferred or Capital Securities of the Trust.
In the event that any filing referred to in this Section 4 is required by
the rules and regulations of the Commission, the New York Stock Exchange or
other exchange, NASD, or state securities or "Blue Sky" laws to be executed on
behalf of the Trust by the Trustees, the Trustees, in their capacity as trustees
of the Trust, are hereby authorized to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that the
Trustees, in their capacity as trustees of the Trust, shall not be required to
join in any such filing or execute on behalf of the Trust any such document
unless required by the rules and regulations of the Commission, the New York
Stock Exchange or other exchange, NASD, or state securities or "Blue Sky" laws.
5. This Declaration of Trust may be executed in one or more counterparts.
6. The number of Trustees initially shall be three (3) and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by a
written instrument signed by the Sponsor which may increase or decrease the
number of Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and otherwise meets
the requirements of applicable Delaware law. Subject to the foregoing, the
Sponsor is entitled to appoint or remove without cause any Trustee at any time.
The Trustees may resign upon thirty (30) days' prior notice to the Sponsor.
7. First Chicago Delaware Inc., in its capacity as Trustee, shall not have
the powers or duties of the Trustees set forth herein (except as may be required
under the Business Trust Act) and shall be a trustee hereunder for the sole and
limited purpose of fulfilling the requirements of Section 3807 of the Business
Trust Act.
2
<PAGE>
8. This Declaration of Trust shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws of principles).
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.
DYNEGY INC., as Sponsor
/s/ ROBERT T. RAY
By: _________________________
Robert T. Ray
Assistant Treasurer
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By: /s/ John R. Prendiville
John R. Prendivlle
Vice President
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By: /s/ John R. Prendiville
John R. Prendivlle
Vice President
/s/ Robert T. Ray
ROBERT T. RAY, as Administrative Trustee
<PAGE>
EXHIBIT 4.8
==============================
FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
DYNEGY CAPITAL TRUST II
Dated as of __________, 19__
==============================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions............................................ 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application........................ 7
SECTION 2.2 Lists of Holders of Securities.......................... 7
SECTION 2.3 Reports by the Property Trustee......................... 8
SECTION 2.4 Periodic Reports to Property Trustee.................... 8
SECTION 2.5 Evidence of Compliance with Conditions Precedent........ 8
SECTION 2.6 Events of Default; Waiver............................... 8
SECTION 2.7 Event of Default; Notice................................ 10
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.................................................... 11
SECTION 3.2 Office.................................................. 11
SECTION 3.3 Purpose................................................. 11
SECTION 3.4 Authority............................................... 11
SECTION 3.5 Title to Property of the Trust.......................... 11
SECTION 3.6 Powers and Duties of the Administrative Trustees........ 12
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.... 14
SECTION 3.8 Powers and Duties of the Property Trustee............... 16
SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee.................................................. 18
SECTION 3.10 Certain Rights of Property Trustee...................... 19
SECTION 3.11 Delaware Trustee........................................ 21
SECTION 3.12 Execution of Documents.................................. 21
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.. 22
SECTION 3.14 Duration of Trust....................................... 22
SECTION 3.15 Mergers................................................. 22
SECTION 3.16 Property Trustee May File Proofs of Claim............... 24
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities................. 25
SECTION 4.2 Responsibilities of the Sponsor......................... 25
SECTION 4.3 Right to Proceed........................................ 26
-1-
<PAGE>
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees: Appointment of Co-Trustee........... 26
SECTION 5.2 Delaware Trustee........................................ 26
SECTION 5.3 Property Trustee; Eligibility........................... 27
SECTION 5.4 Certain Qualifications of Administrative Trustees and
Delaware Trustee Generally............................... 28
SECTION 5.5 Administrative Trustees................................. 28
SECTION 5.6 Delaware Trustee........................................ 28
SECTION 5.7 Appointment, Removal and Resignation of Trustees........ 28
SECTION 5.8 Vacancies Among Trustees................................ 30
SECTION 5.9 Effect of Vacancies..................................... 30
SECTION 5.10 Meetings................................................ 30
SECTION 5.11 Delegation of Power..................................... 31
SECTION 5.12 Merger, Conversion, Consolidation or Succession
to Business.............................................. 31
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions........................................... 32
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities................. 32
SECTION 7.2 Execution and Authentication............................ 32
SECTION 7.3 Form and Dating......................................... 33
SECTION 7.4 Registrar and Paying Agent.............................. 34
SECTION 7.5 Paying Agent to Hold Money in Trust..................... 35
SECTION 7.6 Replacement Securities.................................. 35
SECTION 7.7 Outstanding Preferred Securities........................ 35
SECTION 7.8 Preferred Securities in Treasury........................ 36
SECTION 7.9 Temporary Securities.................................... 36
SECTION 7.10 Cancellation............................................ 37
SECTION 7.11 CUSIP Numbers........................................... 37
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust.................................... 37
-2-
<PAGE>
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.................................. 38
SECTION 9.2 Transfer Procedures and Restrictions.................... 39
SECTION 9.3 Deemed Security Holders................................. 43
SECTION 9.4 Book Entry Interests.................................... 43
SECTION 9.5 Notices to Clearing Agency.............................. 44
SECTION 9.6 Appointment of Successor Clearing Agency................ 44
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability............................................... 44
SECTION 10.2 Exculpation............................................. 45
SECTION 10.3 Fiduciary Duty.......................................... 45
SECTION 10.4 Indemnification......................................... 46
SECTION 10.5 Outside Businesses...................................... 49
SECTION 10.6 Compensation; Fees...................................... 49
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year............................................. 50
SECTION 11.2 Certain Accounting Matters.............................. 50
SECTION 11.3 Banking................................................. 50
SECTION 11.4 Withholding............................................. 51
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.............................................. 51
SECTION 12.2 Meetings of the Holders; Action by Written Consent...... 53
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee...... 54
SECTION 13.2 Representations and Warranties of Delaware Trustee...... 55
-3-
<PAGE>
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices................................................. 55
SECTION 14.2 GOVERNING LAW........................................... 57
SECTION 14.3 Intention of the Parties................................ 57
SECTION 14.4 Headings................................................ 57
SECTION 14.5 Successors and Assigns.................................. 57
SECTION 14.6 Partial Enforceability.................................. 57
SECTION 14.7 Counterparts............................................ 57
SECTION 14.8 No Recourse............................................. 58
ANNEX I TERMS OF SECURITIES.......................................... I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE.......................A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE..........................A2-1
EXHIBIT B SPECIMEN OF DEBENTURE........................................ B-1
-4-
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a)............................................... 5.3
310(b)............................................... 5.3(c), 5.3(d)
311(a)............................................... 2.2(b)
311(b)............................................... 2.2(b)
312(a)............................................... 2.2(a)
312(b)............................................... 2.2(b)
313.................................................. 2.3
314(a)............................................... 2.4; 3.6(j)
314(c)............................................... 2.5
315(a)............................................... 3.9
315(b)............................................... 2.7(a)
315(c)............................................... 3.9(a)
315(d)............................................... 3.9(b)
316(a)............................................... 2.6
316(c)............................................... 3.6(e)
317(a)............................................... 3.8(e); 3.8(h)
317(b)............................................... 3.8(i); 7.5
- ---------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
-5-
<PAGE>
FORM OF
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
DYNEGY CAPITAL TRUST II
AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration") dated
and effective as of _______, ___, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Dynegy Capital Trust
II (the "Trust"), a trust created under the Delaware Business Trust Act pursuant
to a Declaration of Trust dated as of ________, ___ (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on _______, ___ for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer (each as hereinafter defined), and engaging in only those
other activities necessary, advisable or incidental thereto; and
WHEREAS, the parties hereto, by this Declaration, amend and restate
each and every term and provision of the Original Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a statutory business trust under the Business Trust Act
and that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets contributed to the Trust will be
held in trust for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration, and the
parties hereto hereby amend and restate each and every term and provision of the
original Declaration as follows:
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
-----------
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
<PAGE>
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Administrative Trustee" has the meaning set forth in Section 5.1(b).
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Registrar.
"Authorized Officer" of a Person means any other Person that is
authorized to legally bind such former Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or its nominee,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday or a Sunday or a
day on which banking institutions in Chicago, Illinois or Houston, Texas are
authorized or required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code (S) 3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the United States Securities and Exchange
Commission as from time to time constituted, or if any time after the execution
of this Declaration such Commission is
-2-
<PAGE>
not existing and performing the duties now assigned to it under applicable
federal securities laws, then the body performing such duties at such time.
"Common Securities" has the meaning specified in Section 7.1(a).
"Common Securities Guarantee" means the guarantee agreement dated as
of May 28, 1997 of the Sponsor in respect of the Common Securities.
"Common Securities Subscription Agreement" means the subscription
agreement dated as of _____, ___ of the Sponsor in respect of the Common
Securities.
"Company Indemnified Person" means (a) any Administrative Trustee; (b)
any Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any officer, employee or agent of the Trust or
its Affiliates.
"Corporate Trust Office" means the office of the Property Trustee at
which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Declaration is located at One First National Plaza, Suite
0126, Chicago, Illinois 60670.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Dynegy Inc., a Delaware corporation, or any
successor entity resulting from any consolidation, amalgamation, merger or other
business combination, in its capacity as issuer of the Debentures under the
Indenture.
"Debenture Subscription Agreement" means the subscription agreement
dated as of _______, __ of the Trust in respect of the Debentures.
"Debenture Trustee" means The First National Bank of Chicago, a
national banking association, as trustee under the Indenture until a successor
is appointed thereunder, and thereafter means such successor trustee.
"Debentures" means, collectively, the ____% Debentures issued pursuant
to the Indenture.
"Default" means an event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.
"Definitive Preferred Securities" shall have the meaning set forth in
Section 7.3(c).
"Delaware Trustee" has the meaning set forth in Section 5.2.
-3-
<PAGE>
"Direct Action" shall have the meaning set forth in Section 3.8(e).
"Distribution" means a distribution payable to Holders in accordance
with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Preferred Security" has the meaning set forth in Section
7.3(a).
"Holder" means a Person in whose name a Security is registered, such
Person being a beneficial owner within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture dated as of ______, ___, among the
Debenture Issuer and the Debenture Trustee, as amended from time to time.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"List of Holders" has the meaning set forth in Section 2.2(a).
"Majority in liquidation amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount of all outstanding Securities of the relevant
class.
-4-
<PAGE>
"Officers' Certificate" means, with respect to any Person, a
certificate signed by any of the Chairman of the Board, a Vice Chairman of the
Board, the Chief Executive Officer, the President or a Vice President and the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
such Person. Any Officers' Certificate delivered by the Trust shall be signed
by at least one Administrative Trustee. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of the Sponsor, and who shall be acceptable to the Property Trustee.
"Paying Agent" has the meaning specified in Section 7.4.
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning specified in Section 7.1(a).
"Preferred Securities Guarantee" means the guarantee agreement dated
as of ______, ___, by the Sponsor in respect of Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Property Trustee" has the meaning set forth in Section 5.3(a).
"Property Trustee Account" has the meaning set forth in Section
3.8(c)(i).
-5-
<PAGE>
"Quorum" means a majority of the Administrative Trustees or, if there
are only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means any officer within the Corporate Trust
Office of the Property Trustee with direct responsibility for the administration
of this Declaration and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Restricted Definitive Preferred Securities" has the meaning set forth
in Section 7.3(c).
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
successor rule or regulation.
"Securities" or "Trust Securities" means the Common Securities and the
Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Special Event" has the meaning set forth in Section 4(c) of Annex I
hereto.
"Sponsor" means NGC Corporation, a Delaware corporation, or any
successor entity resulting from any merger, consolidation, amalgamation or other
business combination, in its capacity as sponsor of the Trust.
"Successor Entity" has the meaning set forth in Section 3.15(b)(i).
"Successor Property Trustee" has the meaning set forth in Section
3.8(f).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"10% in liquidation amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately
-6-
<PAGE>
as a class, who are the record owners of 10% or more of the aggregate
liquidation amount of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue as a trustee in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration in order for this
Declaration to be qualified under the Trust Indenture Act and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by (S)(S) 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
------------------------------
(a) Each of the Sponsor and the Administrative Trustees on behalf of
the Trust shall provide the Property Trustee, unless the Property Trustee is
Registrar for the Securities, (i) within 14 days after each record date for
payment of Distributions, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Holders ("List of
Holders") as of such record date, provided that neither the Sponsor nor the
Administrative Trustees on behalf of the Trust shall be obligated to provide
such List of Holders at any time that the List of Holders does not differ from
the most recent List of Holders given to the Property Trustee by the Sponsor and
the
-7-
<PAGE>
Administrative Trustees on behalf of the Trust, and (ii) at any other time,
within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Property Trustee. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in Lists of Holders
given to it or which it receives in the capacity as Paying Agent (if acting in
such capacity), provided that the Property Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
(S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
-------------------------------
Within 60 days after _______ of each year, commencing _______, ___,
the Property Trustee shall provide to the Holders of the Preferred Securities
such reports as are required by (S) 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by (S) 313 of the Trust Indenture Act. The
Property Trustee shall also comply with the requirements of (S) 313(d) of the
Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
------------------------------------
Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as are required by (S) 314 (if any) and the compliance certificate
required by (S) 314 of the Trust Indenture Act in the form, in the manner and at
the times required by (S) 314(a)(4) of the Trust Indenture Act, such compliance
certificate to be delivered annually on or before 120 days after the end of each
fiscal year of the Sponsor.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
------------------------------------------------
Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent provided for in this Declaration that relate to any of the
matters set forth in (S) 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to (S) 314(c)(1) of the
Trust Indenture Act may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
-------------------------
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
-8-
<PAGE>
(ii) requires the consent or vote of greater than a majority in
aggregate principal amount of the holders of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least the
proportion in aggregate liquidation amount of the Preferred Securities that
the relevant Super Majority represents of the aggregate principal amount of
the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as provided below in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in aggregate
liquidation amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, the Holders of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and their consequences if all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. The foregoing provisions of this Section 2.6(b) shall be in
lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
(S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing
-9-
<PAGE>
provisions of this Section 2.6(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee, at the direction of the Holders of the Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu
of (S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
------------------------
(a) The Property Trustee shall, within 90 days after the occurrence of
a Default actually known to a Responsible Officer, transmit by mail, first class
postage prepaid, to the Holders, notices of all such Defaults with respect to
the Securities, unless such Defaults have been cured before the giving of such
notice; provided that, except for a Default in the payment of principal of (or
premium, if any) or interest (including Compounded Interest and Additional Sums
(as such terms are defined in the Indenture), if any) on any of the Debentures,
the Property Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer in good faith determines that the withholding of
such notice is in the interests of the Holders.
(b) The Property Trustee shall not be deemed to have knowledge of any
Default except:
(i) a Default under Sections 5.01(a) (other than the payment of
Compounded Interest and Additional Sums) and 5.01(b) of the Indenture; or
(ii) any Default as to which the Property Trustee shall have received
written notice or of which a Responsible Officer charged with the
administration of the Declaration shall have actual knowledge.
(c) Within five Business Days after the occurrence of any Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit notice of such Event of Default to the Holders of the Preferred
Securities, the Administrative Trustees and the Sponsor, unless such Event of
Default shall have been cured or waived. The Sponsor and the Administrative
Trustees shall file annually with the Property Trustee a certification as to
whether or not they are in compliance with all the conditions and covenants
applicable to them under this Declaration.
-10-
<PAGE>
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
----
The Trust is named "Dynegy Capital Trust II" as such name may be
modified from time to time by the Administrative Trustees following written
notice to the Delaware Trustee, the Property Trustee and the Holders. The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Administrative Trustees.
SECTION 3.2 Office.
------
The address of the principal office of the Trust is c/o Dynegy Inc.,
1000 Louisiana, Suite 5800, Houston, Texas 77002. On ten Business Days written
notice to the Delaware Trustee, the Property Trustee and the Holders of
Securities, the Administrative Trustees may designate another principal office.
SECTION 3.3 Purpose.
-------
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities, (b) use the proceeds from the sale of the Securities to acquire
the Debentures, and (c) except as otherwise limited herein, to engage in only
those other activities necessary, advisable or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived from
investments, mortgage or pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
---------
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Administrative Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Administrative Trustees in accordance with their powers
shall constitute the act of and serve to bind the Trust and an action taken by
the Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
------------------------------
Except as provided in Section 3.8 with respect to the Debentures and
the Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
-11-
<PAGE>
SECTION 3.6 Powers and Duties of the Administrative Trustees.
------------------------------------------------
The Administrative Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that except as contemplated in Section 7.1(a),
(i) the Trust may issue no more than one series of Preferred Securities and no
more than one series of Common Securities, (ii) there shall be no interests in
the Trust other than the Securities, and (iii) the issuance of Securities shall
be limited to a simultaneous issuance of both Preferred Securities and Common
Securities at the Closing Date;
(b) in connection with the issue and sale of the Preferred Securities,
to the extent that such activities have not been performed in full by the
Sponsor pursuant to the Original Declaration prior to the date of this
Declaration, to:
(i) prepare and file a Registration Statement (including the
Prospectus contained therein and any Prospectus Supplement relating
thereto) with the Commission in accordance with the requirements of the
Securities Act;
(ii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the Preferred Securities in any State in which
the Sponsor has determined to qualify or register such Preferred Securities
for sale;
(iii) if deemed necessary or desirable by the Sponsor, execute and
file an application, prepared by the Sponsor, to permit the Preferred
Securities to trade or be quoted or listed in or on the securities
exchange, quotation system or the Nasdaq Stock Market's National Market;
(iv) execute and deliver letters, documents, or instruments with DTC
and other Clearing Agencies relating to the Preferred Securities;
(v) if required, execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by the
Sponsor, relating to the registration of the Preferred Securities under
Section 12(b) of the Exchange Act;
(vi) execute and enter into an Underwriting Agreement providing for
the sale and registration of the Preferred Securities; and
(vii) execute and enter into the Debenture Subscription Agreement and
the Common Securities Subscription Agreement;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders;
-12-
<PAGE>
(d) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of (S) 316(c) of the Trust Indenture Act, Distributions,
voting rights, redemptions and exchanges, and to issue relevant notices to the
Holders of Preferred Securities and Holders of Common Securities as to such
actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Administrative Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by (S) 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Administrative Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar for the
Securities or to appoint a Paying Agent for the Securities as provided in
Section 7.4 except for such time as such power to appoint a Paying Agent is
vested in the Property Trustee;
(m) to give prompt written notice to the Property Trustee and to
Holders of any notice received from the Debenture Issuer of its election to
defer payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders or to enable the Trust
to effect the purposes for which the Trust was created;
(o) to take any action, not inconsistent with this Declaration or with
applicable law, that the Administrative Trustees determine in their discretion
to be necessary or desirable in carrying out the activities of the Trust as set
out in this Section 3.6, including, but not limited to:
-13-
<PAGE>
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes;
(p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Administrative Trustees, on behalf of
the Trust; and
(q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Administrative Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Administrative Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.
The Administrative Trustees shall take all actions on behalf of the
Trust that are not specifically required by this Declaration to be taken by any
other Trustee.
Any expenses incurred by the Administrative Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
(a) The Trust shall not, and the Trustees (including the Property
Trustee and the Delaware Trustee) shall cause the Trust not to, engage in any
activity other than as required or authorized by this Declaration. The Trust
shall not:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders pursuant to
the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
-14-
<PAGE>
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever, except
as otherwise expressly provided herein;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities;
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of conducting any proceeding with respect
to any remedy available to the Debenture Trustee, or exercising any trust
or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the
Indenture, or (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures shall be due and payable;
(viii) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required unless the
Trust shall have received an opinion of independent tax counsel experienced
in such matters to the effect that such amendment, modification or
termination will not cause more than an insubstantial risk that for United
States federal income tax purposes the Trust will not be classified as a
grantor trust;
(ix) take or consent to any action that would result in the placement
of a lien, pledge, charge, mortgage or other encumbrance on any of the
Trust property;
(x) vary the investment (within the meaning of Treasury Regulation
Section 301.7701-4(c)) of the Trust or of the Holders of Securities; or
(xi) after the date hereof, enter into any contract or agreement
(other than any other depositary agreement or any agreement with any
securities exchange or automated quotation system) that does not expressly
provide that the Holders of Preferred Securities, in their capacities as
such, have limited liability (in accordance with the provisions of the
Business Trust Act) for the liabilities and obligations of the Trust, which
express provision shall be in substantially the following form, "The
Holders of the Preferred Securities, in their capacities as such, shall not
be personally liable for any liabilities or obligations of the Trust
arising out of this Agreement, and the parties hereto hereby agree that the
Holders of the Preferred Securities, in their capacities as such, shall be
entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware."
-15-
<PAGE>
SECTION 3.8 Powers and Duties of the Property Trustee.
-----------------------------------------
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the Trust
and the Holders. The right, title and interest of the Property Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.7. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders and,
upon the receipt of payments of funds made in respect of the Debentures
held by the Property Trustee, deposit such funds into the Property Trustee
Account and make payments or cause the Paying Agent to make payments to the
Holders from the Property Trustee Account in accordance with Section 6.1.
Funds in the Property Trustee Account shall be held uninvested until
disbursed in accordance with this Declaration. The Property Trustee Account
shall be an account that is maintained with a banking institution the
rating on whose long-term unsecured indebtedness by a "nationally
recognized statistical rating organization", as that term is defined for
purposes of Rule 436(g)(2) under the Securities Act, is at least investment
grade;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Trust Securities to the extent
the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the
Administrative Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as shall be necessary or appropriate
to effect the distribution of the Debentures to Holders upon the occurrence
of certain events.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities.
(e) If an Event of Default has occurred and is continuing, then the
Holders of a Majority in liquidation amount of Preferred Securities have the
right to direct the exercise of any trust or power conferred upon the Property
Trustee under this Declaration, including the right to direct the Property
Trustee to exercise the remedies available to it as holder of the Debentures and
the Preferred Securities Guarantee. Subject to Section 3.9(a), the Property
Trustee shall take any Legal Action which arises out of or in connection with an
Event of Default of which a Responsible Officer has actual knowledge or the
Property Trustee's duties and obligations under this Declaration
-16-
<PAGE>
or the Trust Indenture Act and if the Property Trustee shall have failed to take
such Legal Action, the Holders of the Preferred Securities, to the fullest
extent permitted by law, may take such Legal Action, to the same extent as if
such Holders of Preferred Securities held an aggregate principal amount of
Debentures equal to the aggregate liquidation amount of such Preferred
Securities, without first proceeding against the Property Trustee or the Trust;
provided, however, that if an Event of Default has occurred and is continuing
and such event is attributable to the failure of the Debenture Issuer to pay the
principal of or premium, if any, or interest (including Compounded Interest and
Additional Sums, if any) on the Debentures on the date such principal, premium,
if any, or interest (including Compounded Interest and Additional Sums, if any)
is otherwise payable (or in the case of redemption, on the redemption date),
then a Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or premium, if any, or
interest (including Compounded Interest and Additional Sums, if any) on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such Holder (a "Direct Action") on or after the
respective due date specified in the Debentures. In connection with such Direct
Action, the Holders of the Common Securities will be subrogated to the rights of
such Holder of Preferred Securities to the extent of any payment made by the
Debenture Issuer to such Holder of Preferred Securities in such Direct Action.
Except as provided in the preceding sentences, the Holders of Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.
(f) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders pursuant to the terms of the
Securities; or
(ii) a successor Property Trustee has been appointed and has accepted
that appointment in accordance with Section 5.7 (a "Successor Property
Trustee").
(g) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the Indenture
and, if an Event of Default actually known to a Responsible Officer occurs and
is continuing, the Property Trustee shall, for the benefit of Holders, enforce
its rights as holder of the Debentures subject to the rights of the Holders
pursuant to the terms of such Securities.
(h) The Property Trustee shall be authorized to undertake any actions
set forth in (S) 317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the Paying Agent, the
Property Trustee may authorize one or more Persons to act as additional Paying
Agents and to pay Distributions, redemption payments or liquidation payments on
behalf of the Trust with respect to all Securities and any such Paying Agent
shall comply with (S) 317(b) of the Trust Indenture Act. Any such additional
Paying Agent may be removed by the Property Trustee at any time the Property
Trustee remains as Paying Agent and a successor Paying Agent or additional
Paying Agents may be (but are not required to be) appointed at any time by the
Property Trustee while the Property Trustee is so acting as Paying Agent.
-17-
<PAGE>
(j) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.6.
Notwithstanding anything expressed or implied to the contrary in this
Declaration or any Annex or Exhibit hereto, (i) the Property Trustee must
exercise the powers set forth in this Section 3.8 in a manner that is consistent
with the purposes and functions of the Trust set out in Section 3.3, and (ii)
the Property Trustee shall not take any action that is inconsistent with the
purposes and functions of the Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
-----------------------------------------------------------
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and in the Securities and no implied covenants shall be read
into this Declaration against the Property Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6) of
which a Responsible Officer has actual knowledge, the Property Trustee shall
exercise such of the rights and powers vested in it by this Declaration, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration and in
the Securities and the Property Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Declaration and in the Securities, and no implied
covenants or obligations shall be read into this Declaration or the
Securities against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Declaration;
provided, however, that in the case of any such certificates or
opinions that by any provision hereof are specifically required to be
furnished to the Property Trustee, the Property Trustee shall be under
a duty to examine the same to determine whether or not they conform to
the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Property Trustee was negligent in ascertaining the
pertinent facts;
-18-
<PAGE>
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation
amount of the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Property Trustee against such risk or
liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody,
safekeeping and physical preservation of the Debentures and the Property
Trustee Account shall be to deal with such property in a similar manner as
the Property Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to the
Property Trustee under this Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree in writing with
the Sponsor. Money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section 3.8(c)(i) and except
to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Property Trustee be
liable for any default or misconduct of the Administrative Trustees or the
Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
----------------------------------
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Administrative
Trustees contemplated by this Declaration may be sufficiently evidenced by
an Officers' Certificate;
-19-
<PAGE>
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Administrative Trustees;
(iv) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel or other experts of
its selection and the advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area
of expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of its
employees. The Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration from any
court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Declaration at the request
or direction of any Holder, unless such Holder shall have provided to the
Property Trustee security and indemnity, reasonably satisfactory to the
Property Trustee, against the costs, expenses (including reasonable
attorneys' fees and expenses and the expenses of the Property Trustee's
agents, nominees or custodians) and liabilities that might be incurred by
it in complying with such request or direction, including such reasonable
advances as may be requested by the Property Trustee provided, that,
nothing contained in this Section 3.10(a)(vi) shall be taken to relieve the
Property Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, custodians, nominees or attorneys and the Property Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders, and the signature of the Property
Trustee or its agents alone shall be sufficient and effective to perform
any such action and no third party shall be required to inquire as to the
authority of the Property Trustee to so act or as to its compliance with
any
-20-
<PAGE>
of the terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Property Trustee (i) may request instructions from the Holders which
instructions may only be given by the Holders of the same proportion in
liquidation amount of the Securities as would be entitled to direct the
Property Trustee under the terms of the Securities in respect of such
remedy, right or action, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in accordance
with such instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Declaration; and
(xii) the Property Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith, without negligence,
and reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
----------------
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Trustees (except as required under the Business Trust Act) described in this
Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be
a Trustee for the sole and limited purpose of fulfilling the requirements of (S)
3807 of the Business Trust Act. In the event the Delaware Trustee shall at any
time be required to take any action or perform any duty hereunder, the Delaware
Trustee shall be entitled to the benefits of Section 3.9(b)(ii)-(viii) and
Section 3.10. No implied covenants or obligations shall be read into this
Declaration against the Delaware Trustee.
SECTION 3.12 Execution of Documents.
----------------------
Except as otherwise required by the Business Trust Act or this
Declaration, any Administrative Trustee or, if there is only one, such
Administrative Trustee is authorized to execute on behalf of the Trust any
documents that the Administrative Trustees have the power and authority
-21-
<PAGE>
to execute pursuant to Section 3.6; provided that any Registration Statement
referred to in Section 3.6(b)(i), including any amendments thereto, shall be
signed by all of the Administrative Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
-----------------
The Trust, unless dissolved pursuant to the provisions of Article VIII
hereof, shall have existence up to _______, ___.
SECTION 3.15 Mergers.
-------
(a) The Trust may not merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, except as described in
Section 3.15(b) and (c) of this Declaration and Section 3 of Annex I.
(b) The Trust may, at the request of the Sponsor, with the consent of
the Administrative Trustees or, if there are more than two, a majority of the
Administrative Trustees and without the consent of the Holders, the Delaware
Trustee or the Property Trustee, merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to, a trust organized as
such under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under
the Securities and this Declaration; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the
Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor Entity
that possesses the same powers and duties as the Property Trustee as the
holder of the Debentures;
-22-
<PAGE>
(iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or with another organization on which the Preferred
Securities are then listed or quoted, if any;
(iv) if the Preferred Securities (including any Successor Securities)
are rated by any nationally recognized statistical rating organization
prior to such transaction, such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities), or if the Debentures are
so rated, the Debentures, to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the Holders (including the holders of
any Successor Securities) in any material respect (other than with respect
to any dilution of such Holders' interests in the new entity);
(vi) such Successor Entity has a purpose substantially identical to
that of the Trust;
(vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Sponsor has received an opinion of an
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders (including the holders of
any Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the new entity);
(B) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company; and
(C) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Trust (or the
Successor Entity) will continue to be classified as a grantor trust
for United States federal income tax purposes.
(viii) the Sponsor or any permitted successor or assignee owns all of
the common securities of such Successor Entity and guarantees the
obligations of such Successor Entity under the Successor Securities at
least to the extent provided by the Preferred Securities Guarantee and the
Common Securities Guarantee;
(ix) such Successor Entity expressly assumes all of the obligations
of the Trust with respect to the Trustee; and
-23-
<PAGE>
(x) there shall have been furnished to the Property Trustee an
Officers' Certificate and an Opinion of Counsel, each to the effect that
all conditions precedent in this Declaration to such transaction have been
satisfied.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, convert into, or be replaced by, or
convey, transfer or lease its properties and assets as an entirety or
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 Trust or the Successor Entity not to be classified as a grantor
trust for United States federal income tax purposes or would cause the Holders
of the Securities not to be treated as owning an undivided interest in the
Debentures.
SECTION 3.16 Property Trustee May File Proofs of Claim.
-----------------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Securities (or, if the
Securities are original issue discount Securities, such portion of the
liquidation amount as may be specified in the terms of such Securities) and to
file such other papers or documents as may be necessary or advisable in order to
have the claims of the Property Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or compensation affecting the
Securities or the rights of any Holder thereof to authorize the Property Trustee
to vote in respect of the claim of any Holder in any such proceeding.
-24-
<PAGE>
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
---------------------------------------
At the Closing Date, the Sponsor will purchase all of the Common
Securities then issued by the Trust, in an amount equal to at least 3% of the
total capital of the Trust, at the same time as the Preferred Securities are
issued and sold.
SECTION 4.2 Responsibilities of the Sponsor.
-------------------------------
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) if deemed necessary by the Sponsor and not performed by the
Sponsor prior to the date of this Declaration pursuant to the Original
Declaration, to prepare for filing by the Trust with the Commission any
Registration Statement (including a Prospectus contained therein and any
Prospectus Supplement relating thereto), including any amendments thereto, as
contemplated by Section 3.6(b)(i);
(b) if deemed necessary by the Sponsor and not performed by the
Sponsor prior to the date of this Declaration pursuant to the Original
Declaration, to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and to do
any and all such acts, other than actions which must be taken by the Trust, and
advise the Trust of actions it must take, and prepare for execution and filing
any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States;
(c) if deemed necessary or desirable by the Sponsor, to prepare for
filing by the Trust an application to permit the Preferred Securities to trade
or be quoted or listed in or on any other securities exchange, quotation system
or the Nasdaq Stock Market's National Market;
(d) if deemed necessary or desirable by the Sponsor, to prepare for
filing by the Trust with the Commission a registration statement on Form 8-A,
including any amendments thereto, relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act;
(e) if deemed necessary by the Sponsor and not performed by the
Sponsor prior to the date of this Declaration pursuant to the Original
Declaration, to negotiate the terms of an Underwriting Agreement providing for
the sale and registration of the Preferred Securities; and
(f) if deemed necessary by the Sponsor and not performed by the
Sponsor prior to the date of this Declaration pursuant to the Original
Declaration, to negotiate the terms of the Debenture Subscription Agreement and
the Common Securities Agreement.
-25-
<PAGE>
SECTION 4.3 Right to Proceed.
----------------
The Sponsor acknowledges the rights of the Holders of Preferred
Securities (as set forth in Section 3.8(e) of this Declaration and Sections 5(b)
and 6(c) of Annex I), in the event that a failure of the Trust to pay
Distributions on the Preferred Securities is attributable to the failure of the
Company to pay interest or principal on the Debentures, to institute a
proceeding directly against the Debenture Issuer for enforcement of its payment
obligations on the Debentures.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees: Appointment of Co-Trustee.
---------------------------------------------
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities;
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee shall satisfy the requirements of
the Delaware Trustee pursuant to Section 5.2; (2) there shall be at least one
Trustee who is an officer of the Sponsor (an "Administrative Trustee"); and (3)
one Trustee shall be the Property Trustee for so long as this Declaration is
required to qualify as an indenture under the Trust Indenture Act, and such
Trustee may also serve as Delaware Trustee if it meets the applicable
requirements. Notwithstanding the above, unless an Event of Default shall have
occurred and be continuing, at any time or times, for the purpose of meeting the
legal requirements of the Trust Indenture Act or of any jurisdiction in which
any part of the Trust's property may at the time be located, the Holders of a
Majority in liquidation amount of the Common Securities acting as a class at a
meeting of the Holders of the Common Securities, and the Administrative Trustees
shall have power to appoint one or more Persons either to act as a co-trustee,
jointly with the Property Trustee, of all or any part of the Trust's property,
or to act as separate trustee of any such property, in either case with such
powers as may be provided in the instrument of appointment, and to vest in such
Person or Persons in such capacity any property, title, right or power deemed
necessary or desirable, subject to the provisions of this Declaration. In case
an Event of Default has occurred and is continuing, the Property Trustee alone
shall have power to make any such appointment of a co-trustee.
SECTION 5.2 Delaware Trustee.
----------------
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
-26-
<PAGE>
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements of
applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
-----------------------------
(a) There shall at all times be one Trustee (the "Property Trustee")
which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a Person organized and doing business under the laws of the
United States of America or any State or Territory thereof or of the
District of Columbia, or a Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under such
laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority. If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of this
Section 5.3(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of (S) 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in (S) 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of (S) 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee and the Indenture shall be
deemed to be specifically described in this Declaration for purposes of clause
(i) of the first proviso contained in (S) 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services Division
-27-
<PAGE>
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware
--------------------------------------------------------------
Trustee Generally.
-----------------
Each Administrative Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.
SECTION 5.5 Administrative Trustees.
-----------------------
The initial Administrative Trustees shall be:
_________________
_________________
_________________
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Administrative Trustees is called with respect to any matter over
which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.
(b) An Administrative Trustee shall have the authority set forth in
Section 3.12 to execute on behalf of the Trust any documents that the
Administrative Trustees have the power and authority to cause the Trust to
execute pursuant to Section 3.6 provided that any Registration Statement
referred to in Section 3.6(b)(i), including any amendments thereto, shall be
signed by all of the Administrative Trustees.
SECTION 5.6 Delaware Trustee.
----------------
The initial Delaware Trustee shall be:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
Attention: Michael J. Majchrzak
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
------------------------------------------------
(a) Subject to Section 5.7(b) of this Declaration and to Section 6(b)
of Annex I hereto, Trustees may be appointed or removed without cause at any
time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor;
(ii) unless an Event of Default shall have occurred and be continuing
after the issuance of any Securities, by vote of the Holders of a Majority
in liquidation amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities; and
-28-
<PAGE>
(iii) if an Event of Default shall have occurred and be continuing
after the issuance of the Securities, with respect to the Property Trustee
or the Delaware Trustee, by vote of Holders of a Majority in liquidation
amount of the Preferred Securities voting as a class at a meeting of
Holders of the Preferred Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.7(a) until a Successor Property Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Property Trustee and delivered to the Administrative Trustees
and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with this Section 5.7(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Administrative Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the Holders; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities or, if an Event of Default
shall have occurred and be continuing after the issuance of the Securities, the
Holders of the Preferred Securities shall use their best efforts to promptly
appoint a Successor Delaware Trustee or Successor Property Trustee, as the case
may be, if the Property Trustee or the Delaware Trustee delivers an instrument
of resignation in accordance with this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.7 within 60 days after
-29-
<PAGE>
delivery of an instrument of resignation or removal, the Property Trustee or
Delaware Trustee resigning or being removed, as applicable, may petition any
court of competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper and prescribe, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
(g) At the time of resignation or removal of the Property Trustee or
the Delaware Trustee, the Debenture Issuer shall pay to such Trustee any amounts
that may be owed to such Trustee pursuant to Section 10.4.
SECTION 5.8 Vacancies Among Trustees.
------------------------
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or, if
there are more than two, a majority of the Administrative Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
-------------------
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to dissolve, terminate or annul the Trust. Whenever a vacancy in
the number of Administrative Trustees shall occur, until such vacancy is filled
by the appointment of an Administrative Trustee in accordance with Section 5.7,
the Administrative Trustees in office, regardless of their number, shall have
all the powers granted to the Administrative Trustees and shall discharge all
the duties imposed upon the Administrative Trustees by this Declaration.
SECTION 5.10 Meetings.
--------
If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before such meeting. Notice
of any telephonic meetings of the Administrative Trustees or any committee
thereof shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an
-30-
<PAGE>
Administrative Trustee attends a meeting for the express purpose of objecting to
the transaction of any activity on the ground that the meeting has not been
lawfully called or convened. Unless provided otherwise in this Declaration, any
action of the Administrative Trustees may be taken at a meeting by vote of a
majority of the Administrative Trustees present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Administrative Trustees. In the event there is only one Administrative Trustee,
any and all action of such Administrative Trustee shall be evidenced by a
written consent of such Administrative Trustee.
SECTION 5.11 Delegation of Power.
-------------------
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to delegate from time
to time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Administrative Trustees or otherwise as the Administrative
Trustees may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any Person into which the Property Trustee or the Delaware Trustee or any
Administrative Trustee that is not a natural person, as the case may be, may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Property
Trustee or the Delaware Trustee or the Administrative Trustees, as the case may
be, shall be a party, or any Person succeeding to all or substantially all the
corporate trust business of the Property Trustee or the Delaware Trustee or the
Administrative Trustees, as the case may be, shall be the successor of the
Property Trustee or the Delaware Trustee or the Administrative Trustees, as the
case may be, hereunder, provided such Person 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.
-31-
<PAGE>
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
-------------
Holders shall receive Distributions in accordance with the applicable
terms of the relevant Holder's Securities. If and to the extent that the
Debenture Issuer makes a payment of interest (including Compounded Interest and
Additional Sums), premium and/or principal on the Debentures held by the
Property Trustee with respect to the Debentures held by the Property Trustee
(the amount of any such payment being a "Payment Amount"), the Property Trustee
shall and is directed, to the extent funds are available for that purpose, to
make a distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
---------------------------------------
(a) The Administrative Trustees shall on behalf of the Trust issue one
class of subordinated capital income securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Preferred Securities") and one class of common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Common Securities"). Annex I is
hereby incorporated in and made a part of this Declaration. The Trust shall
issue no securities or other interests in the assets of the Trust other than the
Trust Securities.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable undivided beneficial interests in the assets of Trust.
(d) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
(e) Holders of the Securities shall not have any preemptive or similar
rights.
SECTION 7.2 Execution and Authentication.
----------------------------
(a) The Securities shall be signed on behalf of the Trust by an
Administrative Trustee by manual or facsimile signature. In case any
Administrative Trustee of the Trust who shall have signed any of the Securities
shall cease to be such Administrative Trustee before the Securities so signed
shall be delivered by the Trust, such Securities nevertheless may be delivered
as though
-32-
<PAGE>
the person who signed such Securities had not ceased to be such Administrative
Trustee; and any Securities may be signed on behalf of the Trust by such persons
who, at the actual date of execution of such Security, shall be the
Administrative Trustees of the Trust, although at the date of the execution and
delivery of the Declaration any such person was not such an Administrative
Trustee.
(b) One Administrative Trustee shall sign the Preferred Securities for
the Trust by manual or facsimile signature.
A Preferred Security shall not be valid until authenticated by the
manual or facsimile signature of an authorized signatory of the Property
Trustee. The signature shall be conclusive evidence that the Preferred Security
has been authenticated under this Declaration.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate the Preferred Securities for
original issue. The aggregate number of Preferred Securities outstanding at any
time shall not exceed the number set forth in the Terms in Annex I hereto except
as provided in Section 7.6.
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as
the Property Trustee to deal with the Sponsor or an Affiliate.
SECTION 7.3 Form and Dating.
---------------
The Preferred Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the form of Exhibit A-2, each of which is
hereby incorporated in and expressly made a part of this Declaration.
Certificates representing the Securities may be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by their execution thereof. The
Securities may have letters, CUSIP or other numbers, notations or other marks of
identification or designation and such legends or endorsements required by law,
stock exchange rule, agreements to which the Trust is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Trust). The Trust at the direction of the Sponsor shall furnish any such
legend not contained in Exhibit A-1 to the Property Trustee in writing. Each
Preferred Security shall be dated the date of its authentication. The terms and
provisions of the Securities set forth in Annex I and the forms of Securities
set forth in Exhibits A-1 and A-2 are part of the terms of this Declaration and
to the extent applicable, the Property Trustee and the Sponsor, by their
execution and delivery of this Declaration, expressly agree to such terms and
provisions and to be bound thereby.
(a) Global Securities. Securities offered may be issued in the form
of one or more permanent global Securities in definitive, fully registered form
without distribution coupons with the appropriate global legends set forth in
Exhibit A-1 hereto (the "Global Preferred Securities"), which shall be deposited
on behalf of the purchasers of the Preferred Securities represented thereby with
the Property Trustee, as custodian for the Clearing Agency, and registered
-33-
<PAGE>
in the name of the Clearing Agency or a nominee of the Clearing Agency, duly
executed by the Trust and authenticated by the Property Trustee as hereinafter
provided. The number of Preferred Securities represented by the Global Preferred
Security may from time to time be increased or decreased by adjustments made on
the records of the Property Trustee and the Clearing Agency or its nominee as
hereinafter provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall apply only to
the Global Preferred Securities.
The Trust shall execute and the Property Trustee shall, in accordance
with this Section 7.3, authenticate and make available for delivery initially
one or more Global Preferred Securities that (i) shall be registered in the name
of Cede & Co. or other nominee of such Clearing Agency and (ii) shall be
delivered by the Trustee to such Clearing Agency or pursuant to such Clearing
Agency's written instructions or held by the Property Trustee as custodian for
the Clearing Agency.
Members of, or participants in, the Clearing Agency ("Participants")
shall have no rights under this Declaration with respect to any Global Preferred
Security held on their behalf by the Clearing Agency or by the Property Trustee
as the custodian of the Clearing Agency or under such Global Preferred Security,
and the Clearing Agency may be treated by the Trust, the Property Trustee and
any agent of the Trust or the Property Trustee as the absolute owner of such
Global Preferred Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Trust, the Property Trustee or any
agent of the Trust or the Property Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Clearing Agency or
impair, as between the Clearing Agency and its Participants, the operation of
customary practices of such Clearing Agency governing the exercise of the rights
of a holder of a beneficial interest in any Global Preferred Security.
(c) Definitive Preferred Securities. Except as provided in Section
7.9 or 9.2(d), owners of beneficial interests in a Global Preferred Security
will not be entitled to receive physical delivery of certificated Preferred
Securities ("Definitive Preferred Securities"). Preferred Securities not
represented by a Global Preferred Security may be issued in the form of
individual certificates in definitive, fully registered form without
distribution coupons ("Definitive Preferred Securities").
(d) Authorized Denominations. The Preferred Securities are issuable
only in denominations of $1,000 and any integral multiple thereof.
SECTION 7.4 Registrar and Paying Agent.
--------------------------
The Trust shall maintain in the Borough of Manhattan, The City of New
York, (i) an office or agency where Preferred Securities may be presented for
registration of transfer ("Registrar"), and (ii) an office or agency where
Preferred Securities may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Preferred Securities and of their
transfer. The Trust may appoint the Registrar and the Paying Agent and may
appoint one or more co-registrars, and one or more additional paying agents in
such other locations as it shall determine. The term "Registrar" includes any
additional registrar and "Paying Agent" includes any additional paying
-34-
<PAGE>
agent. The Trust may change any Paying Agent, Registrar or co-registrar without
prior notice to any Holder. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees. The
Trust shall notify the Property Trustee of the name and address of any Agent not
a party to this Declaration. If the Trust fails to appoint or maintain another
entity as Registrar or Paying Agent, the Property Trustee shall act as such. The
Trust or any of its Affiliates may act as Paying Agent or Registrar. The Trust
shall act as Paying Agent, Registrar for the Common Securities.
The Trust initially appoints the Property Trustee's New York Affiliate
as Registrar and Paying Agent for the Preferred Securities.
SECTION 7.5 Paying Agent to Hold Money in Trust.
-----------------------------------
The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of liquidation amounts or Distributions, and will notify the
Property Trustee if there are insufficient funds for such purpose. While any
such insufficiency continues, the Property Trustee may require a Paying Agent to
pay all money held by it to the Property Trustee. The Trust at any time may
require a Paying Agent to pay all money held by it to the Property Trustee and
to account for any money disbursed by it. Upon payment over to the Property
Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust)
shall have no further liability for the money. If the Trust or the Sponsor or
an Affiliate of the Trust or the Sponsor acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent.
SECTION 7.6 Replacement Securities.
----------------------
If a Holder claims that a Security owned by it has been lost,
destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Preferred Securities to the
Property Trustee, the Trust shall issue and the Property Trustee shall, upon
written order of the Trust, authenticate a replacement Security if the Property
Trustee's and the Trust's requirements, as the case may be, are met. An
indemnity bond must be provided by the Holder which, in the judgment of the
Property Trustee, is sufficient to protect the Trustees, the Sponsor, the Trust
or any authenticating agent from any loss which any of them may suffer if a
Security is replaced. The Trust may charge such Holder for its expenses in
replacing a Security. Every replacement Security issued and authenticated in
accordance with this Section 7.6 shall represent an undivided beneficial
interest in the Trust.
SECTION 7.7 Outstanding Preferred Securities.
--------------------------------
The Preferred Securities outstanding at any time are all the Preferred
Securities authenticated by the Property Trustee except for those canceled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding.
-35-
<PAGE>
If a Preferred Security is replaced, paid or purchased pursuant to
Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased Preferred
Security is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with the
terms of this Declaration, they cease to be outstanding and Distributions on
them shall cease to accumulate.
A Preferred Security does not cease to be outstanding because one of
the Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.
SECTION 7.8 Preferred Securities in Treasury.
--------------------------------
In determining whether the Holders of the required amount of
Securities have concurred in any direction, waiver or consent, Preferred
Securities owned by the Trust, the Sponsor or an Affiliate of the Sponsor, as
the case may be, shall be disregarded and deemed not to be outstanding, except
that for the purposes of determining whether the Property Trustee shall be fully
protected in relying on any such direction, waiver or consent, only Securities
which a Responsible Officer of the Property Trustee actually knows are so owned
shall be so disregarded.
SECTION 7.9 Temporary Securities.
--------------------
(a) Until Definitive Preferred Securities are ready for delivery, the
Trust may prepare and, in the case of the Preferred Securities, the Property
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Preferred Securities but may have
variations that the Trust considers appropriate for temporary Securities.
Without unreasonable delay, the Trust shall prepare and, in the case of the
Preferred Securities, the Property Trustee shall authenticate Definitive
Preferred Securities in exchange for temporary Securities.
(b) A Global Preferred Security deposited with the Clearing Agency or
with the Property Trustee as custodian for the Clearing Agency pursuant to
Section 7.3 shall be transferred to the beneficial owners thereof in the form of
Definitive Preferred Securities only if such transfer complies with Section 9.2
and (i) the Clearing Agency notifies the Sponsor that it is unwilling or unable
to continue as Clearing Agency for such Global Preferred Security or if at any
time such Clearing Agency ceases to be a "clearing agency" registered under the
Exchange Act and a clearing agency is not appointed by the Sponsor within 90
days of such notice, (ii) a Default or an Event of Default has occurred and is
continuing or (iii) the Administrative Trustees, on behalf of the Trust at its
sole discretion elects to cause the issuance of Definitive Preferred Securities.
(c) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of Definitive Preferred Securities
pursuant to this Section 7.9 shall be surrendered by the Clearing Agency to the
Property Trustee located in the Borough of Manhattan, The City of New York, to
be so transferred, in whole or from time to time in part, without charge, and
the Property Trustee shall authenticate and make available for delivery, upon
such transfer of each portion of such Global Preferred Security, an equal
aggregate liquidation amount of Securities of authorized denominations in the
form of certificated Preferred Securities. Any portion of a Global
-36-
<PAGE>
Preferred Security transferred pursuant to this Section shall be registered in
such names as the Clearing Agency shall direct.
(d) Subject to the provisions of Section 7.9(c), the Holder of a
Global Preferred Security may grant proxies and otherwise authorize any Person,
including Participants and Persons that may hold interests through Participants,
to take any action which such Holder is entitled to take under this Declaration
or the Securities.
(e) In the event of the occurrence of any of the events specified in
Section 7.9(b), the Administration Trustees on behalf of the Trust will promptly
make available to the Property Trustee a reasonable supply of certificated
Preferred Securities in fully registered form without distribution coupons.
SECTION 7.10 Cancellation.
------------
The Trust at any time may deliver Preferred Securities to the Property
Trustee for cancellation. The Registrar and the Paying Agent shall forward to
the Property Trustee any Preferred Securities surrendered to them for
registration of transfer, redemption, exchange or payment. The Property Trustee
shall promptly cancel all Preferred Securities, surrendered for registration of
transfer, redemption, exchange, payment, replacement or cancellation and shall
dispose of canceled Preferred Securities in accordance with its customary
procedures unless the Trust otherwise directs. The Trust may not issue new
Preferred Securities to replace Preferred Securities that it has paid or that
have been delivered to the Property Trustee for cancellation or that any Holder
has exchanged.
SECTION 7.11 CUSIP Numbers.
-------------
The Trust in issuing the Preferred Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders of Preferred
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Preferred
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 Preferred
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust.
--------------------
(a) The Trust shall automatically dissolve:
(i) upon the bankruptcy of the Sponsor;
-37-
<PAGE>
(ii) upon the filing of a certificate of dissolution or liquidation
or its equivalent with respect to the Sponsor; or the revocation of the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) following the distribution of a Like Amount of the Debentures
to the Holders, provided that, the Property Trustee has received written
notice from the Sponsor directing the Property Trustee to dissolve the
Trust (which direction is optional, and except as otherwise expressly
provided below, within the discretion of the Sponsor) and provided,
further, that such direction and such distribution is conditioned on the
Administrative Trustees' receipt of an opinion of an independent tax
counsel experienced in such matters, which opinion may rely on published
rulings of the Internal Revenue Service, to the effect that the Holders
will not recognize any gain or loss for United States federal income tax
purposes as a result of the dissolution of the Trust and the distribution
of Debentures;
(iv) upon the entry of a decree of judicial dissolution of the Trust
by a court of competent jurisdiction;
(v) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities; or
(vi) the expiration of the term of the Trust provided in Section 3.14.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), after the winding up of the affairs of the Trust
is completed, the Administrative Trustees shall execute and file a certificate
of cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
----------------------
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. To the fullest extent permitted by law, any
transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) The Administrative Trustees shall provide for the registration of
Preferred Securities and of the transfer of Preferred Securities, which will be
effected without charge but only upon payment (with such indemnity as the
Administrative Trustees may require) in respect of any tax or other governmental
charges that may be imposed in relation to it. Upon surrender for
-38-
<PAGE>
registration of transfer of any Preferred Securities, the Administrative
Trustees shall cause one or more new Preferred Securities to be issued in the
name of the designated transferee or transferees. Every Preferred Security
surrendered for registration of transfer shall be accompanied by a written
instrument of transfer in form satisfactory to the Administrative Trustees and
the Registrar duly executed by the Holder or such Holder's attorney duly
authorized in writing. Each Preferred Security surrendered for registration of
transfer shall be canceled by the Property Trustee. A transferee of a Preferred
Security shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Preferred Security. By
acceptance of a Preferred Security, each transferee shall be deemed to have
agreed to be bound by this Declaration.
(c) For so long as the Trust Securities remain outstanding, the
Sponsor will covenant (i) to directly or indirectly maintain 100% direct or
indirect ownership of the Common Securities; provided, however, that any
permitted successor of the Sponsor under the Indenture may succeed to the
Sponsor's ownership of such Common Securities, (ii) to use its reasonable
efforts to cause the Trust (x) to remain a business trust, except in connection
with the distribution of Debentures to the Holders of Trust Securities in
dissolution and liquidation of the Trust, the redemption of all of the Trust
Securities, or certain mergers, conversions, consolidations or amalgamations,
each as permitted by this Declaration, and (y) to otherwise continue to be
classified as a grantor trust for United States federal income tax purposes and
(iii) to use its reasonable efforts to cause each Holder of Trust Securities to
be treated as owning an undivided beneficial interest in the Debentures.
SECTION 9.2 Transfer Procedures and Restrictions.
------------------------------------
(a) Transfer and Exchange of Definitive Preferred Securities. When
Definitive Preferred Securities are presented to the Registrar or co-Registrar.
(x) to register the transfer of such Definitive Preferred Securities;
or
(y) to exchange such Definitive Preferred Securities which became
mutilated, destroyed, defaced, stolen or lost, for an equal number of
Definitive Preferred Securities,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Preferred Securities surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to the
Administrative Trustees and the Registrar or co-registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
(b) Restrictions on Transfer of a Definitive Preferred Security for a
Beneficial Interest in a Global Preferred Security. A Definitive Preferred
Security may not be exchanged for a beneficial interest in a Global Preferred
Security except upon satisfaction of the requirements set forth below. Upon
receipt by the Property Trustee of a Definitive Preferred Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Property Trustee and the Administrative Trustees, together
with written instructions directing the Property Trustee to make, or to direct
the Clearing Agency to make, an adjustment on its books and records with respect
-39-
<PAGE>
to the appropriate Global Preferred Security to reflect an increase in the
number of the Preferred Securities represented by such Global Preferred
Security, then the Property Trustee shall cancel such Definitive Preferred
Security and cause, or direct the Clearing Agency to cause, the aggregate number
of Preferred Securities represented by the appropriate Global Preferred Security
to be increased accordingly. If no Global Preferred Securities are then
outstanding, the Trust shall issue and the Property Trustee shall authenticate,
upon written order of any Administrative Trustee, an appropriate number of
Preferred Securities in global form.
(c) Transfer and Exchange of Global Preferred Securities. Subject to
Section 9.2(d), the transfer and exchange of Global Preferred Securities or
beneficial interests therein shall be effected through the Clearing Agency, in
accordance with this Declaration (including applicable restrictions on transfer
set forth herein, if any) and the procedures of the Clearing Agency therefor.
(d) Transfer of a Beneficial Interest in a Global Preferred Security
for a Definitive Preferred Security.
(i) Any Person having a beneficial interest in a Global Preferred
Security may upon request, but only upon 20 days' prior notice to the
Property Trustee, and if accompanied by the information specified below,
exchange such beneficial interest for a Definitive Preferred Security
representing the same number of Preferred Securities. Upon receipt by the
Property Trustee from the Clearing Agency or its nominee on behalf of any
Person having a beneficial interest in a Global Preferred Security of
written instructions or such other form of instructions as is customary for
the Clearing Agency or the Person designated by the Clearing Agency as
having such a beneficial interest in a Global Preferred Security, which may
be submitted by facsimile, then the Property Trustee will cause the
aggregate number of Preferred Securities represented by Global Preferred
Securities to be reduced on its books and records and, following such
reduction, the Trust will execute and the Property Trustee will
authenticate and make available for delivery to the transferee a Definitive
Preferred Security.
(ii) Definitive Preferred Securities issued in exchange for a
beneficial interest in a Global Preferred Security pursuant to this Section
9.2(d) shall be registered in such names and in such authorized
denominations as the Clearing Agency, pursuant to instructions from its
Clearing Agency Participants or otherwise, shall instruct the Property
Trustee in writing. The Property Trustee shall deliver such Preferred
Securities to the Persons in whose names such Preferred Securities are so
registered in accordance with such instructions of the Clearing Agency.
(e) Restrictions on Transfer and Exchange of Global Preferred
Securities. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in subsection (f) of this Section 9.2 and subsection
(b) of Section 7.9), a Global Preferred Security may not be transferred as a
whole except by the Clearing Agency to a nominee of the Clearing Agency or
another nominee of the Clearing Agency or by the Clearing Agency or any such
nominee to a successor Clearing Agency or a nominee of such successor Clearing
Agency.
(f) Authentication of Definitive Preferred Securities. If at any
time:
-40-
<PAGE>
(i) there occurs a Default or an Event of Default which is continuing,
or
(ii) the Trust, in its sole discretion, notifies the Property Trustee
in writing that it elects to cause the issuance of Definitive Preferred
Securities under this Declaration,
then an Administrative Trustee on behalf of the Trust will execute, and the
Property Trustee, upon receipt of a written order of the Trust signed by one
Administrative Trustee requesting the authentication and delivery of Definitive
Preferred Securities to the Persons designated by the Trust, will authenticate
and make available for delivery Definitive Preferred Securities, equal in number
to the number of Preferred Securities represented by the Global Preferred
Securities, in exchange for such Global Preferred Securities.
(g) Legend. Each Preferred Security certificate evidencing the Global
Preferred Securities and the Definitive Preferred Securities (and all Preferred
Securities issued in exchange therefor or substitution thereof) also shall bear
a legend in substantially the following form:
THE PREFERRED SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100
PREFERRED SECURITIES). ANY SUCH TRANSFER OF PREFERRED SECURITIES IN A
BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH PREFERRED
SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT
OF DISTRIBUTIONS OF SUCH PREFERRED SECURITIES, AND SUCH TRANSFEREE
SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH PREFERRED
SECURITIES.
(h) Cancellation or Adjustment of Global Preferred Security. At such
time as all beneficial interests in a Global Preferred Security have either been
exchanged for Definitive Preferred Securities to the extent permitted by this
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Preferred Security shall be canceled by the
Property Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Preferred Security is exchanged for Definitive Preferred
Securities, Preferred Securities represented by such Global Preferred Security
shall be reduced and an adjustment shall be made on the books and records of the
Clearing Agency and the Registrar, to reflect such reduction.
(i) Obligations with Respect to Transfers and Exchanges of Preferred
Securities.
(i) To permit registrations of transfers and exchanges, an
Administrative Trustee on behalf of the Trust shall execute and the
Property Trustee shall authenticate Definitive Preferred Securities and
Global Preferred Securities at the Registrar's or co-registrar's request in
accordance with the terms of this Declaration.
-41-
<PAGE>
(ii) Registrations of transfers or exchanges will be effected without
charge, but only upon payment (with such indemnity as the Trust or the
Sponsor may require) in respect of any tax or other governmental charge
that may be imposed in relation to it.
(iii) The Registrar or co-registrar shall not be required to register
the transfer of or exchange of (a) Preferred Securities during a period
beginning at the opening of business 15 days before the day of mailing of a
notice of redemption or any notice of selection of Preferred Securities for
redemption and ending at the close of business on the day of such mailing;
or (b) any Preferred Security so selected for redemption in whole or in
part, except the unredeemed portion of any Preferred Security being
redeemed in part.
(iv) Prior to the due presentation for registration of transfer of
any Preferred Security, the Trust, the Property Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the Person in whose
name a Preferred Security is registered as the absolute owner of such
Preferred Security for the purpose of receiving Distributions on such
Preferred Security (subject to Section 2(c) of Annex I) and for all other
purposes whatsoever, and none of the Trust, the Property Trustee, the
Paying Agent, the Registrar or any co-registrar shall be affected by notice
to the contrary.
(v) All Preferred Securities issued upon any registration of transfer
or exchange pursuant to the terms of this Declaration shall evidence the
same security and shall be entitled to the same benefits under this
Declaration as the Preferred Securities surrendered upon such registration
of transfer or exchange.
(j) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Preferred Security, a Participant in the
Clearing Agency or other Person with respect to the accuracy of the records
of the Clearing Agency or its nominee or of any Clearing Agency Participant
thereof, with respect to any ownership interest in the Preferred Securities
or with respect to the delivery to any Clearing Agency Participant,
beneficial owner or other Person (other than the Clearing Agency) of any
notice (including any notice of redemption) or the payment of any amount,
under or with respect to such Preferred Securities. All notices and
communications to be given to the Holders and all payments to be made to
Holders under the Preferred Securities shall be given or made only to or
upon the order of the registered Holders (which shall be the Clearing
Agency or its nominee in the case of a Global Preferred Security). The
rights of beneficial owners in any Global Preferred Security shall be
exercised only through the Clearing Agency subject to the applicable rules
and procedures of the Clearing Agency. The Property Trustee may
conclusively rely and shall be fully protected in relying upon information
furnished by the Clearing Agency or any agent thereof with respect to its
Clearing Agency Participants and any beneficial owners.
(ii) The Property Trustee and the Registrar shall have no obligation
or duty to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Declaration or under applicable
law with respect to any transfer of any interest in
-42-
<PAGE>
any Preferred Security (including any transfers between or among Clearing
Agency Participants or beneficial owners in any Global Preferred Security)
other than to require delivery of such certificates and other documentation
or evidence as are expressly required by, and to do so if and when
expressly required by, the terms of this Declaration, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.
(k) Minimum Transfers. Preferred Securities may only be transferred
in minimum blocks of $100,000 aggregate liquidation amount. Any transfer of
Preferred Securities in a block having an aggregate liquidation amount of less
than $100,000 shall be deemed to be void and of no legal effect whatsoever. Any
such transferee shall be deemed not to be a Holder of such Preferred Securities
for any purpose, including, but not limited to, the receipt of Distributions on
such Preferred Securities, and such transferee shall be deemed to have no
interest whatsoever in such Preferred Securities.
SECTION 9.3 Deemed Security Holders.
-----------------------
The Trustees may treat the Person in whose name any Security shall be
registered on the books and records of the Trust as the sole owner of such
Security for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Security on the part of any Person, whether
or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
--------------------
Global Preferred Securities shall initially be registered on the books
and records of the Trust in the name of Cede & Co., the nominee of the Clearing
Agency, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Preferred Securities, except as provided in
Section 9.2 and Section 7.9. Unless and until definitive, fully registered
Preferred Securities certificates have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.2 and Section 7.9:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Preferred Securities and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall have no
obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and
-43-
<PAGE>
agreements between such Preferred Security Beneficial Owners and the
Clearing Agency and/or the Clearing Agency Participants and the Clearing
Agency receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants, provided, that solely
for the purposes of determining whether the Holders of the requisite amount
of Preferred Securities have voted on any matter provided for in this
Declaration, so long as Definitive Preferred Security certificates have not
been issued, the Trustees may conclusively rely on, and shall be protected
in relying on, any written instrument (including a proxy) delivered to the
Trustees by the Clearing Agency setting forth the Preferred Security
Beneficial Owners' votes or assigning the right to vote on any matter to
any other Persons either in whole or in part. DTC will make book entry
transfers among the Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
--------------------------
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, the Trustees shall give all such
notices and communications specified herein to be given to the Holders of Global
Preferred Securities to the Clearing Agency, and shall have no notice
obligations to the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
----------------------------------------
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the
Administrative Trustees may, in their sole discretion, appoint a successor
Clearing Agency with respect to such Preferred Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
---------
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders which shall be made
solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder any deficit upon
dissolution or termination of the Trust or otherwise.
(b) The Debenture Issuer shall be liable for all of the debts and
obligations of the Trust (other than in respect of the payment of principal,
interest and premium, if any, on the Securities) to the extent not satisfied out
of the Trust's assets.
-44-
<PAGE>
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders
shall be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders might properly be paid.
SECTION 10.3 Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Person and any Indemnified Person; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Trust or
any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests,
-45-
<PAGE>
any customary or accepted industry practices, and any applicable generally
accepted accounting practices or principles. In the absence of bad faith by the
Indemnified Person, the resolution, action or term so made, taken or provided by
the Indemnified Person shall not constitute a breach of this Declaration or any
other agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration.
SECTION 10.4 Indemnification.
---------------
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees and expenses), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees and expenses) actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust and
except that no such indemnification shall be made in respect of any claim,
issue or matter as to which such Company Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the extent that the
Court of Chancery of
-46-
<PAGE>
Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such Person is fairly and
reasonably entitled to indemnity for such expenses which such Court of
Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Administrative Trustees by a majority vote of a Quorum consisting of
such Administrative Trustees who were not parties to such action, suit or
proceeding, (2) if such a Quorum is not obtainable, or, even if obtainable,
if a Quorum of disinterested Administrative Trustees so directs, by
independent legal counsel in a written opinion, or (3) by the Common
Security Holder of the Trust.
(v) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall, to the fullest extent permitted by
law, be paid by the Debenture Issuer in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such Company Indemnified Person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Debenture Issuer as authorized in this Section 10.4(a). Notwithstanding
the foregoing, no advance shall be made by the Debenture Issuer if a
determination is reasonably and promptly made (i) by the Administrative
Trustees by a majority vote of a Quorum of disinterested Administrative
Trustees, (ii) if such a Quorum is not obtainable, or, even if obtainable,
if a Quorum of disinterested Administrative Trustees so directs, by
independent legal counsel in a written opinion or (iii) the Common Security
Holder of the Trust, that, based upon the facts known to the Administrative
Trustees, counsel or the Common Security Holder at the time such
determination is made, such Company Indemnified Person acted in bad faith
or in a manner that such Person did not believe to be in or not opposed to
the best interests of the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or had reasonable
cause to believe his conduct was unlawful. In no event shall any advance
be made in instances where the Administrative Trustees, independent legal
counsel or Common Security Holder reasonably determine that such Person
deliberately breached his duty to the Trust or its Common or Preferred
Security Holders.
-47-
<PAGE>
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debenture
Issuer or Preferred Security Holders of the Trust or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office. All rights to indemnification under this Section
10.4(a) shall be deemed to be provided by a contract between the Debenture
Issuer and each Company Indemnified Person who serves in such capacity at
any time while this Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect any rights or
obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any Person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.4(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee or the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee or the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense including taxes (other than taxes based on the income
of such Fiduciary Indemnified Person) incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The provisions of this
Section 10.4(b) shall survive the resignation or removal of the Property Trustee
or the Delaware Trustee and the satisfaction and discharge of this Declaration.
-48-
<PAGE>
(c) The Debenture Trustee agrees to pay the Property Trustee and the
Delaware Trustee, from time to time, such compensation for all services rendered
by the Property Trustee and the Delaware Trustee hereunder as may be mutually
agreed upon in writing by the Sponsor and the Property Trustee or the Delaware
Trustee, as the case may be, and, except as otherwise expressly provided herein,
to reimburse the Property Trustee and the Delaware Trustee upon its or their
request for all reasonable expenses, disbursements and advances incurred or made
by the Property Trustee or the Delaware Trustee, as the case may be, in
accordance with the provisions of this Declaration, except any such expense,
disbursement or advance as may be attributable to its or their negligence or bad
faith.
SECTION 10.5 Outside Businesses.
------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee (subject to Section 5.3(c)) may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the
Delaware Trustee, or the Property Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Covered Person, the Delaware Trustee and the Property
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.
SECTION 10.6 Compensation; Fees.
------------------
The Debenture Issuer agrees:
(a) to pay to the Trustees from time to time such compensation for all
services rendered by them hereunder as the parties shall agree in writing from
time to time (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); and
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this
Declaration (including the reasonable compensation and the expenses and
disbursements of their respective agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith.
The provisions of this Section 10.6 shall survive the dissolution of
the Trust and the termination of this Declaration and the removal or resignation
of any Trustee.
-49-
<PAGE>
No Trustee may claim any lien or charge on any property of the Trust
as a result of any amount due pursuant to this Section 10.6.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the Administrative
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The books of account and the records of the Trust shall
be examined by and reported upon as of the end of each Fiscal Year of the Trust
by a firm of independent certified public accountants selected by the
Administrative Trustees.
(b) The Administrative Trustees shall cause to be duly prepared and
delivered to each of the Holders, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Administrative Trustees shall endeavor to
deliver all such information statements within 30 days after the end of each
Fiscal Year of the Trust.
(c) The Administrative Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Administrative Trustees on behalf of the Trust with any state or
local taxing authority.
SECTION 11.3 Banking.
-------
The Trust may maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the Property Trustee Account. The sole signatories for such accounts shall
be designated by the Administrative Trustees; provided, however, that the
Property Trustee shall designate the signatories for the Property Trustee
Account.
-50-
<PAGE>
SECTION 11.4 Withholding.
-----------
The Trust and the Administrative Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Administrative Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to Distributions or allocations to any Holder, the amount withheld shall
be deemed to be a Distribution in the amount of the withholding to the Holder.
In the event of any claimed over withholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
----------
(a) Except as otherwise provided in this Declaration (including
Section 7 of the Annex I hereto) or by any applicable terms of the Securities,
this Declaration may only be amended by a written instrument approved and
executed by the Administrative Trustees (or if there are more than two
Administrative Trustees a majority of the Administrative Trustees); and
(i) if the amendment affects the rights, powers, duties, obligations
or immunities of the Property Trustee, also by the Property Trustee; and
(ii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Delaware Trustee, also by the Delaware Trustee.
(b) No amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an Opinion of Counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this
-51-
<PAGE>
Declaration (including the terms of the Securities) and that all
conditions precedent, if any, in this Declaration to the execution and
delivery of such amendment have been satisfied,
provided, however, that the Property Trustee shall not be required to sign any
such amendment which affects the rights, powers, duties, obligations or
immunities of the Property Trustee; and
(ii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) At such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder may be effected only with such additional requirements
as may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders;
(e) Article Four shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities;
(f) The rights of the Holders of the Common Securities under Article
Five to increase or decrease the number of, and appoint and remove Trustees
shall not be amended without the consent of the Holders of a Majority in
liquidation amount of the Common Securities; and
(g) Notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders to:
(i) cure any ambiguity, correct or supplement any provision in this
Declaration that may be inconsistent with any other provision of this
Declaration or to make any other provisions with respect to matters or
questions arising under this Declaration which shall not be inconsistent
with the other provisions of the Declaration;
(ii) to modify, eliminate or add to any provisions of the Declaration
to such extent as shall be necessary to ensure that the Trust will be
classified for United States federal income tax purposes as a grantor trust
at all times that any Securities are outstanding or to ensure that the
Trust will not be required to register as an Investment Company under the
Investment Company Act; and
-52-
<PAGE>
(iii) pursuant to Section 5.7 hereof, to evidence the acceptance of
the appointment of a successor Trustee or to fill a vacancy created by an
increase in the number of Administrative Trustees;
provided, however, that in each case such action shall not adversely affect in
any material respect the interests of the Holders, and any such amendments of
this Declaration shall become effective when notice thereof is given to the
Holders.
SECTION 12.2 Meetings of the Holders; Action by Written Consent.
--------------------------------------------------
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Administrative Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Administrative Trustees
shall call a meeting of the Holders of such class if directed to do so by the
Holders of at least 10% in liquidation amount of such class of Securities. Such
direction shall be given by delivering to the Administrative Trustees one or
more notices in writing stating that the signing Holders wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders calling a meeting shall specify in writing the Security
Certificates held by the Holders exercising the right to call a meeting and only
those Securities specified shall be counted for purposes of determining whether
the required percentage set forth in the second sentence of this paragraph has
been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders:
(i) notice of any such meeting shall be given to all the Holders
having a right to vote thereat at least seven days and not more than 60
days before the date of such meeting. Whenever a vote, consent or approval
of the Holders is permitted or required under this Declaration or the rules
of any stock exchange on which the Preferred Securities are listed or
admitted for trading, such vote, consent or approval may be given at a
meeting of the Holders. Any action that may be taken at a meeting of the
Holders may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by the Holders owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders having a
right to vote thereon were present and voting. Prompt notice of the taking
of action without a meeting shall be given to the Holders entitled to vote
who have not consented in writing. The Administrative Trustees may specify
that any written ballot submitted to the Security Holder for the purpose of
taking any action without a meeting shall be returned to the Trust within
the time specified by the Administrative Trustees;
(ii) each Holder may authorize any Person to act for it by proxy on
all matters in which a Holder is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting. No proxy
shall be valid after the expiration of 11 months from the date thereof
unless otherwise provided in the proxy. Every proxy shall be revocable at
the pleasure of the Holder executing it. Except as otherwise provided
herein,
-53-
<PAGE>
all matters relating to the giving, voting or validity of proxies shall be
governed by the General Corporation Law of the State of Delaware relating
to proxies, and judicial interpretations thereunder, as if the Trust were a
Delaware corporation and the Holders were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders shall be conducted by the
Administrative Trustees or by such other Person that the Administrative
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Administrative Trustees, in their sole discretion,
shall establish all other provisions relating to meetings of Holders,
including notice of the time, place or purpose of any meeting at which any
matter is to be voted on by any Holders, waiver of any such notice, action
by consent without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with respect
to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
--------------------------------------------------
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a Delaware banking corporation, a national
banking association or a bank or trust company organized under the laws of any
State of the United States or the District of Columbia, in any case with trust
powers and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration;
(b) The execution, delivery and performance by the Property Trustee of
this Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. This Declaration has been duly executed and
delivered by the Property Trustee and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) The execution, delivery and performance of this Declaration by the
Property Trustee does not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee;
-54-
<PAGE>
(d) No consent, approval or authorization of, or registration with or
notice to, any applicable state or federal banking authority is required for the
execution, delivery or performance by the Property Trustee of this Declaration;
and
(e) The Property Trustee satisfies the requirements set forth in
Section 5.3(a).
SECTION 13.2 Representations and Warranties of Delaware Trustee.
--------------------------------------------------
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is duly organized, validly existing and in
good standing under the laws of the State of Delaware, with corporate power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, this Declaration;
(b) The execution, delivery and performance by the Delaware Trustee of
this Declaration has been duly authorized by all necessary corporate action on
the part of the Delaware Trustee. This Declaration has been duly executed and
delivered by the Delaware Trustee and constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) No consent, approval or authorization of, or registration with or
notice to, any federal banking authority is required for the execution, delivery
or performance by the Delaware Trustee of this Declaration; and
(d) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware and is a Person that satisfies for
the Trust section 3807(a) of the Business Trust Act.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
-------
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, overnight courier service or confirmed telecopy, as
follows:
-55-
<PAGE>
(a) if given to the Trust, in care of the Administrative Trustees at
the Trust's mailing address set forth below (or such other address as the Trust
may give notice of to the Property Trustee, the Delaware Trustee and the
Holders):
Dynegy Capital Trust II
c/o Dynegy Inc.
1000 Louisiana, Suite 5800
Houston, Texas 77002
Attention: ______________
Telecopy: (713) 767-8322
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of to the
Holders):
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
Attention: Michael J. Majchrzak
(c) if given to the Property Trustee, at the Property Trustee's
mailing address set forth below (or such other address as the Property Trustee
may give notice of to the Holders):
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services Division
Telecopy: (312) 407-1708
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Property Trustee and the Trust):
Dynegy Inc.
1000 Louisiana
Houston, Texas 77002
Attention: Kenneth E. Randolph
Telecopy: (713) 507-6808
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a
-56-
<PAGE>
notice or other document is refused delivery or cannot be delivered because of a
changed address of which no notice was given, such notice or other document
shall be deemed to have been delivered on the date of such refusal or inability
to deliver.
SECTION 14.2 GOVERNING LAW.
-------------
THIS DECLARATION AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THE HOLDERS OF THE SECURITIES SHALL BE GOVERNED BY AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
SECTION 14.3 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
--------
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 Successors and Assigns.
----------------------
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
----------------------
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
------------
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
-57-
<PAGE>
SECTION 14.8 No Recourse.
-----------
The Trust's obligations hereunder are intended to be the obligations of the
Trust and no recourse for the payment of Distributions (including Additional
Distributions, if applicable) on, and the Redemption Price of, Securities, as
applicable, or for any claim upon the Securities or otherwise in respect
thereof, shall be had against any Holder of Preferred Securities or any
Affiliate of a Holder of Preferred Securities, solely by reason of such Person
being a Holder of Preferred Securities or an Affiliate of a Holder of Preferred
Securities, it being understood that the Holders of Preferred Securities, solely
by reason of being a Holder of Preferred Securities, have limited liability (in
accordance with the provisions of the Business Trust Act) for the liabilities
and obligations of the Trust. Nothing contained in this Section 14.8 shall be
construed to limit the exercise or enforcement, in accordance with the terms of
this Declaration, the Preferred Securities Guarantee, the Common Securities
Guarantee and the Indenture, of rights and remedies against the Trust or the
Sponsor.
-58-
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
---------------------------------------------
_____________, as Administrative Trustee
---------------------------------------------
_____________, as Administrative Trustee
---------------------------------------------
_____________, as Administrative Trustee
FIRST CHICAGO DELAWARE INC.
as Delaware Trustee
By:
---------------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
as Property Trustee
By:
------------------------------------------
Name:
Title:
DYNEGY INC.
as Sponsor and Debenture Issuer
By:
------------------------------------------
Name:
Title:
-59-
<PAGE>
ANNEX I
TERMS OF
____% PREFERRED SECURITIES
____% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of ________, ___ (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Securities are set out below (each
capitalized term used but not defined herein has the meaning set forth in the
Declaration or, if not defined in such Declaration, as defined in the Prospectus
referred to below in Section 2(c) of this Annex I):
1. Designation and Number.
----------------------
(a) Preferred Securities. _______ Preferred Securities of the Trust
and with an aggregate liquidation amount at any time outstanding with respect to
the assets of the Trust of _________ dollars ($________), and each with a
liquidation amount with respect to the assets of the Trust of $1,000 per
security, are hereby designated for the purposes of identification only as
________ (the "Preferred Securities"). The certificates evidencing the
Preferred Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any exchange or quotation system on or in which the Preferred Securities are
listed, traded or quoted.
(b) Common Securities. ______ Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of ________
dollars ($_______) and a liquidation amount with respect to the assets of the
Trust of $1,000 per security, are hereby designated for the purposes of
identification only as "________" (the "Common Securities"). The certificates
evidencing the Common Securities shall be substantially in the form of Exhibit
A-2 to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a rate per
annum of _____% (the "Coupon Rate") of the liquidation amount of $1,000 per
Security (the "Liquidation Amount"), such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one semiannual period will bear additional distributions
thereon compounded semiannually at the Coupon Rate (to the extent permitted by
applicable law). A Distribution is payable only to the extent that payments are
made in respect of the Debentures held by the Property Trustee and to the extent
the Property Trustee has funds on hand legally available therefor.
-1-
<PAGE>
(b) Distributions on the Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or
duly provided for or, if no Distributions have been paid or duly provided for,
from ________, ___, and will be payable semiannually in arrears on ______ and
______ of each year, commencing on ______, ___ (each, a "Distribution Date"),
except as otherwise described below. Distributions will be computed on the
basis of a 360-day year consisting of twelve 30-day months and, for any period
less than a full calendar month, on the basis of the actual number of days
elapsed in such month. As long as no Event of Default has occurred and is
continuing under the Indenture, the Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period
at any time and from time to time on the Debentures for a period not exceeding
10 consecutive semiannual periods, including the first such semiannual period
during such period (each an "Extension Period"), during which Extension Period
no interest shall be due and payable on the Debentures, provided that no
Extension Period shall end on a date other than an Interest Payment Date for the
Debentures or extend beyond the Maturity Date of the Debentures. As a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, Distributions will continue to accumulate with additional
Distributions thereon (to the extent permitted by applicable law but not at a
rate greater than the rate at which interest is then accruing on the Debentures)
at the Coupon Rate compounded semiannually during any such Extension Period.
Prior to the termination of any such Extension Period, the Debenture Issuer may
further defer payments of interest by further extending such Extension Period;
provided that such Extension Period, together with all such previous and further
extensions within such Extension Period, may not exceed 10 consecutive
semiannual periods, including the first semiannual period during such Extension
Period, end on a date other than an Interest Payment Date or extend beyond the
Maturity Date of the Debentures. Payments of accumulated Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the termination
of any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the close of
business on the ___ day of the month preceding the month in which the relevant
Distribution Date occurs, which Distribution Dates correspond to the interest
payment dates on the Debentures. Subject to any applicable laws and regulations
and the provisions of the Declaration, each such payment in respect of the
Global Preferred Securities will be made as described under the heading
"Description of Preferred Securities -- Form, Denomination, Book-Entry
Procedures and Transfer" in the Prospectus dated ______, __, of the Debenture
Issuer and the Trust relating to the Securities and the Debentures. Payments in
respect of Preferred Securities held in certificated form will be made by check
mailed to the Holder entitled thereto. The relevant record dates for the Common
Securities shall be the same as the record dates for the Preferred Securities.
Distributions payable on any Securities that are not punctually paid on any
Distribution Date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, will cease to be payable to the Holder on the
relevant record date, and such defaulted Distribution will instead be payable to
the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with the Indenture. If
any date on which Distributions are payable on the Securities is not a Business
Day, then payment of the Distribution payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except
-2-
<PAGE>
that if such next succeeding Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day with
the same force and effect as if made on the date such payment was originally
payable.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any dissolution of the Trust or the Sponsor otherwise
gives notice of its election to dissolve the Trust pursuant to Section
8.1(a)(iii) of the Declaration, the Trust shall be liquidated by the
Administrative Trustees as expeditiously as the Administrative Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the Holders a Like
Amount (as defined below) of the Debentures, unless such distribution is
determined by the Property Trustee not to be practicable, in which event such
Holders will be entitled to receive Pro Rata out of the assets of the Trust
legally available for distribution to Holders, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, an amount equal to the
aggregate of the liquidation amount of $1,000 per Security plus accumulated and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the
Securities, Securities having a Liquidation Amount equal to the principal amount
of Debentures to be paid in accordance with their terms and (ii) with respect to
a distribution of Debentures upon the liquidation of the Trust, Debentures
having a principal amount equal to the Liquidation Amount of the Securities of
the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets on hand legally
available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by the Trust on the Securities shall be paid on a Pro
Rata basis.
4. Redemption and Distribution.
---------------------------
(a) Upon the repayment of the Debentures in whole or in part, at
maturity or upon early redemption, the proceeds from such repayment shall be
simultaneously applied by the Property Trustee (subject to the Property Trustee
having received written notice no later than 45 days prior to such repayment) to
redeem a Like Amount of the Securities at a redemption price equal to (i) in the
case of the repayment of the Debentures at maturity, the Maturity Redemption
Price (as defined below), (ii) in the case of the optional redemption of the
Debentures upon the occurrence and continuation of a Special Event, the Special
Event Redemption Price (as defined below) and (iii) in the case of the optional
redemption of the Debentures in whole or in part at any time other than upon the
occurrence and continuation of a Special Event, the Optional Redemption Price
(as defined below). The Maturity Redemption Price, the Special Event Redemption
Price and the Optional
-3-
<PAGE>
Redemption Price are referred to collectively as the "Redemption Price". Holders
will be given not less than 30 nor more than 60 days' notice of such redemption.
(b) (i) The "Maturity Redemption Price", with respect to a
redemption of Securities, shall mean an amount equal to the principal of and
accrued and unpaid interest on the Debentures as of the maturity date thereof.
(ii) In the case of an optional redemption, if fewer than all the
outstanding Securities are to be so redeemed, the Securities to be redeemed will
be determined as described in Section 4(f)(ii) below.
The Debenture Issuer shall have the right (subject to the conditions
in the Indenture) to elect to redeem the Debentures in whole at any time or in
part from time to time, upon not less than 30 days' and not more than 60 days'
notice, at a prepayment price (the "Optional Prepayment Price") equal to the
greater of (i) 100% of the principal amount of the Debentures to be so prepaid
plus accrued and unpaid interest thereon (including Additional Sums, if any) to
the date of prepayment and (ii) the sum of the present values of the remaining
scheduled payments of principal of the Debentures to be so prepaid and interest
thereon (including Additional Sums, if any) discounted to the date of
prepayment, on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months), at the Treasury Rate (as defined herein) plus ___ basis points
plus accrued interest thereon to the date of prepayment.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Reference Treasury Dealer as having a maturity comparable to the
remaining term of the Debentures to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Debentures.
"Treasury Rate" means, with respect to any prepayment date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such prepayment date.
"Comparable Treasury Price" means, with respect to any prepayment
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, the average of
the Reference Treasury Dealer Quotations for such prepayment date.
"Reference Treasury Dealer Quotations" means, with respect to the
Reference Treasury Dealer and any prepayment date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by the Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third business day preceding such prepayment date.
-4-
<PAGE>
"Reference Treasury Dealer" means __________ and its successors;
provided however, that if ________ shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the Company
shall substitute therefor another Primary Treasury Dealer.
Upon such a prepayment of the Debentures, the proceeds from such
prepayment shall be applied by the Property Trustee to redeem a Like Amount of
the Securities, upon not less than 30 nor more than 60 days' notice of a date of
redemption to the holders of the Securities at a redemption price which shall be
equal to the Optional Prepayment Price in respect of the Debentures.
(c) If at any time an Investment Company Event or a Tax Event (each as
defined below, and each a "Special Event") occurs, the Debenture Issuer shall
have the right (subject to the conditions set forth in the Indenture) at any
time upon not less than 30 nor more than 60 days' notice, to redeem the
Debentures in whole, but not in part, within the 90 days following the
occurrence of such Special Event (the "90 Day Period"), and, simultaneous with
such redemption, to cause a Like Amount of the Securities to be redeemed by the
Trust at the Special Event Redemption Price on a Pro Rata basis.
"Investment Company Event" means the receipt by the Sponsor and the
Trust of an Opinion of Counsel from counsel experienced in such matters to the
effect that, as a result of the occurrence of a change in law or regulation or a
written change (including any announced prospective change) in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, which amendment or change is effective or which
pronouncement or decision is announced on or after _______, ___, there is more
than an insubstantial risk that the Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), which change or
prospective change becomes effective or would become effective, as the case may
be, on or after the date of the issuance of the Preferred Securities.
"Tax Event" shall occur upon receipt by the Sponsor and the Trust of
an Opinion of Counsel from counsel experienced in such matters to the effect
that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws or any regulations thereunder of the United
States or any political subdivision or taxing authority thereof or therein, or
as a result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after ______,
___, there is more than an insubstantial risk that (i) the Trust is, or will be
within 90 days of the date of such opinion, subject to United States federal
income tax with respect to income received or accrued on the Debentures, (ii)
interest payable by the Debenture Issuer on the Debentures is not, or within 90
days of the date of such opinion, will not be, deductible by the Debenture
Issuer, in whole or in part, for United States federal income tax purposes, or
(iii) the Trust is, or will be within 90 days of the date of such opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
"Special Event Redemption Price" shall mean, with respect to a
redemption of Securities, a price equal to 100% of the principal amount of the
Debentures to be so prepaid plus accrued and unpaid interest thereon (including
Additional Sums, if any) to the date of prepayment.
-5-
<PAGE>
(d) On and from the date fixed by the Administrative Trustees for any
distribution of Debentures and liquidation of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee), as the Holder of the
Preferred Securities, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such distribution
and (iii) any certificates representing Securities not held by the Clearing
Agency or its nominee (or any successor Clearing Agency or its nominee) will be
deemed to represent beneficial interests in a Like Amount of Debentures until
such certificates are presented to the Debenture Issuer or its agent for
transfer or reissue.
(e) The Trust may not redeem fewer than all the outstanding Securities
unless all accumulated and unpaid Distributions have been paid on all Securities
for all semiannual Distribution periods terminating on or before the date of
redemption.
(f) The procedure with respect to redemptions or distributions of
Securities shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder to be redeemed
or exchanged not fewer than 30 nor more than 60 days before the date fixed
for redemption or exchange thereof which, in the case of a redemption, will
be the date fixed for redemption of the Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on which
notices are given pursuant to this Section 4(f)(i), a Redemption/
Distribution Notice shall be deemed to be given on the day such notice is
first mailed by first-class mail, postage prepaid, to Holders. Each
Redemption/Distribution Notice shall be addressed to the Holders at the
address of each such Holder appearing in the books and records of the
Trust. No defect in the Redemption/Distribution Notice or in the mailing
of either thereof with respect to any Holder shall affect the validity of
the redemption or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the particular Securities to be redeemed shall be selected
on a Pro Rata basis (based upon Liquidation Amounts) not more than 60 days
prior to the date fixed for redemption from the outstanding Preferred
Securities not previously called for redemption, provided, however, that
with respect to Holders that would be required to hold less than 100 but
more than zero Securities as a result of such pro rata redemption, the
Trust shall redeem Securities of each such Holder so that after such
redemption such Holder shall hold either 100 Securities or such Holder no
longer holds any Securities and shall use such method (including, without
limitation, by lot) as the Trust shall deem fair and appropriate, provided,
further, that any such proration may be made on the basis of the aggregate
Liquidation Amount of Securities held by each Holder thereof and may be
made by making such adjustments as the Trust deems fair and appropriate in
order that only Securities in denominations of $1,000 or integral multiples
thereof shall be redeemed. In respect of Preferred Securities registered in
the name of and held of record by the Clearing Agency or its nominee (or
any successor Clearing Agency or its nominee) or any nominee, the
distribution of the proceeds of such
-6-
<PAGE>
redemption will be made to the Clearing Agency and disbursed by such
Clearing Agency in accordance with the procedures applied by such agency or
nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, (which notice will be irrevocable), then
(A) with respect to Preferred Securities issued in book-entry form, by
12:00 noon, New York City time, on the redemption date, provided that the
Debenture Issuer has paid the Property Trustee a sufficient amount of cash
in connection with the related redemption or maturity of the Debentures by
10:00 a.m., New York City time, on the maturity date or the date of
redemption, as the case requires, the Property Trustee will deposit
irrevocably with the Clearing Agency or its nominee (or successor Clearing
Agency or its nominee) funds sufficient to pay the applicable Redemption
Price with respect to such Preferred Securities and will give the Clearing
Agency irrevocable instructions and authority to pay the Redemption Price
to the relevant Clearing Agency Participants, and (B) with respect to
Preferred Securities issued in certificated form and Common Securities,
provided that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Property Trustee will pay the relevant
Redemption Price to the Holders by check mailed to the address of the
relevant Holder appearing on the books and records of the Trust on the
redemption date. If a Redemption/Distribution Notice shall have been given
and funds deposited as required, if applicable, then immediately prior to
the close of business on the date of such deposit, or on the redemption
date, as applicable, Distributions will cease to accumulate on the
Securities so called for redemption and all rights of Holders so called for
redemption will cease, except the right of the Holders of such Securities
to receive the Redemption Price, but without interest on such Redemption
Price, and such Securities shall cease to be outstanding.
(iv) Payment of accumulated and unpaid Distributions on the Redemption
Date of the Securities will be subject to the rights of Holders on the
close of business on a regular record date in respect of a Distribution
Date occurring on or prior to such Redemption Date.
Neither the Administrative Trustees nor the Trust shall be required to
register or cause to be registered the transfer of (i) any Securities beginning
on the opening of business 15 days before the day of mailing of a notice of
redemption and ending at the close of business on the day of such mailing or
(ii) any Securities selected for redemption except the unredeemed portion of any
Security being redeemed. If any date fixed for redemption of Securities is not
a Business Day, then payment of the Redemption Price payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
next succeeding Business Day falls in the next calendar year, such payment shall
be made on the immediately preceding Business Day, with the same force and
effect as if made on such date fixed for redemption. If payment of the
Redemption Price in respect of any Securities is improperly withheld or refused
and not paid either by the Property Trustee or by the Sponsor as guarantor
pursuant to the relevant Securities Guarantee, Distributions on such Securities
will continue to accumulate from the original redemption date to the actual date
of payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the Redemption Price.
-7-
<PAGE>
(v) Redemption/Distribution Notices shall be sent by the Property
Trustee on behalf of the Trust to (A) in respect of the Preferred
Securities, the Clearing Agency or its nominee (or any successor Clearing
Agency or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holder
thereof, and (B) in respect of the Common Securities to the Holder thereof.
(vi) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws and banking laws),
provided the acquiror is not the Holder of the Common Securities or the
obligor under the Indenture, the Sponsor or any of its subsidiaries may at
any time and from time to time purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
5. Voting Rights - Preferred Securities.
------------------------------------
(a) Except as provided under Sections 5(b), 6(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 5.07 of
the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a majority in liquidation amount
of all outstanding Preferred Securities; provided, however, that where a consent
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior approval of each Holder of the Preferred Securities. The Trustees
shall not revoke any action previously authorized or approved by a vote of the
Holders of the Preferred Securities except by subsequent vote of such Holders.
Subject to Section 2.7 of the Declaration, the Property Trustee shall notify
each Holder of Preferred Securities of any notice of default with respect to the
Debentures. In addition to obtaining the foregoing approvals of such Holders of
the Preferred Securities, prior to taking any of the foregoing actions, the
Trustees shall obtain an opinion of counsel experienced in such matters to the
effect that the Trust will not be classified as an association taxable as a
corporation for United States federal income tax purposes on account of such
action.
If an Event of Default under the Declaration has occurred and is
continuing, then the Holders of a majority in liquidation amount of Preferred
Securities have the right to direct the exercise of any trust or power conferred
upon the Property Trustee under this Declaration, including the right to direct
the Property Trustee to exercise the remedies available to it as holder of the
Debentures and the Preferred Securities Guarantee. If an Event of Default under
the Declaration has occurred and is continuing and such event is attributable to
the failure of the Debenture Issuer to pay principal of or premium, if any, or
interest on the Debentures on the due date (or in the case of redemption, on the
redemption date), then a Holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such Holder of the principal of or
premium, if any, or interest on a Like Amount of Debentures (a "Direct Action")
on or after the respective due date specified in the
-8-
<PAGE>
Debentures. In connection with such Direct Action, the Common Securities Holder
will be subrogated to the rights of such Holder of Preferred Securities to the
extent of any payment made by the Debenture Issuer to such Holder of Preferred
Securities in such Direct Action. In addition, if the Property Trustee fails to
take legal action for an Event of Default of which the Trustee has knowledge,
the Holders of the Preferred Securities may, to the fullest extent permitted by
law, take such legal action, to the same extent as if such Holders of Preferred
Securities held a Like Amount of Debentures, without first proceeding against
the Property Trustee or the Trust.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote to be
mailed to each Holder of record of Preferred Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 6(b), 6(c), and 7 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) Unless an Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by the holder of the Common Securities.
If an Event of Default has occurred and is continuing, the Property Trustee and
the Delaware Trustee may be removed at such time by the holders of a Majority in
liquidation amount of the outstanding Preferred Securities. In no event will
the Holders of the Preferred Securities have the right to vote to appoint,
remove or replace, or increase or decrease the number of, the Administrative
Trustees, which voting rights are vested exclusively in the Sponsor as the
Holder of the Common Securities. No resignation or removal of a Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
Declaration.
(c) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 5.07 of
the
-9-
<PAGE>
Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a Majority in liquidation amount
of all outstanding Common Securities; provided, however, that where a consent
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior approval of each Holder of the Common Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Common Securities except by subsequent vote of such Holders. Subject to
Section 2.7 of the Declaration, the Property Trustee shall notify each Holder of
Common Securities of any notice of default with respect to the Debentures. In
addition to obtaining the foregoing approvals of such Holders of the Common
Securities, prior to taking any of the foregoing actions, the Trustees shall
obtain an opinion of counsel experienced in such matters to the effect that the
Trust will not be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such action.
If an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or premium, if any, or interest on the Debentures on the due
date (or in the case of redemption, on the redemption date), then a Holder of
Common Securities may institute a Direct Action for enforcement of payment to
such Holder of the principal of or premium, if any, or interest on a Like Amount
of Debentures on or after the respective due date specified in the Debentures.
In connection with such Direct Action, the rights of the Common Securities
Holder will be subordinated to the rights of such Holder of Preferred Securities
to the extent of any payment made by the Debenture Issuer to such Holder of
Common Securities in such Direct Action. Except as provided in the second
preceding sentence, the Holders of Common Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Administrative Trustees will cause a notice of any meeting
at which Holders of Common Securities are entitled to vote to be mailed to each
Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration.
-------------------------
In addition to the requirements set out in Section 12.1 of the
Declaration, the Declaration may be amended from time to time by the Sponsor,
the Property Trustee and the Administrative Trustees, without the consent of the
Holders (i) to cure any ambiguity, correct or
-10-
<PAGE>
supplement any provisions in the Declaration that may be inconsistent with any
other provisions, or to make any other provisions with respect to matters or
questions arising under the Declaration which shall not be inconsistent with the
other provisions of the Declaration, or (ii) to modify, eliminate or add to any
provisions of the Declaration to such extent as shall be necessary to ensure
that the Trust will be classified for United States federal income tax purposes
as a grantor trust at all times that any Securities are outstanding or to ensure
that the Trust will not be required to register as an "Investment Company" under
the Investment Company Act; provided, however, that in each case such action
shall not adversely affect in any material respect the interests of any Holder.
Any amendments of the Declaration pursuant to the immediately preceding sentence
shall become effective when notice thereof is given to the Holders. Under the
circumstances referred to in Section 12.1(c) of the Declaration, the Declaration
also may be amended by the Trustees and the Sponsor with (i) the consent of
Holders representing a Majority in liquidation amount of all outstanding
Securities, and (ii) receipt by the Trustees of an Opinion of Counsel to the
effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust for United States federal income tax purposes or the Trust's
exemption from status as an Investment Company under the Investment Company Act,
provided that, without the consent of each Holder of Trust Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date.
8. Pro Rata.
--------
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding. In any such
proration, the Trust may make such adjustments as may be appropriate in order
that only securities in authorized denominations shall be redeemed (subject to
the minimum block requirements of Section 9.2(k) of the Declaration).
9. Ranking.
-------
The Preferred Securities rank pari passu with the Common Securities
and payment thereon shall be made Pro Rata with the Common Securities, except
that, if an Event of Default under the Declaration occurs and is continuing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall
-11-
<PAGE>
be made until the Holders of the Preferred Securities shall be paid in full the
Distributions, Redemption Price, Liquidation Distribution and other payments to
which they are entitled at such time.
10. Acceptance of Securities Guarantee and Indenture.
------------------------------------------------
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
--------------------
The Holders shall have no preemptive or similar rights to subscribe
for any additional securities.
12. Miscellaneous.
-------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee, the Common Securities Guarantee (as may be appropriate)
and the Indenture (including any supplemental indenture) to a Holder without
charge upon written request to the Sponsor at its principal place of business.
-12-
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY, INSERT:
THIS PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER
OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS
A WHOLE BY THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A
NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE
CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE PREFERRED SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 PREFERRED
SECURITIES). ANY SUCH TRANSFER OF PREFERRED SECURITIES IN A BLOCK HAVING A
LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE
HOLDER OF SUCH PREFERRED SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED
TO THE RECEIPT OF DISTRIBUTIONS OF SUCH PREFERRED SECURITIES, AND SUCH
TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH PREFERRED
SECURITIES.
SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS PREFERRED SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
-1-
<PAGE>
Number of Aggregate Liquidation
Preferred Securities Amount: _____________
___________________ CUSIP NO. ___________
Certificate Evidencing Preferred Securities
of
Dynegy Capital Trust II
___% Preferred Securities
(liquidation amount $1,000 per Preferred Security)
Dynegy Capital Trust II, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of [$_________ in
aggregate liquidation amount of Preferred Securities of the Trust]/1/ [the
aggregate liquidation amount of Preferred Securities of the Trust specified in
Schedule A hereto]/2/ representing undivided beneficial interests in the assets
of the Trust designated the Series __ ___% Preferred Securities (liquidation
amount $1,000 per Preferred Security) (the "Preferred Securities"). Subject to
the Declaration (as defined below), the Preferred Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Preferred Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of ______, __, as the same
may be amended from time to time (the "Declaration"), including the designation
of the terms of the Preferred Securities as set forth in Annex I to the
Declaration. Capitalized terms used but not defined herein shall have the
meaning given them in the Declaration. The Sponsor will provide a copy of the
Declaration, the Preferred Securities Guarantee, the Common Securities Guarantee
(as may be appropriate), and the Indenture (including any supplemental
indenture) to a Holder without charge upon written request to the Trust at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Preferred Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
- ------------------------------
/1/ Insert in Definitive Preferred Securities only.
/2/ Insert in Global Preferred Securities only.
-2-
<PAGE>
IN WITNESS WHEREOF, the Trust has duly executed this certificate.
Dated:
DYNEGY CAPITAL TRUST II
By:
-------------------------------------
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the within-
mentioned Declaration.
The First National Bank of Chicago,
as Property Trustee
By:
-------------------------------------
Authorized Signatory
-3-
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a
rate per annum of ___% (the "Coupon Rate") of the liquidation amount of $1,000
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one semiannual period will bear interest thereon compounded
semiannually at the Coupon Rate (to the extent permitted by applicable law). A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds on hand legally available therefor.
Distributions on the Preferred Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or
duly provided for or, if no Distributions have been paid or duly provided for,
from _____, ___, and will be payable semiannually in arrears, on ____ and _____
of each year, commencing on _____, __, except as otherwise described below.
Distributions will be computed on the basis of a 360-day year consisting of
twelve 30-day months and, for any period less than a full calendar month, on the
basis of the actual number of days elapsed in such month. As long as no Event
of Default has occurred and is continuing under the Indenture, the Debenture
Issuer has the right under the Indenture to defer payments of interest by
extending the interest payment period at any time and from time to time on the
Debentures for a period not exceeding 10 consecutive calendar semiannual
periods, including the first such semiannual period during such period (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures, provided that no Extension Period shall end on a date
other than an Interest Payment Date for the Debentures or extend beyond the
Maturity Date of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, Distributions will
continue to accumulate with additional Distributions thereon (to the extent
permitted by applicable law but not at a rate greater than the rate at which
interest is then accruing on the Debentures) at the Coupon Rate compounded
semiannually during any such Extension Period. Prior to the termination of any
such Extension Period, the Debenture Issuer may further defer payments of
interest by further extending such Extension Period; provided that such
Extension Period, together with all such previous and further extensions within
such Extension Period, may not exceed 10 consecutive semiannual periods,
including the first semiannual period during such Extension Period, end on a
date other than an Interest Payment Date for the Debentures or extend beyond the
Maturity Date of the Debentures. Payments of accumulated Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the termination
of any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
The Property Trustee may, at the direction of the Sponsor, at any time
dissolve the Trust and, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, cause the Debentures to be distributed to
the holders of the Securities in liquidation of the Trust or, simultaneous with
any redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
-4-
<PAGE>
The Preferred Securities shall be redeemable as provided in the
Declaration.
-5-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
___________________________________________________________ agent to transfer
this Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee/***/
/***/ Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities and Exchange Act of 1934, as
amended.
-6-
<PAGE>
Schedule A/*/
The initial number of Preferred Securities evidenced by the Certificate to
which this Schedule is attached is _______ (having an aggregate liquidation
amount of $______). The notations in the following table evidence decreases and
increases in the number of Preferred Securities evidenced by such Certificate.
<TABLE>
<CAPTION>
Number of Preferred
Decrease in Number Increase in Number Securities Remaining
of Preferred of Preferred After Such Decrease Notation
Securities Securities or Increase by Registrar
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
</TABLE>
- --------------------------------
/*/ Append to Global Preferred Securities only.
-7-
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS COMMON SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE COMMON SECURITIES ARE NOT TRANSFERRABLE EXCEPT AS DESCRIBED IN THE
DECLARATION (AS DEFINED BELOW).
A2-1
<PAGE>
Number of Common Securities Aggregate Liquidation
Amount:
- --------------------------- --------------
Certificate Number
CS-
---------------
Certificate Evidencing Common Securities
of
Dynegy Capital Trust II
____% Common Securities
(liquidation amount $1,000 per Common Security)
Dynegy Capital Trust II, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that
______________________ (the "Holder") is the registered owner of __________
common securities of the Trust representing undivided beneficial interests in
the assets of the Trust designated the ____% Common Securities (liquidation
amount $1,000 per Common Security) (the "Common Securities"). Subject to the
limitations in Section 9.1(c) of the Declaration (as defined below), the Common
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of _____, ___, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common Securities
as set forth in Annex I to the Declaration. Capitalized terms used but not
defined herein shall have the meaning given them in the Declaration. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee,
the Preferred Securities Guarantee (as may be appropriate) and the Indenture
(including any supplemental indenture) to a Holder without charge upon written
request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Common Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
A2-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of __________, ____.
Dynegy Capital Trust II
By:
-------------------------------------
Name:
Administrative Trustee
A2-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of ___% (the "Coupon Rate") of the liquidation amount of $1,000 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
semiannual period will bear interest thereon compounded semiannually at the
Coupon Rate (to the extent permitted by applicable law). A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee has funds
available therefor.
Distributions on the Common Securities will be cumulative, will accrue
from the most recent date to which Distributions have been paid or duly provided
for or, if no Distributions have been paid or duly provided for, from ____, ___,
and will be payable semiannually in arrears, on ____ and _____ of each year,
commencing on _____, ___, except as otherwise described below. Distributions
will be computed on the basis of a 360-day year consisting of twelve 30-day
months and, for any period less than a full calendar month, on the basis of the
actual number of days elapsed in such month. As long as no Event of Default has
occurred and is continuing under the Indenture, the Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 10 consecutive calendar semiannual periods, including the
first such semiannual period during such period (each an "Extension Period"),
during which Extension Period no interest shall be due and payable on the
Debentures, provided that no Extension Period shall end on a date other than an
Interest Payment Date for the Debentures or extend beyond the Maturity Date of
the Debentures. As a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, Distributions will continue to accumulate with
additional Distributions thereon (to the extent permitted by applicable law but
not at a rate greater than the rate at which interest is then accruing on the
Debentures) at the Coupon Rate compounded semiannually during any such Extension
Period. Prior to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together with all such
previous and further extensions within such Extension Period, may not exceed 10
consecutive semiannual periods, including the first semiannual period during
such Extension Period, or end on a date other than an Interest Payment Date for
the Debentures or extend beyond the Maturity Date of the Debentures. Payments
of accrued Distributions will be payable to Holders as they appear on the books
and records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
The Property Trustee may, at the direction of the Sponsor, at any time
dissolve the Trust and, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, cause the Debentures to be distributed to
the holders to the Securities in liquidation of the Trust or, simultaneous with
any redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
A2-4
<PAGE>
Under certain circumstances, the right of the holders of the Common
Securities shall be subordinate to the rights of the holders of the Preferred
Securities (as defined in the Declaration), as provided in the Declaration.
The Common Securities shall be redeemable as provided in the
Declaration.
A2-5
<PAGE>
--------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
agent to transfer
- -----------------------------------------------------------
this Common Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date:
------------------------
Signature: ------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-6
<PAGE>
In connection with any transfer of any of the Common Securities evidenced by
this certificate, the undersigned confirms that such Common Securities are
being:
CHECK ONE BOX BELOW
(1) [_] exchanged for the undersigned's own account without transfer; or
(2) [_] transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933, as amended; or
(3) [_] transferred to a non-U.S. person pursuant to an offshore
transaction in compliance with Rule 904 of Regulation S under
the Securities Act of 1933, as amended; or
(4) [_] transferred to an institutional "accredited investor" within the
meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
under the Securities Act of 1933, as amended, that is acquiring
the Common Securities for its own account, or for the account of
such an institutional "accredited investor", for investment
purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities
Act of 1933, as amended; or
(5) [_] transferred pursuant to and in compliance with Rule 144 under
the Securities Act of 1933, as amended;
(6) [_] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933, as
amended; or
(7) [_] transferred pursuant to an effective registration statement,
under the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Registrar will refuse to register any of
the Common Securities evidenced by this certificate in the name of any Person
other than the registered Holder thereof; provided, however, that if box (3),
(4), (5) or (6) is checked, the Registrar may require, prior to registering any
such transfer of the Common Securities, such legal opinions, certifications and
other information as the Trust has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, as
amended; provided, further, that (i) if box (2) is checked, the transferee must
also certify in the form attached hereto that it is a "qualified institutional
buyer" as defined in Rule 144A or (ii) if box (3) or (4) is checked, the
transferee must also provide to the Registrar a Transferee Letter of
Representation in the form attached hereto.
-----------------------------------
Signature
A2-7
<PAGE>
CERTIFICATE OF QUALIFIED INSTITUTIONAL BUYER
The undersigned transferee of Common Securities hereby certifies that (i)
the undersigned is a "qualified institutional buyer" (a "QIB") as defined in
Rule 144A ("Rule 144A") promulgated under the Securities Act of 1933, as amended
(the Securities Act), (ii) the undersigned is aware that the transfer of the
Common Securities to the undersigned is being made in reliance on Rule 144A and
(iii) the undersigned is acquiring the Common Securities for its own account or
for the account of another QIB over which the undersigned exercises its sole
investment discretion.
The undersigned also understands and acknowledges that the Common
Securities have not been registered under the Securities Act or any other
applicable securities law, are being offered for resale in transactions not
requiring registration under the Securities Act and may not be offered, sold,
pledged or otherwise transferred except in compliance with the registration
requirements of the Securities Act or any other applicable securities laws,
pursuant to an exemption therefrom or in a transaction not subject thereto and,
in each case, in compliance with the terms of the Common Securities and the
terms of the Amended and Restated Declaration of Trust of Dynegy Capital Trust
II, dated as of _____, ___, as the same may be amended from time to time.
-----------------------------------
Signature
A2-8
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
A2-9
<PAGE>
EXHIBIT 4.10
================================================================================
DYNEGY INC.
______________________________
______________________________
FORM OF INDENTURE
Dated as of ________________, ____
______________________________
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
______________________________
DEBENTURES
================================================================================
<PAGE>
TIE-SHEET
ACT SECTION INDENTURE SECTION
<TABLE>
<S> <C>
310(a)(1).................................................. 6.09
(a)(2).................................................. 6.09
310(a)(3).................................................. N/A
(a)(4).................................................. N/A
310(a)(5).................................................. 6.09
310(b)..................................................... 6.08, 6.10
310(c)..................................................... N/A
311(a) and (b)............................................. 6.13
311(c)..................................................... 4.01, 4.02(a)
312(a)..................................................... 4.01
312(b) and (c)............................................. 4.02
313(a)..................................................... 4.04
313(b)(1).................................................. 4.04
313(b)(2).................................................. 4.04
313(c)..................................................... 4.04
313(d)..................................................... 4.04
314(a)..................................................... 4.03
314(b)..................................................... N/A
314(c)(1) and (2).......................................... 6.07
314(c)(3).................................................. N/A
314(d)..................................................... N/A
314(e)..................................................... 6.07
314(f)..................................................... N/A
315(a)(c) and (d).......................................... 6.01
315(b)..................................................... 5.08
315(e)..................................................... 5.09
316(a)(1).................................................. 5.07
316(a)(2).................................................. N/A
316(a) last sentence....................................... 7.04
316(b)..................................................... 9.02
317(a)..................................................... 5.05
317(b)..................................................... 6.05
318(a)..................................................... 13.08
- ---------------------------------------
</TABLE>
THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions............................................................................. 1
SECTION 1.02. Business Day Certificate................................................................ 10
SECTION 1.03. Form of Documents Delivered to Trustee.................................................. 10
ARTICLE II
SECURITIES
SECTION 2.01. Forms Generally......................................................................... 11
SECTION 2.02. Execution and Authentication............................................................ 11
SECTION 2.03. Form and Payment........................................................................ 12
SECTION 2.04. Global Security......................................................................... 12
SECTION 2.05. Interest................................................................................ 14
SECTION 2.06. Transfer and Exchange................................................................... 15
SECTION 2.07. Replacement Securities.................................................................. 16
SECTION 2.08. Temporary Securities.................................................................... 16
SECTION 2.09. Cancellation............................................................................ 17
SECTION 2.10. Defaulted Interest...................................................................... 17
SECTION 2.11. CUSIP Numbers........................................................................... 18
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium and Interest.............................................. 18
SECTION 3.02. Offices for Notices and Payments, etc................................................... 18
SECTION 3.03. Appointments to Fill Vacancies in Trustee's Office...................................... 19
SECTION 3.04. Provision as to Paying Agent............................................................ 19
SECTION 3.05. Certificate to Trustee.................................................................. 20
SECTION 3.06. Compliance with Consolidation Provisions................................................ 20
SECTION 3.07. Limitation on Dividends................................................................. 20
SECTION 3.08. Covenants as to Dynegy Capital Trust.................................................... 21
SECTION 3.09. Payment of Trust's Costs and Expenses................................................... 21
SECTION 3.10. Payment Upon Resignation or Removal..................................................... 22
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THECOMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists.................................................................. 23
SECTION 4.02. Preservation and Disclosure of Lists.................................................... 23
SECTION 4.03. Reports by Company...................................................................... 24
SECTION 4.04. Reports by the Trustee.................................................................. 25
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERSON EVENT OF DEFAULT
SECTION 5.01. Events of Default....................................................................... 26
SECTION 5.02. Payment of Securities on Default; Suit Therefor......................................... 28
SECTION 5.03. Application of Moneys Collected by Trustee.............................................. 29
SECTION 5.04. Proceedings by Securityholders.......................................................... 30
SECTION 5.05. Proceedings by Trustee.................................................................. 31
SECTION 5.06. Remedies Cumulative and Continuing...................................................... 31
SECTION 5.07. Direction of Proceedings and Waiver of Defaults by Majority of Securityholders.......... 31
SECTION 5.08. Notice of Defaults...................................................................... 32
SECTION 5.09. Undertaking to Pay Costs................................................................ 33
SECTION 5.10. Waiver of Stay or Extension Laws........................................................ 33
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee.................................................. 33
SECTION 6.02. Reliance on Documents, Opinions, etc.................................................... 34
SECTION 6.03. No Responsibility for Recitals, etc..................................................... 36
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer Agents or
Registrar May Own Securities.......................................................... 36
SECTION 6.05. Moneys to be Held in Trust.............................................................. 36
SECTION 6.06. Compensation and Expenses of Trustee.................................................... 37
SECTION 6.07. Officers' Certificate as Evidence....................................................... 37
SECTION 6.08. Conflicting Interest of Trustee......................................................... 38
SECTION 6.09. Eligibility of Trustee.................................................................. 38
SECTION 6.10. Resignation or Removal of Trustee....................................................... 38
SECTION 6.11. Acceptance by Successor Trustee......................................................... 39
SECTION 6.12. Succession by Merger, etc............................................................... 40
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 6.13. Limitation on Rights of Trustee as a Creditor........................................... 41
SECTION 6.14. Authenticating Agents................................................................... 41
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders............................................................... 42
SECTION 7.02. Proof of Execution by Securityholders................................................... 42
SECTION 7.03. Who Are Deemed Absolute Owners.......................................................... 43
SECTION 7.04. Securities Owned by Company Deemed Not Outstanding...................................... 43
SECTION 7.05. Revocation of Consents; Future Holders Bound............................................ 43
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings.................................................................... 44
SECTION 8.02. Call of Meetings by Trustee............................................................. 44
SECTION 8.03. Call of Meetings by Company or Securityholders.......................................... 45
SECTION 8.04. Qualifications for Voting............................................................... 45
SECTION 8.05. Regulations............................................................................. 45
SECTION 8.06. Voting.................................................................................. 46
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Without Consent of Securityholders...................................................... 46
SECTION 9.02. With Consent of Securityholders......................................................... 48
SECTION 9.03. Compliance with Trust Indenture Act; Effect of Supplemental Indentures.................. 49
SECTION 9.04. Notation on Securities.................................................................. 49
SECTION 9.05. Evidence of Compliance of Supplemental Indenture to be Furnished Trustee................ 49
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., on Certain Terms......................................... 50
SECTION 10.02. Successor Corporation to be Substituted for Company..................................... 50
SECTION 10.03. Opinion of Counsel to be Given Trustee.................................................. 51
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture.................................................................. 51
SECTION 11.02. Deposited Moneys and U.S. Government Obligations to be Held in Trust by Trustee......... 52
SECTION 11.03. Paying Agent to Repay Moneys Held....................................................... 52
SECTION 11.04. Return of Unclaimed Moneys.............................................................. 52
SECTION 11.05. Defeasance Upon Deposit of Moneys or U.S. Government Obligations........................ 52
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Securities Solely Corporate Obligations................................... 54
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors.............................................................................. 54
SECTION 13.02. Official Acts by Successor Corporation.................................................. 54
SECTION 13.03. Surrender of Company Powers............................................................. 55
SECTION 13.04. Addresses for Notices, etc.............................................................. 55
SECTION 13.05. GOVERNING LAW........................................................................... 55
SECTION 13.06. Evidence of Compliance with Conditions Precedent........................................ 55
SECTION 13.07. Business Days........................................................................... 56
SECTION 13.08. Trust Indenture Act to Control.......................................................... 56
SECTION 13.09. Table of Contents, Headings, etc........................................................ 56
SECTION 13.10. Execution in Counterparts............................................................... 56
SECTION 13.11. Separability............................................................................ 56
SECTION 13.12. Assignment.............................................................................. 57
SECTION 13.13. Acknowledgment of Rights................................................................ 57
ARTICLE XIV
REDEMPTION OF SECURITIES
SECTION 14.01. Special Event Redemption................................................................ 57
SECTION 14.02. Optional Redemption by Company.......................................................... 58
SECTION 14.03. No Sinking Fund......................................................................... 58
SECTION 14.04. Notice of Redemption; Selection of Securities........................................... 58
SECTION 14.05. Payment of Securities Called for Redemption............................................. 59
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE XV
SUBORDINATION OF SECURITIES
SECTION 15.01. Agreement to Subordinate................................................................ 60
SECTION 15.02. Default on Senior Indebtedness.......................................................... 60
SECTION 15.03. Liquidation; Dissolution; Bankruptcy.................................................... 61
SECTION 15.04. Subrogation............................................................................. 62
SECTION 15.05. Trustee to Effectuate Subordination..................................................... 63
SECTION 15.06. Notice by the Company................................................................... 63
SECTION 15.07. Rights of the Trustee; Holders of Senior Indebtedness................................... 64
SECTION 15.08. Subordination May Not Be Impaired....................................................... 64
SECTION 15.09. Article Applicable to Paying Agents..................................................... 65
SECTION 15.10. Trust Moneys Not Subordinated........................................................... 65
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 16.01. Extension of Interest Payment Period.................................................... 65
SECTION 16.02. Notice of Extension..................................................................... 66
</TABLE>
Testimonium
Signatures
Acknowledgments
v
<PAGE>
THIS FORM OF INDENTURE, dated as of ______________, ____ between
Dynegy Inc., a Delaware corporation (hereinafter sometimes called the
"Company"), and The First National Bank of Chicago, a Delaware banking
corporation, as trustee (hereinafter sometimes called the "Trustee"),
W I T N E S S E T H :
In consideration of the premises, and the purchase of the Securities
by the holders thereof, the Company covenants and agrees with the Trustee for
the equal and proportionate benefit of the respective holders from time to time
of the Securities, as follows:
ARTICLE I
DEFINITIONS
-----------
SECTION 1.01. Definitions.
The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture shall have the respective meanings specified in this Section
1.01. All other terms used in this Indenture which are defined in the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), or which are by
reference therein defined in the Securities Act, shall (except as herein
otherwise expressly provided or unless the context otherwise requires) have the
meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of this Indenture as originally executed.
The following terms have the meanings given to them in the Declaration: (i)
Clearing Agency; (ii) Delaware Trustee; (iii) Property Trustee; (iv)
Administrative Trustees; (v) Direct Action; and (vi) Distributions. All
accounting terms used herein and not expressly defined shall have the meanings
assigned to such terms in accordance with generally accepted accounting
principles and the term "generally accepted accounting principles" means such
accounting principles as are generally accepted at the time of any computation.
The words "herein", "hereof" and "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision. Headings are used for convenience of reference only and do
not affect interpretation. The singular includes the plural and vice versa.
"Additional Sums" shall have the meaning set forth in Section 2.05(c).
"Affiliate" shall have the meaning given to that term in Rule 405 under the
Securities Act or any successor rule thereunder.
"Authenticating Agent" shall mean any agent or agents of the Trustee which
at the time shall be appointed and acting pursuant to Section 6.14.
<PAGE>
"Bankruptcy Law" shall mean Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.
"Board of Directors" shall mean either the Board of Directors of the
Company or any duly authorized committee of that board.
"Board Resolution" shall mean a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" shall mean, with respect to any series of Securities, any
day other than a Saturday or a Sunday or a day on which banking institutions in
Houston, Texas or Chicago, Illinois are authorized or required by law or
executive order to close.
"Cedel" means Cedel, S.A.
"Commission" shall mean the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Securities" shall mean the common securities of the Trust
representing undivided beneficial interests in the assets of the Trust which
rank pari passu with Preferred Securities issued by the Trust; provided,
however, that if an Event of Default has occurred and is continuing, no payments
in respect of Distributions on, or payments upon liquidation, redemption or
otherwise with respect to, the Common Securities shall be made until the holders
of the Preferred Securities shall be paid in full the Distributions and the
liquidation, redemption and other payments to which they are entitled.
"Common Securities Guarantee" shall mean any guarantee that the Company may
enter into with any Person or Persons that operates directly or indirectly for
the benefit of holders of Common Securities of Dynegy Capital Trust.
"Common Stock" shall mean the Common Stock, par value $.01 per share, of
the Company or any other class of stock resulting from changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value.
"Company" shall mean Dynegy Inc., a Delaware corporation, and, subject to
the provisions of Article X, shall include its successors and assigns.
"Company Request" or "Company Order" shall mean a written request or order
signed in the name of the Company by the Chairman of the Board, the Chief
Executive Officer, the President, a
2
<PAGE>
Vice Chairman of the Board or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Reference Treasury Dealer as having a maturity comparable to the
remaining term of the Securities to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Securities.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, the average of
the Reference Treasury Dealer Quotations for such redemption date.
"Compounded Interest" shall have the meaning set forth in Section 16.01.
"Custodian" shall mean any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
"Declaration" means the Amended and Restated Declaration of Trust of Dynegy
Capital Trust, dated as of ____________, ____, as amended from time to time.
"Default" means any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Defaulted Interest" shall have the same meaning set forth in Section 2.10.
"Deferred Interest" shall have the meaning set forth in Section 16.01.
"Definitive Securities" shall mean those securities issued in fully
registered certificated form not otherwise in global form.
"Depositary" shall mean, with respect to Securities issuable in whole or in
part in the form of one or more Global Securities, The Depository Trust Company,
New York, New York, another clearing agency, or any successor registered as a
clearing agency under the Exchange Act or other applicable statute or
regulation, which, in each case, shall be designated by the Company pursuant to
Section 2.04(d).
3
<PAGE>
"Dissolution Event" means the liquidation of Dynegy Capital Trust pursuant
to the Declaration, and the distribution of the Securities held by the Property
Trustee to the holders of the Trust Securities issued by Dynegy Capital Trust
pro rata in accordance with the Declaration.
"Dynegy Capital Trust" or the "Trust" shall mean Dynegy Capital Trust II, a
Delaware business trust created for the purpose of issuing its undivided
beneficial interests in connection with the issuance of Securities under this
Indenture.
"Event of Default" shall mean any event specified in Section 5.01,
continued for the period of time, if any, and after the giving of the notice, if
any, therein designated.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 16.01.
"Global Security" means, with respect to the Securities, a Security
executed by the Company and delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction, all in accordance with the Indenture,
which shall be registered in the name of the Depositary or its nominee.
"Indebtedness" shall mean (i) every obligation of the Company for money
borrowed; (ii) every obligation of the Company evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses; (iii) every
reimbursement obligation of the Company with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of the
Company; (iv) every obligation of the Company 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 the Company; (vi) all indebtedness of the Company
whether incurred on or prior to the date of the Indenture or thereafter
incurred, 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, the Company has guaranteed or is
responsible or liable, directly or indirectly, as obligor or otherwise.
"Indebtedness Ranking on a Parity with the Securities" shall mean (i)
Indebtedness, whether outstanding on the date of execution of this Indenture or
hereafter created, assumed or incurred, to the extent such indebtedness
specifically by its terms ranks equally with and not prior to the Securities in
the right of payment upon the happening of any dissolution or winding up or
liquidation or reorganization of the Company, and (ii) all other debt
securities, and guarantees in respect of those debt securities (including Other
Debentures and Other Guarantees), issued to any trust other than Dynegy Capital
Trust, or a trustee of such trust, partnership or other entity affiliated with
the Company that is a financing vehicle of the Company (a "financing entity") in
connection with the
4
<PAGE>
issuance by such financing entity of equity securities that are similar to the
Preferred Securities or other securities guaranteed by the Company. The securing
of any Indebtedness, otherwise constituting Indebtedness Ranking on a Parity
with the Securities, shall not be deemed to prevent such Indebtedness from
constituting Indebtedness Ranking on a Parity with the Securities.
"Indebtedness Ranking Junior to the Securities" shall mean any
Indebtedness, whether outstanding on the date of execution of this Indenture or
hereafter created, assumed or incurred, to the extent such indebtedness
specifically by its terms ranks junior to and not equally with or prior to the
Securities (and any other Indebtedness Ranking on a Parity with the Securities)
in right of payment upon the happening of any dissolution or winding up or
liquidation or reorganization of the Company. The securing of any Indebtedness,
otherwise constituting Indebtedness Ranking Junior to the Securities, shall not
be deemed to prevent such Indebtedness from constituting Indebtedness Ranking
Junior to the Securities.
"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, including, for
all purposes of this Indenture and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively.
"Interest Payment Date" shall have the meaning set forth in Section
2.05(a).
"Investment Company Event" means the receipt by Dynegy Capital Trust and
the Company of an opinion of counsel experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or a
written change (including any announced prospective change) in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, which amendment or change is effective or which
pronouncement or decision is announced on or after _____________, ____, there is
more than an insubstantial risk that Dynegy Capital Trust is or will be
considered an "investment company" that is required to be registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), which
change or prospective change becomes effective or would become effective, as the
case may be, on or after the date of the original issuance of the Preferred
Securities.
"Maturity Date" shall mean __________, ____.
"Mortgage" shall mean and include any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other similar
encumbrance.
"Non Book-Entry Preferred Securities" shall have the meaning set forth in
Section 2.04(a)(ii).
5
<PAGE>
"Officers" shall mean any of the Chairman, a Vice Chairman, the Chief
Executive Officer, the President, a Vice President, the Comptroller, the
Secretary or an Assistant Secretary of the Company.
"Officers' Certificate" shall mean a certificate signed on behalf of the
Company, by the Chairman of the Board, Chief Executive Officer, a Vice Chairman
of the Board, the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
and delivered to the Trustee. Any Officers' Certificate delivered with respect
to compliance with a condition or a covenant provided for in this Indenture
shall include the statements specified to be so included by Section 13.06 of
this Indenture.
"Opinion of Counsel" shall mean a written opinion of counsel, who may be an
employee of the Company, and who shall be acceptable to the Trustee.
"Optional Redemption Price" means the greater of (i) 100% of the principal
amount of the Securities to be redeemed plus accrued and unpaid interest thereon
(including Additional Sums, if any) to the date of redemption and (ii) the sum
of the present values of the remaining scheduled payments of principal of the
Securities to be redeemed and interest thereon (including Additional Sums if
any) discounted to the date of redemption, on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months), at the Treasury Rate plus ___
basis points plus accrued and unpaid interest thereon to the date of redemption.
"Other Debentures" means all junior subordinated debentures issued by the
Company from time to time and sold to trusts to be established by the Company
(if any), in each case similar to the Trust.
"Other Guarantees" means all guarantees to be issued by the Company with
respect to preferred securities (if any) and issued to other trusts to be
established by the Company (if any), in each case similar to the Trust.
The term "outstanding" when used with reference to Securities, shall,
subject to the provisions of Section 7.04, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee or the Authenticating
Agent under this Indenture, except
(a) Securities theretofore canceled by the Trustee or the Authenticating
Agent or delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of
which moneys in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the
Company) or shall have been set aside and segregated in trust by the
Company (if the Company shall act as its own paying agent); provided
that, if such Securities, or portions thereof, are to be redeemed
prior to maturity thereof, notice of such redemption shall have been
given as in Article XIV provided
6
<PAGE>
or provision satisfactory to the Trustee shall have been made for
giving such notice; and
(c) Securities which have been paid or in lieu of or in substitution for
which other Securities shall have been authenticated and delivered
pursuant to the terms of Section 2.07 unless proof satisfactory to the
Company and the Trustee is presented that any such Securities are held
by bona fide holders in due course.
"Person" shall mean any individual, corporation, estate, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt and as that evidenced by
such particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.07 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" shall mean the subordinated capital income
securities representing undivided beneficial interests in the assets of Dynegy
Capital Trust which rank pari passu with the Common Securities issued by Dynegy
Capital Trust; provided, however, that if an Event of Default has occurred and
is continuing, no payments in respect of Distributions on, or payments upon
liquidation, redemption or otherwise with respect to, the Common Securities
shall be made until the holders of the Preferred Securities shall be paid in
full the Distributions and the liquidation, redemption and other payments to
which they are entitled.
"Preferred Securities Guarantee" shall mean any guarantee that the Company
may enter into with The First National Bank of Chicago or other Persons that
operates directly or indirectly for the benefit of holders of Preferred
Securities of Dynegy Capital Trust.
"Principal Office of the Trustee", or other similar term, shall mean the
office of the Trustee, at which at any particular time its corporate trust
business shall be administered.
"Property Trustee" shall have the same meaning as set forth in the
Declaration.
"Redemption Price" means when used with respect to any Security to be
redeemed, the price at which it is to be redeemed pursuant to this Indenture.
"Reference Treasury Dealer" means ________________ and its successors;
provided however, that if ___________________ shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
7
<PAGE>
"Reference Treasury Dealer Quotations" means, with respect to the Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by the Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding such redemption date.
"Responsible Officer" shall mean any officer of the Trustee with direct
responsibility for the administration of the Indenture and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securityholder", "holder of Securities", or other similar terms, shall
mean any Person in whose name at the time a particular Security is registered on
the register kept by the Company or the Trustee for that purpose in accordance
with the terms hereof.
"Security Register" shall mean (i) prior to a Dissolution Event, the list
of holders provided to the Trustee pursuant to Section 4.01, and (ii) following
a Dissolution Event, any security register maintained by a security registrar
for the Securities appointed by the Company following the execution of a
supplemental indenture providing for transfer procedures as provided for in
Section 2.06(a).
"Senior Indebtedness" shall mean all Indebtedness, whether outstanding on
the date of execution of this Indenture or hereafter created, assumed or
incurred, except Indebtedness Ranking on a Parity with the Securities or
Indebtedness Ranking Junior to the Securities, and any deferrals, renewals or
extensions of such Senior Indebtedness.
"Special Event" means either an Investment Company Event or a Tax Event.
"Special Event Redemption Price" shall mean, with respect to any redemption
of the Securities following a Special Event, an amount in cash equal to 100% of
the principal amount of the Securities to be redeemed plus accrued and unpaid
interest thereon (including Additional Sums, if any) to the date of redemption.
"Subsidiary" shall mean with respect to any Person, (i) any corporation at
least a majority of the outstanding voting stock of which is owned, directly or
indirectly, by such Person or by one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries, (ii) any general partnership, joint
venture or similar entity, at least a majority of whose outstanding partnership
or similar interests shall at the time be owned by such Person, or by one or
more of its Subsidiaries, or by such Person and one or more of its Subsidiaries
and (iii) any limited partnership of which such Person or any of its
Subsidiaries is a general partner. For the purposes of this definition, "voting
stock" means shares, interests, participations or other equivalents in the
equity interest (however
8
<PAGE>
designated) in such Person having ordinary voting power for the election of a
majority of the directors (or the equivalent) of such Person, other than shares,
interests, participations or other equivalents having such power only by reason
of the occurrence of a contingency.
"Tax Event" shall mean the receipt by Dynegy Capital Trust and the Company
of an opinion of counsel experienced in such matters to the effect that, as a
result of any amendment to, or change (including any announced prospective
change) in, the laws or any regulations thereunder of the United States or any
political subdivision or taxing authority thereof or therein or as a result of
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after _____________, ____,
there is more than an insubstantial risk that (i) Dynegy Capital Trust is, or
will be within 90 days of the date of such opinion, subject to United States
Federal income tax with respect to income received or accrued on the Securities,
(ii) interest payable by the Company on the Securities is not, or within 90 days
of the date of such opinion, will not be, deductible by the Company, in whole or
in part, for United States Federal income tax purposes, or (iii) Dynegy Capital
Trust is, or will be within 90 days of the date of such opinion, subject to more
than a de minimis amount of other taxes, duties or other governmental charges.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Trust Indenture Act of 1939" shall mean the Trust Indenture Act of 1939 as
in force at the date of execution of this Indenture; provided, however, that, in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act of 1939" shall mean, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Trustee" shall mean the Person identified as "Trustee" in the first
paragraph hereof, and, subject to the provisions of Article VI hereof, shall
also include its successors and assigns as Trustee hereunder. The term
"Trustee" as used with respect to a particular series of the Securities shall
mean the trustee with respect to that series.
"Trust Securities" shall mean the Preferred Securities and the Common
Securities, collectively.
"U.S. Government Obligations" shall mean securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under
clauses (i) or (ii) are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such U.S. Government
9
<PAGE>
Obligation or a specific payment of interest on or principal of any such U.S.
Government Obligation held by such custodian for the account of the holder of a
depository receipt; provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of interest on or
principal of the U.S. Government Obligation evidenced by such depository
receipt.
SECTION 1.02. Business Day Certificate.
On the date of execution and delivery of this Indenture (with respect to
the remainder of calendar year 1997) and thereafter, within 15 days prior to the
end of each calendar year while this Indenture remains in effect (with respect
to the succeeding calendar years), the Company shall deliver to the Trustee an
Officers' Certificate specifying the days on which banking institutions or trust
companies in Wilmington, Delaware or Chicago, Illinois are authorized or
obligated by law or executive order to be closed.
SECTION 1.03. Form 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 the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer 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 certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such 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.
10
<PAGE>
ARTICLE II
SECURITIES
----------
SECTION 2.01. Forms Generally.
The Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, the terms of which are incorporated in
and made a part of this Indenture. The Securities may have notations, legends
or endorsements required by law, stock exchange rule, agreements to which the
Company is subject or usage. Each Security shall be dated the date of its
authentication. The Securities shall be issued in denominations of $1,000 and
integral multiples thereof.
The Securities shall be redeemable as provided in Article XIV.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article XV.
SECTION 2.02. Execution and Authentication.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, a Vice Chairman of the Board, its Chief Executive Officer, its
President or one of its Vice Presidents and attested by a Treasurer, Assistant
Treasurer, Secretary or an Assistant Secretary. The signature of any such
person on the Securities may be manual or facsimile. If an Officer whose
signature is on a Security no longer holds that office at the time the Security
is authenticated, the Security shall nevertheless be valid.
A Security shall not be valid until authenticated by the manual or
facsimile signature of the Trustee. The signature of the Trustee shall be
conclusive evidence that the Security has been authenticated under this
Indenture. The form of Trustee's certificate of authentication to be borne by
the Securities shall be substantially as set forth in Exhibit A hereto.
The Trustee shall, upon a Company Order, authenticate for original issue up
to, and the aggregate principal amount of Securities outstanding at any time may
not exceed $__________ aggregate principal amount of the Securities, except as
provided in Sections 2.07, 2.08 and 14.05.
Each Security shall be dated the date of its authentication.
SECTION 2.03. Form and Payment.
Except as provided in Section 2.04, the Securities shall be issued in fully
registered certificated form without interest coupons. Principal of, premium,
if any, and interest on the Securities issued in certificated form will be
payable, the transfer of such Securities will be registrable and such Securities
will be exchangeable for Securities bearing identical terms and provisions at
the office or agency of the Company maintained for such purpose under Section
3.02; provided, however, that payment of interest with respect to Securities
(other than a Global Security) may be made at the option of the Company (i) by
check mailed to the holder at such address as shall appear in the Security
Register or (ii) by transfer to an account maintained by the Person entitled
11
<PAGE>
thereto; provided that proper transfer instructions have been received in
writing by the relevant record date. Notwithstanding the foregoing, so long as
the holder of any Securities is the Property Trustee, the payment of the
principal of, premium, if any, and interest (including Compounded Interest and
Additional Sums, if any), on such Securities held by the Property Trustee will
be made at such place and to such account as may be designated by the Property
Trustee.
SECTION 2.04. Global Security.
(a) In connection with a Dissolution Event,
(i) if any Preferred Securities are held in book-entry form, the
related Definitive Securities shall be presented to the Trustee (if an
arrangement with the Depositary has been maintained) by the Property
Trustee in exchange for one or more Global Securities (as may be
required pursuant to Section 2.06) in an aggregate principal amount
equal to the aggregate principal amount of all outstanding Securities,
to be registered in the name of the Depositary, or its nominee, and
delivered by the Trustee to the Depositary for crediting to the
accounts of its participants pursuant to the instructions of the
Administrative Trustees; the Company upon any such presentation
shall execute one or more Global Securities in such aggregate
principal amount and deliver the same to the Trustee for
authentication and delivery in accordance with this Indenture; and
payments on the Securities issued as a Global Security will be made to
the Depositary; and
(ii) if any Preferred Securities are held in certificated form,
the related Definitive Securities may be presented to the Trustee by
the Property Trustee and any Preferred Security certificate which
represents Preferred Securities other than Preferred Securities in
book-entry form ("Non Book-Entry Preferred Securities") will be deemed
to represent beneficial interests in Securities presented to the
Trustee by the Property Trustee having an aggregate principal amount
equal to the aggregate liquidation amount of the Non Book-Entry
Preferred Securities until such Preferred Security certificates are
presented to the Security Registrar for transfer or reissuance, at
which time such Preferred Security certificates will be canceled and
a Security, registered in the name of the holder of the Preferred
Security certificate or the transferee of the holder of such Preferred
Security certificate, as the case may be, with an aggregate principal
amount equal to the aggregate liquidation amount of the Preferred
Security certificate canceled, will be executed by the Company and
delivered to the Trustee for authentication and delivery in accordance
with this Indenture. Upon the issuance of such Securities, Securities
with an equivalent aggregate principal amount that were presented by
the Property Trustee to the Trustee will be canceled.
(b) The Global Securities shall represent the aggregate amount of
outstanding Securities from time to time endorsed thereon; provided, that
the aggregate amount of out-
12
<PAGE>
standing Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Security to reflect the amount of any increase or
decrease in the amount of outstanding Securities represented thereby shall
be made by the Trustee, in accordance with instructions given by the
Company as required by this Section 2.04.
(c) The Global Securities may be transferred, in whole but not in
part, only to the Depositary, another nominee of the Depositary, or to a
successor Depositary selected or approved by the Company or to a nominee of
such successor Depositary.
(d) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or the Depositary has ceased
to be a clearing agency registered under the Exchange Act or any applicable
statute or regulation, and a successor Depositary is not appointed by the
Company within 90 days after the Company receives such notice or becomes
aware of such condition, as the case may be, the Company will execute, and
the Trustee, upon receipt of a Company Order, will authenticate and make
available for delivery the Definitive Securities, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security in exchange for such Global Security. If
there is an Event of Default, the Depositary shall have the right to
exchange the Global Securities for Definitive Securities. In addition, the
Company may at any time determine that the Securities shall no longer be
represented by a Global Security. In the event of such an Event of Default
or such a determination, the Company shall execute, and subject to Section
2.06, the Trustee, upon receipt of an Officers' Certificate evidencing such
determination by the Company and a Company Order, will authenticate and
make available for delivery the Definitive Securities, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security in exchange for such Global Security. Upon
the exchange of the Global Security for such Definitive Securities, in
authorized denominations, the Global Security shall be canceled by the
Trustee. Such Definitive Securities issued in exchange for the Global
Security shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee. The
Trustee shall deliver such Definitive Securities to the Depositary for
delivery to the Persons in whose names such Definitive Securities are so
registered.
SECTION 2.05. Interest.
(a) Each Security will bear interest at the rate of ____% per annum
(the "Coupon Rate") from the most recent date to which interest has been
paid or duly provided for or, if no interest has been paid or duly provided
for, from _______________,____, until the principal thereof becomes due and
payable, and at the Coupon Rate on any overdue principal (and premium, if
any) and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest, compounded semi-
annually, payable (subject to the provisions of Article XVI) semi-annually
in arrears on _________ and
13
<PAGE>
_______ of each year (each, an "Interest Payment Date") commencing on
___________, ___, to the Person in whose name such Security or any
predecessor Security is registered, at the close of business on the regular
record date for such interest installment, which shall be the fifteenth day
of the month immediately preceding the month in which the relevant Interest
Payment Date falls.
(b) Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period of less than a full
calendar month, the number of days lapsed in such month. In the event that
any Interest Payment Date falls on a day that is not a Business Day, then
payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that if such next succeeding
Business Day falls in the next succeeding calendar year, then 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 such payment is otherwise
required.
(c) During such time as the Property Trustee is the holder of any
Securities, the Company shall pay any additional amounts on the Securities
as may be necessary in order that the amount of Distributions then due and
payable by Dynegy Capital Trust on the outstanding Trust Securities shall
not be reduced as a result of any additional taxes, duties and other
governmental charges to which Dynegy Capital Trust has become subject as a
result of a Tax Event ("Additional Sums").
(d) Interest on any Security which is payable, and which is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to
the Person is whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the record date for
such interest installment.
SECTION 2.06. Transfer and Exchange.
(a) Transfer Restrictions. The Securities will be issued and may be
transferred only in blocks having an aggregate principal amount of not less
than $100,000. Any such transfer of the Securities in a block having an
aggregate principal amount of less than $100,000 shall be deemed to be void
and of no legal effect whatsoever. Any such transferee shall be deemed not
to be a holder of such Securities for any purpose, including, but not
limited to the receipt of payments on such Securities, and such transferee
shall be deemed to have no interest whatsoever in such Securities.
(b) General Provisions Relating to Transfers and Exchanges. To permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Definitive Securities and Global Securities in
any authorized denomination and of a like aggregate principal amount at the
Security Registrar's request. All Definitive Securities and Global
Securities issued upon any registration of transfer or exchange of
14
<PAGE>
Definitive Securities or Global Securities shall be the valid obligations
of the Company, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Definitive Securities or Global Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed
or be accompanied by a written instrument of transfer in a form that is
satisfactory to the Company and the Security 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 registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith.
The Company shall not be required to (i) issue, register the transfer of or
exchange Securities during a period beginning at the opening of business 15 days
before the day of mailing of a notice of redemption or any notice of selection
of Securities for redemption under Article XIV hereof and ending at the close of
business on the day of such mailing; or (ii) register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
The transfer and exchange of beneficial interests in a Global Security,
which does not involve the issuance of a Definitive Security or the transfer of
an interest to another Global Security, shall be effected through the Depositary
(but not the Trustee) in accordance with the Indenture (including the
restrictions on transfers set forth herein) and the procedures of the Depositary
therefore. The Trustee will not have any responsibility for the transfer and
exchange of beneficial interests in such Global Security that does not involve
the issuance of a Definitive Security or the transfer of interests to another
Global Security.
Prior to due presentment for the registration of a transfer of any
Security, the Trustee, the Company and any agent of the Trustee or the Company
may deem and treat the Person in whose name any Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of and premium, if any, and interest on such Securities, neither the
Trustee, nor the Company nor any agent of the Trustee or the Company shall be
affected by notice to the contrary.
SECTION 2.07. Replacement Securities.
If any mutilated Security is surrendered to the Trustee, or the Company and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Security, the Company shall issue and the Trustee shall
authenticate a replacement Security if the Trustee's requirements for
replacements of Securities are met. An indemnity bond must be supplied by the
holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any
15
<PAGE>
agent thereof or any authenticating agent from any loss that any of them may
suffer if a Security is replaced. The Company or the Trustee may charge for its
expenses in replacing a Security.
Every replacement Security is an obligation of the Company and shall be
entitled to all of the benefits of this Indenture equally and proportionately
with all other Securities duly issued hereunder.
SECTION 2.08. Temporary Securities.
Pending the preparation of Definitive Securities, the Company may execute,
and upon Company Order the Trustee shall authenticate and make available for
delivery, temporary Securities that are printed, lithographed, typewritten,
mimeographed or otherwise reproduced, in any authorized denomination,
substantially of the tenor of the Definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company shall cause Definitive
Securities to be prepared without unreasonable delay. The Definitive Securities
shall be printed, lithographed or engraved, or provided by any combination
thereof, or in any other manner permitted by the rules and regulations of any
applicable securities exchange, all as determined by the officers executing such
Definitive Securities. After the preparation of Definitive Securities, the
temporary Securities shall be exchangeable for Definitive Securities upon
surrender of the temporary Securities at the office or agency maintained by the
Company for such purpose pursuant to Section 3.02 hereof, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Securities, the Company shall execute, and the Trustee shall authenticate and
make available for delivery, in exchange therefor the same aggregate principal
amount of Definitive Securities of authorized denominations. Until so
exchanged, the temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as Definitive Securities.
SECTION 2.09. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall retain or destroy canceled Securities in accordance with
its normal practices (subject to the record retention requirement of the
Exchange Act) unless the Company directs them to be returned to it. The Company
may not issue new Securities to replace Securities that have been redeemed or
paid or that have been delivered to the Trustee for cancellation.
16
<PAGE>
SECTION 2.10. Defaulted Interest.
Any interest on any Security that is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the holder on the relevant
regular record date by virtue of having been such holder; and such Defaulted
Interest shall be paid by the Company, at its election, as provided in clause
(a) or clause (b) below:
(a) The Company may make payment of any Defaulted Interest on
Securities to the Persons in whose names such Securities (or their
respective Predecessor Securities) are registered at the close of business
on a special record date for the payment of such Defaulted Interest, which
shall be fixed in the following manner: the Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each such Security and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest
which shall not be more than 15 nor less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed, first
class postage prepaid, to each Securityholder at his or her address as it
appears in the Security Register, not less than 10 days prior to such
special record date. Notice of the proposed payment of such Defaulted
Interest and the special record date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names such Securities (or their respective Predecessor Securities) are
registered on such special record date and shall be no longer payable
pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest on any
Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
SECTION 2.11. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Securityholders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
17
<PAGE>
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. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
-----------------------------------
SECTION 3.01. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of the holders of the
Securities that it will duly and punctually pay or cause to be paid the
principal of, premium, if any, and interest on the Securities at the place, at
the respective times and in the manner provided herein. The Company further
covenants to pay any and all amounts, including, without limitation, Additional
Sums, as may be required pursuant to Section 2.05(c) and Compounded Interest, as
may be required pursuant to Section 16.01.
SECTION 3.02. Offices for Notices and Payments, etc.
So long as any of the Securities remain outstanding, the Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where the Securities may be presented for payment, an office or agency where the
Securities may be presented for registration of transfer and for exchange as in
this Indenture provided and an office or agency where notices and demands to or
upon the Company in respect of the Securities or of this Indenture may be
served. The Company will give to the Trustee written notice of the location of
any such office or agency and of any change of location thereof. Until
otherwise designated from time to time by the Company in a notice to the
Trustee, any such office or agency for all of the above purposes shall be the
Principal Office of the Trustee. In case the Company shall fail to maintain any
such office or agency in the Borough of Manhattan, The City of New York, or
shall fail to give such notice of the location or of any change in the location
thereof, presentations and demands may be made and notices may be served at the
Principal Office of the Trustee.
In addition to any such office or agency, the Company may from time to time
designate one or more offices or agencies outside the Borough of Manhattan, The
City of New York, where the Securities may be presented for payment,
registration of transfer and for exchange in the manner provided in this
Indenture, and the Company may from time to time rescind such designation, as
the Company may deem desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in the Borough of Manhattan,
The City of New York, for the purposes above mentioned. The Company will give to
the Trustee prompt written notice of any such designation or rescission thereof.
18
<PAGE>
SECTION 3.03. Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 3.04. Provision as to Paying Agent.
(a) If the Company shall appoint a paying agent other than the Trustee
with respect to the Securities, it will cause such paying agent to execute
and deliver to the Trustee an instrument in which such agent shall agree
with the Trustee, subject to the provision of this Section 3.04,
(i) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest on the
Securities (whether such sums have been paid to it by the Company or
by any other obligor on the Securities) in trust for the benefit of
the holders of the Securities and comply with all provisions of the
Trust Indenture Act applicable to it as paying agent; and
(ii) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Securities) to make any
payment of the principal of and premium or interest (including
Additional Sums and Compounded Interest, if any) on the Securities
when the same shall be due and payable.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of and premium, if any, or interest
on the Securities, set aside, segre gate and hold in trust for the benefit
of the holders of the Securities a sum sufficient to pay such principal,
premium or interest so becoming due and will notify the Trustee of any
failure to take such action and of any failure by the Company (or by any
other obligor under the Securities) to make any payment of the principal of
and premium, if any, or interest on the Securities when the same shall
become due and payable.
(c) Anything in this Section 3.04 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Securities hereunder, or for any other
reason, pay or cause to be paid to the Trustee all sums held in trust for
such Securities by the Trustee or any paying agent hereunder, as required
by this Section 3.04, such sums to be held by the Trustee upon the trusts
herein contained.
(d) Anything in this Section 3.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 3.04 is subject
to Sections 11.03 and 11.04.
19
<PAGE>
SECTION 3.05. Certificate to Trustee.
The Company will deliver to the Trustee on or before 120 days after the end
of each fiscal year in each year, commencing with the first fiscal year ending
after the date hereof, so long as Securities are outstanding hereunder, an
Officers' Certificate, one of the signers of which shall be the principal
executive, principal financial or principal accounting officer of the Company,
stating that in the course of the performance by the signers of their duties as
officers of the Company they would normally have knowledge of any default by the
Company in the performance of any covenants contained herein, stating whether or
not they have knowledge of any such default and, if so, specifying each such
default of which the signers have knowledge and the nature thereof.
SECTION 3.06. Compliance with Consolidation Provisions.
The Company will not, while any of the Securities remain outstanding,
consolidate with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other Person unless the provisions of
Article X hereof are complied with.
SECTION 3.07. Limitation on Dividends.
The Company will not, and will not permit any subsidiary of the Company to,
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company's
capital stock (which includes common and preferred stock) (other than (a)
dividends or distributions in shares of, or options, warrants or rights to
subscribe for or purchase shares of, Common Stock of the Company, (b) any
declaration of a dividend in connection with the implementation of a
shareholder's rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
as a result of a reclassification of the Company's capital stock or the exchange
or the conversion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock, (d) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, and (e) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Company's benefit plans for
its directors, officers, employees or consultants or any of the Company's
dividend reinvestment plans), (ii) make any payment of principal, premium, if
any, or interest on or repay or repurchase or redeem any debt securities of the
Company (including Other Debentures) that rank pari passu with or junior in
right of payment to the Securities or (iii) make any guarantee payments with
respect to any guarantee by the Company (other than payments under the Preferred
Securities Guarantee) of the debt securities of any Subsidiary of the Company
(including Other Guarantees) if such guarantee ranks pari passu or junior in
right of payment to the Securities if at such time (1) there shall have occurred
any event of which the Company has actual knowledge that (a) with the giving of
notice or the lapse of time, or both, would constitute an Event of Default and
(b) in respect of which the Company shall not have taken reasonable steps to
cure, (2) an Event of Default hereunder shall have occurred and be continuing,
(3) if such Securities are held by the Property Trustee, the Company shall be in
default with respect to its payment obligations
20
<PAGE>
under the Preferred Securities Guarantee or (4) the Company shall have given
notice of its election of the exercise of its right to extend the interest
payment period pursuant to Section 16.01 and any such extension shall be
continuing.
SECTION 3.08. Covenants as to Dynegy Capital Trust
In the event Securities are issued to Dynegy Capital Trust or a trustee of
such trust in connection with the issuance of Trust Securities by Dynegy Capital
Trust, for so long as such Trust Securities remain outstanding, the Company (i)
will maintain 100% direct or indirect ownership of the Common Securities of
Dynegy Capital Trust; provided, however, that any successor of the Company,
permitted pursuant to Article X, may succeed to the Company's ownership of such
Common Securities, (ii) will use its reasonable efforts to cause Dynegy Capital
Trust (a) to remain a business trust, except in connection with a distribution
of Securities to the holders of Trust Securities in liquidation of the Trust,
the redemption of all of the Trust Securities of Dynegy Capital Trust or certain
mergers, consolidations or amalgamations, each as permitted by the Declaration
of Dynegy Capital Trust, and (b) to otherwise continue to be treated as a
grantor trust and not an association taxable as a corporation for United States
federal income tax purposes and (iii) use its reasonable efforts to cause each
holder of Trust Securities to be treated as owning an undivided beneficial
interest in the Securities.
SECTION 3.09. Payment of Trust's Costs and Expenses.
In connection with the offering, sale and issuance of the Securities to
Dynegy Capital Trust and in connection with the sale of the Trust Securities by
Dynegy Capital Trust, the Company, in its capacity as borrower with respect to
the Securities, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Securities and compensation of the Trustee in accordance
with the provisions of Section 6.06;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of Dynegy
Capital Trust, the offering, sale and issuance of the Trust Securities
(including commissions to the initial purchaser in connection therewith),
the fees and expenses of the Property Trustee and the Delaware Trustee, the
costs and expenses relating to the operation of Dynegy Capital Trust,
including without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving
and computing or accounting equipment, paying agent(s), registrar(s),
transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection
with the acquisition, financing, and disposition of assets of Dynegy
Capital Trust;
(c) be primarily and fully liable for any indemnification obligations
arising with respect to the Declaration;
21
<PAGE>
(d) pay any and all taxes, duties, assessments or governmental charges
of whatever nature (other than United States withholding taxes attributable
to Dynegy Capital Trust or its assets) imposed on the Trust by the United
States, or any other taxing authority, and all liabilities, costs and
expenses with respect to such taxes of the Trust; and
(e) pay all other fees, expenses, debts and obligations (other than in
respect of principal, interest and premium, if any, on the Trust
Securities) related to Dynegy Capital Trust.
The foregoing obligations of the Company are for the benefit of, and shall
be enforceable by, any person to whom any such debt, obligations, costs,
expenses and taxes are owed (each, a "Creditor") whether or not such Creditor
has received notice thereof. Any such Creditor may enforce such obligations of
the Company directly against the Company, and the Company irrevocably waives any
right or remedy to require that any such Creditor take any action against the
Trust or any person before proceeding against the Company. The Company shall
execute such additional agreements as may be necessary or desirable to give full
effect to the foregoing.
SECTION 3.10. Payment Upon Resignation or Removal.
Upon termination of this Indenture or the removal or resignation of the
Trustee, unless otherwise stated, the Company shall pay to the Trustee all
amounts accrued and owing to the date of such termination, removal or
resignation. Upon termination of the Declaration or the removal or resignation
of the Delaware Trustee or the Property Trustee, as the case may be, pursuant to
Section 5.7 of the Declaration, the Company shall pay to the Delaware Trustee or
the Property Trustee, as the case may be, all amounts accrued and owing to the
date of such termination, removal or resignation.
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE
-----------------------------------------
COMPANY AND THE TRUSTEE
-----------------------
SECTION 4.01. Securityholders' Lists.
The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee:
(a) on a semi-annual basis on each regular record date for the
Securities, a list, in such form as the Trustee may reasonably require, of
the names and addresses of the Securityholders as of such record date; and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company, of any such request, a list of
similar form and content as of a
22
<PAGE>
date not more than 15 days prior to the time such list is furnished, except
that, no such lists need be furnished so long as the Trustee is in
possession thereof by reason of its acting as Security registrar.
SECTION 4.02. Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders
of the Securities (1) contained in the most recent list furnished to it as
provided in Section 4.01 or (2) received by it in the capacity of
Securities registrar (if so acting) hereunder. The Trustee may destroy any
list furnished to it as provided in Section 4.01 upon receipt of a new list
so furnished.
(b) In case three or more holders of Securities (hereinafter referred
to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned a Security for
a period of at least six months preceding the date of such application, and
such application states that the applicants desire to communicate with
other holders of Securities or with holders of all Securities with respect
to their rights under this Indenture and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall within five Business Days after the
receipt of such application, at its election, either:
(i) afford such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.02, or
(ii) inform such applicants as to the approximate number of
holders of all Securities, whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with
the provisions of subsection (a) of this Section 4.02, and as to the
approximate cost of mailing to such Securityholders the form of proxy
or other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access
to such information, the Trustee shall, upon the written request of
such applicants, mail to each Securityholder whose name and address
appear in the information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of this Section 4.02
a copy of the form of proxy or other communication which is specified
in such request with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for
the payment, of the reasonable expenses of mailing, unless within five
days after such tender, the Trustee shall mail to such applicants and
file with the Commission, together with a copy of the material to be
mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the
holders of Securities of such series or all Securities, as the case
may be, or would be in violation of applicable law.
23
<PAGE>
Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections
specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of
an order sustaining one or more of such objections, the Commission
shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Securityholders with reasonable promptness after the entry of such
order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.
(c) Each and every holder of Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any paying agent shall be held accountable
by reason of the disclosure of any such information as to the names
and addresses of the holders of Securities in accordance with the
provisions of subsection (b) of this Section 4.02, regardless of the
source from which such information was derived, and that the Trustee
shall not be held accountable by reason of mailing any material
pursuant to a request made under said subsection (b).
SECTION 4.03. Reports by Company.
(a) The Company covenants and agrees to file with the Trustee, within
15 days after the date on which the Company is required to file the same
with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the
foregoing as said Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the
Company is not required to file information, documents or reports pursuant
to either of such sections, then to file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time
to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a security listed and
registered on a national securities exchange as may be prescribed from time
to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from
time to time by said Commission, such additional information, documents and
reports with respect to compliance by the Company with the conditions and
covenants provided for in this Indenture as may be required from time to
time by such rules and regulations.
(c) The Company covenants and agrees to transmit by mail to all
holders of Securities, as the names and addresses of such holders appear
upon the Security Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information,
24
<PAGE>
documents and reports required to be filed by the Company pursuant to
subsections (a) and (b) of this Section 4.03 as may be required by rules
and regulations prescribed from time to time by the Commission.
(d) Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall
not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.04. Reports by the Trustee.
(a) The Trustee shall transmit to Securityholders such reports
concerning the Trustee and its actions under this Indenture 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 Trustee shall, within sixty days after each ___________
following the date of this Indenture, commencing _____________, ____,
deliver to Securityholders a brief report, dated as of such __________,
which complies with the provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such transmission
to Securityholders, be filed by the Trustee with each stock exchange, if
any, upon which the Securities are listed, with the Commission and with the
Company. The Company will promptly notify the Trustee when the Securities
are listed on any stock exchange.
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
-------------------------------------------
ON EVENT OF DEFAULT
-------------------
SECTION 5.01. Events of Default.
"Event of Default", wherever used herein with respect to Securities, 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) default in the payment of any interest (including Compounded
Interest or Additional Sums, if any), upon any Security or any Other
Debentures when it becomes due and payable, and continuance of such default
for a period of 30 days; provided, however, that a valid extension of an
interest payment period by the Company in accordance with the terms hereof
shall not constitute a default in the payment of interest for this purpose;
or
25
<PAGE>
(b) default in the payment of all or any part of the principal of (or
premium, if any, on) any Security or any Other Debentures as and when the
same shall become due and payable either at maturity, upon redemption, by
declaration of acceleration of maturity or otherwise; or
(c) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such default or breach for a
period of 90 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the holders of at least 25% in aggregate principal amount of the
outstanding Securities a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(d) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Company in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Company or for any
substantial part of its property, or ordering the winding-up or liquidation
of its affairs and such decree or order shall remain unstayed and in effect
for a period of 90 consecutive days; or
(e) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency, reorganization or other similar law now or
hereafter in effect, shall consent to the entry of an order for relief in
an involuntary case under any such law, or shall consent to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of the Company or of
any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall fail generally to pay its debts as
they become due.
If an Event of Default with respect to Securities at the time outstanding
occurs and is continu ing, then in every such case the Trustee or the holders
of not less than 25% in aggregate principal amount of the Securities then
outstanding may declare the principal amount of all Securities to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by the holders of the outstanding Securities), and upon any such
declaration the same shall become immediately due and payable. Payment of
principal and interest (including any Compounded Interest and Additional Sums to
the extent permitted by applicable law) on such Securities shall remain
subordinated to the extent provided in Article XV notwithstanding that such
amount shall become immediately due and payable as herein provided. If an Event
of Default specified in Section 5.01(d) or (e) with respect to the Securities
occurs, the principal amount of all the Securities shall automatically, and
without any declaration or other action on the part of Trustee or any holder,
become immediately due and payable.
26
<PAGE>
The foregoing provisions, however, are subject to the condition that if, at
any time after the principal of the Securities shall have been so declared due
and payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, (i) the Company
shall pay or shall deposit with the Trustee a sum sufficient to pay (A) all
matured installments of interest (including Compounded Interest and Additional
Sums, if any) upon all the Securities and the principal of and premium, if any,
on any and all Securities which shall have become due otherwise than by
acceleration (with interest upon such principal and premium, if any, and, to the
extent that payment of such interest is enforceable under applicable law, on
overdue installments of interest, at the same rate as the rate of interest
specified in the Securities to the date of such payment or deposit) and (B) such
amount as shall be sufficient to cover compensation due to the Trustee and each
predecessor Trustee, their respective agents, attorneys and counsel, pursuant to
Section 6.06, and (ii) any and all Events of Default under the Indenture, other
than the non-payment of the principal of the Securities which shall have become
due solely by such declaration of acceleration, shall have been cured, waived or
otherwise remedied as provided herein, then, in every such case, the holders of
a majority in aggregate principal amount of the Securities then outstanding, by
written notice to the Company and to the Trustee, may rescind and annul such
declaration and its consequences, but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
In case the Trustee or any holder shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee or such holder, then and in
every such case the Company, the Trustee and the holders of the Securities shall
be restored respectively to their several positions and rights hereunder, and
all rights, remedies and powers of the Company, the Trustee and the holders of
the Securities shall continue as though no such proceeding had been taken.
SECTION 5.02. Payment of Securities on Default; Suit Therefor.
The Company covenants that (a) in case default shall be made in the payment
of any installment of interest (including Compounded Interest and Additional
Sums, if any) upon any of the Securities as and when the same shall become due
and payable, and such default shall have continued for a period of 30 days, or
(b) in case default shall be made in the payment of the principal of or premium,
if any, on any of the Securities as and when the same shall have become due and
payable, whether at maturity of the Securities or upon redemption or by
declaration or otherwise, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Securities, the whole
amount that then shall have become due and payable on all such Securities for
principal and premium, if any, or interest (including Compounded Interest and
Additional Sums, if any) or both, as the case may be, with interest upon the
overdue principal and premium, if any, and (to the extent that payment of such
interest is enforceable under applicable law and, if the Securities are held by
Dynegy Capital Trust or a trustee of such trust, without duplication of any
other amounts paid by Dynegy Capital Trust or a trustee in respect thereof) upon
the overdue installments of interest (including Compounded Interest and
Additional Sums, if any) at the rate borne by the
27
<PAGE>
Securities; and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including a reasonable
compensation to the Trustee, its agents, attorneys and counsel, and any other
amount due to the Trustee pursuant to Section 6.06.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the
Securities and collect in the manner provided by law out of the property of the
Company or any other obligor on the Securities wherever situated the moneys
adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Securities under Title
11, United States Code, or any other applicable law, or in case a receiver or
trustee shall have been appointed for the property of the Company or such other
obligor, or in the case of any other similar judicial proceedings relative to
the Company or other obligor upon the Securities, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 5.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of principal
premium, if any, and interest (including Compounded Interest and Additional
Sums, if any) owing and unpaid in respect of the Securities and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for amounts due to the Trustee pursuant to 6.06) and of the
Securityholders allowed in such judicial proceedings relative to the Company or
any other obligor on the Securities, or to the creditors or property of the
Company or such other obligor, unless prohibited by applicable law and
regulations, to vote on behalf of the holders of the Securities in any election
of a trustee or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and to collect and receive any moneys or
other property payable or deliverable on any such claims, and to distribute the
same after the deduction of its charges and expenses; and any receiver, assignee
or trustee in bankruptcy or reorganization is hereby authorized by each of the
Securityholders to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee such amounts as shall be sufficient to
cover reasonable compensation to the Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel, and all other amounts due to the
Trustee pursuant to Section 6.06.
Nothing herein contained shall be construed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any holder thereof or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
28
<PAGE>
All rights of action and of asserting claims under this Indenture, or under
any of the Securities, may be enforced by the Trustee without the possession of
any of the Securities, or the production thereof on any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall be for the ratable benefit of the holders of the
Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Securities, and it shall not be necessary to make any holders of the
Securities parties to any such proceedings.
SECTION 5.03. Application of Moneys Collected by Trustee.
Any moneys collected by the Trustee shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the Securities in respect of which moneys have
been collected, and stamping thereon the payment, if only partially paid, and
upon surrender thereof if fully paid:
First: To the payment of costs and expenses of collection applicable to
the Securities and all other amounts due to the Trustee under Section 6.06;
Second: To the payment of all Senior Indebtedness of the Company if and to
the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid upon Securities
for principal of (and premium, if any) and interest (including Compounded
Interest and Additional Sums, if any) on the Securities, in respect of which or
for the benefit of which money has been collected, ratably, without preference
of priority of any kind, according to the amounts due on such Securities for
principal (and premium, if any) and interest, respectively; and
Fourth: To the Company.
SECTION 5.04. Proceedings by Securityholders.
No holder of any Security shall have any right by virtue of or by availing
of any provision of this Indenture to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Indenture or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
such holder previously shall have given to the Trustee written notice of an
Event of Default and of the continuance thereof with respect to the Securities
specifying such Event of Default, as hereinbefore provided, and unless also the
holders of not less than 25% in aggregate principal amount of the Securities
then outstanding shall have made written request upon the Trustee to institute
such action, suit or proceeding in its own name as Trustee hereunder and shall
have offered to the Trustee such reasonable indemnity as it may require against
the costs, expenses and
29
<PAGE>
liabilities to be incurred therein or thereby, and the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity shall have failed to
institute any such action, suit or proceeding, it being understood and intended,
and being expressly covenanted by the taker and holder of every Security with
every other taker and holder and the Trustee, that no one or more holders of
Securities shall have any right in any manner whatever by virtue of or by
availing of any provision of this Indenture to affect, disturb or prejudice the
rights of any other holder of Securities, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Securities.
Notwithstanding any other provisions in this Indenture, however, the right
of any holder of any Security, which right is absolute and unconditional, to
receive payment of the principal of (premium, if any) and interest (including
Compounded Interest and Additional Sums, if any) on such Security, on or after
the same shall have become due and payable, or to institute suit for the
enforcement of any such payment, shall not be impaired or affected without the
consent of such holder and by accepting a Security hereunder it is expressly
understood, intended and covenanted by the taker and holder of every Security
with every other such taker and holder and the Trustee, that no one or more
holders of Securities shall have any right in any manner whatsoever by virtue or
by availing of any provision of this Indenture to affect, disturb or prejudice
the rights of the holders of any other Securities, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Securities. For the
protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
The Company and the Trustee acknowledge that pursuant to the Declaration,
the holders of Preferred Securities are entitled, in the circumstances and
subject to the limitations set forth therein, to commence a Direct Action with
respect to any Event of Default under this Indenture and the Securities.
SECTION 5.05. Proceedings by Trustee.
In case an Event of Default occurs with respect to Securities and is
continuing, the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
30
<PAGE>
SECTION 5.06. Remedies Cumulative and Continuing.
All powers and remedies given by this Article V to the Trustee or to the
Securityholders shall, to the extent permitted by law, be deemed cumulative and
not exclusive of any other powers and remedies available to the Trustee or the
holders of the Securities, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to the Securities, and no delay
or omission of the Trustee or of any holder of any of the Securities to exercise
any right or power accruing upon any Event of Default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 5.04, every power and remedy given by this Article V or by
law to the Trustee or to the Securityholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the
Securityholders.
SECTION 5.07. Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders.
The holders of a majority in aggregate principal amount of the Securities
at the time outstanding shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee; provided, however, that
such direction shall not be in conflict with any rule or law or with this
Indenture and, (subject to the provisions of Section 6.01) the Trustee shall
have the right to decline to follow any such direction if the Trustee shall
determine that the action so directed would be unjustly prejudicial to the
holders not taking part in such direction or if the Trustee being advised by
counsel determines that the action or proceeding so directed may not lawfully be
taken or if the Trustee in good faith by its board of directors or trustees,
executive committee, or a trust committee of directors or trustees and/or
Responsible Officers shall determine that the action or proceedings so directed
would involve the Trustee in personal liability. Prior to any declaration
accelerating the maturity of the Securities, the holders of a majority in
aggregate principal amount of the Securities at the time outstanding may on
behalf of the holders of all of the Securities waive any past default or Event
of Default and its consequences except a default (a) in the payment of principal
of or premium, if any, or interest (including Compounded Interest and Additional
Sums, if any) on any of the Securities or (b) in respect of covenants or
provisions hereof which cannot be modified or amended without the consent of the
holder of each Security affected; provided, however, that if the Securities are
held by the Property Trustee, such waiver or modification to such waiver shall
not be effective until the holders of a majority in aggregate liquidation amount
of Trust Securities shall have consented to such waiver or modification to such
waiver; provided further, that if the consent of the holder of each outstanding
Security is required, such waiver shall not be effective until each holder of
the Trust Securities shall have consented to such waiver. Upon any such waiver,
the default covered thereby shall be deemed to be cured for all purposes of this
Indenture and the Company, the Trustee and the holders of the Securities shall
be restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon. Whenever any default or Event of Default hereunder shall
31
<PAGE>
have been waived as permitted by this Section 5.07, said default or Event of
Default shall for all purposes of the Securities and this Indenture be deemed to
have been cured and to be not continuing.
SECTION 5.08. Notice of Defaults.
(a) The Trustee shall, within 90 days after the occurrence of a
default with respect to the Securities known to a Responsible Officer of
the Trustee, mail to all Securityholders, as the names and addresses of
such holders appear upon the Security Register, notice of all defaults
known to the Trustee, unless such defaults shall have been cured before the
giving of such notice (the term "defaults" for the purpose of this Section
5.08 being hereby defined to be the events specified in clauses (a), (b),
(c), (d) and (e) of Section 5.01, not including periods of grace, if any,
provided for therein, and irrespective of the giving of written notice
specified in clause (c) of Section 5.01); and provided that, except in the
case of default in the payment of the principal of or premium, if any, or
interest (including Compounded Interest or Additional Sums, if any) on any
of the Securities, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee,
or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in
the interests of the Securityholders; and provided further, that in the
case of any default of the character specified in Section 5.01(c) no such
notice to Securityholders shall be given until at least 60 days after the
occurrence thereof but shall be given within 90 days after such occurrence.
(b) Within five Business Days after the occurrence of any Event of
Default actually known to the Trustee, the Trustee shall transmit notice of
such Event of Default to all Securityholders, unless such Event of Default
shall have been cured or waived.
SECTION 5.09. Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section 5.09 shall not apply to any suit instituted by
the Company or the Trustee; to any suit instituted by any Securityholder, or
group of Securityholders, holding in the aggregate more than 10% in aggregate
principal amount of the Securities outstanding; or to any suit instituted by
any Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest (including Compounded Interest and Additional Sums,
if any) on any Security against the Company on or after the same shall have
become due and payable.
32
<PAGE>
SECTION 5.10. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and 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
CONCERNING THE TRUSTEE
----------------------
SECTION 6.01. Duties and Responsibilities of Trustee.
With respect to the holders of the Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture. In case an Event of Default has occurred (which has not been cured
or waived) the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred,
(i) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture and the Trust
Indenture Act, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Indenture or in the Trust Indenture Act, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but, in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
33
<PAGE>
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith, in accordance with the
direction of the Securityholders pursuant to Section 5.07, relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or liability is not reasonably assured to it under the
terms of this Indenture or adequate indemnity against such risk is not
reasonably assured to it.
SECTION 6.02. Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, note,
debenture or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein may be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any Board Resolution may be evidenced to the Trustee by a copy thereof
certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders, pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable and sufficient security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby;
34
<PAGE>
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture; nothing
contained herein shall, however, relieve the Trustee of the obligation,
upon the occurrence of an Event of Default (that has not been cured or
waived), to exercise such of the rights and powers vested in it by this
Indenture, and to use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, debenture, coupon or other paper or document, unless requested in
writing to do so by the holders of a majority in aggregate principal amount
of the outstanding Securities; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expense or liability as a
condition to so proceeding;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents
(including any Authenticating Agent) or attorneys, and the Trustee shall
not be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed by it with due care;
(h) the Trustee shall not be charged with knowledge of any Default or
Event of Default with respect to the Securities unless (1) such default is
a default under Sections 5.01(a) (other than a default with respect to the
payment of Compounded Interest or Additional Sums) and 5.01(b) of the
Indenture, (2) a Responsible Officer shall have actual knowledge of such
Default or Event of Default or (3) written notice of such Default or Event
of Default shall have been given to the Trustee by the Company or any other
obligor on the Securities or by any holder of the Securities; and
(i) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith, without negligence or willful misconduct and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Indenture.
SECTION 6.03. No Responsibility for Recitals, etc.
The recitals contained herein and in the Securities (except in the
certificate of authentication of the Trustee or the Authenticating Agent) shall
be taken as the statements of the Company and the Trustee and the Authenticating
Agent assume no responsibility for the correctness of the same. The Trustee and
the Authenticating Agent make no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee and the
Authenticating Agent shall not be accountable for the use or application by the
Company of any Securities or the proceeds of any Securities
35
<PAGE>
authenticated and delivered by the Trustee or the Authenticating Agent in
conformity with the provisions of this Indenture.
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Securities.
The Trustee or any Authenticating Agent or any paying agent or any transfer
agent or any Security registrar, in its individual or any other capacity, may
become the owner or pledgee of Securities with the same rights it would have if
it were not Trustee, Authenticating Agent, paying agent, transfer agent or
Security registrar.
SECTION 6.05. Moneys to be Held in Trust.
Subject to the provisions of Section 11.04, all moneys received by the
Trustee or any paying agent shall, until used or applied as herein provided, be
held in trust for the purpose for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
and any paying agent shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
So long as no Event of Default shall have occurred and be continuing, all
interest allowed on any such moneys shall be paid from time to time upon the
written order of the Company, signed by the Chairman of the Board of Directors,
the President, a Vice President, the Treasurer or an Assistant Treasurer of the
Company.
SECTION 6.06. Compensation and Expenses of Trustee.
The Company, as issuer of Securities under this Indenture, covenants and
agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, such compensation as shall be agreed to in writing between the
Company and the Trustee (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust), and the Company
will pay or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Company also covenants to indemnify
each of the Trustee or any predecessor Trustee (and its officers, agents,
directors and employees) for, and to hold it harmless against, any and all loss,
damage, claim, liability or expense including taxes (other than taxes based on
the income of the Trustee) incurred without negligence or bad faith on the part
of the Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim of liability in the premises. The obligations of the
Company under this Section 6.06 to compensate and indemnify the Trustee and to
pay or reimburse the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder. Such additional indebtedness
shall be secured by a lien prior to that of the Securities upon all property and
funds held or collected by the Trustee as such, except funds held in trust for
the benefit of the holders of particular Securities.
36
<PAGE>
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 5.01(d) or Section 5.01(e), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the resignation or removal of
the Trustee and the defeasance or other termination of this Indenture.
SECTION 6.07. Officers' Certificate as Evidence.
Except as otherwise provided in Sections 6.01 and 6.02, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action hereunder, such matter (unless other evidence in respect
thereof is herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken or omitted by
it under the provisions of this Indenture upon the faith thereof.
SECTION 6.08. Conflicting Interest of Trustee.
If the Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.
SECTION 6.09. Eligibility of Trustee.
The Trustee hereunder shall at all times be a corporation organized and
doing business under the laws of the United States of America or any state or
territory thereof or of the District of Columbia or a corporation or other
Person permitted to act as trustee by the Commission authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000) and subject to supervision or
examination by federal, state, territorial, or District of Columbia authority.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 6.09 the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
The Company may not, nor may any Person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee.
37
<PAGE>
In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.09, the Trustee shall resign immediately
in the manner and with the effect specified in Section 6.10.
SECTION 6.10. Resignation or Removal of Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign by giving written notice of such resignation to the
Company and by mailing notice thereof to the holders of the Securities at
their addresses as they shall appear on the Security register. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee or trustees by written instrument, in duplicate, one copy
of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 60 days after the mailing of
such notice of resignation to the affected Securityholders, the resigning
Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Securityholder who has been a
bona fide holder of a Security for at least six months may, subject to the
provisions of Section 5.09, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may
deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 6.08 after written request therefor by the Company or by any
Securityholder who has been a bona fide holder of a Security or
Securities for at least six months, or
(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 6.09 and shall fail to resign after written
request therefor by the Company or by any such Securityholder, or
(iii) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then, in any
such case, the Company may remove the Trustee and appoint a successor
trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy
to the successor trustee, or, subject to the provisions of Section
5.09, any Securityholder who has been a bona fide holder of a Security
for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor trustee.
Such court may thereupon, after such
38
<PAGE>
notice, if any, as it may deem proper, remove the Trustee and appoint
a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities at the time outstanding may at any time remove the Trustee and
nominate a successor trustee, which shall be deemed appointed as successor
trustee unless within 10 days after such nomination the Company objects
thereto or if no successor trustee shall have been so appointed and shall
have accepted appointment within 30 days after such removal, in which case
the Trustee so removed or any Securityholder, upon the terms and conditions
and otherwise as in subsection (a) of this Section 6.10 provided, may
petition any court of competent jurisdiction for an appointment of a
successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 6.10
shall become effective only upon acceptance of appointment by the successor
trustee as provided in Section 6.11.
SECTION 6.11. Acceptance by Successor Trustee.
Any successor trustee appointed as provided in Section 6.10 shall execute,
acknowledge and deliver to the Company and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the retiring trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as trustee herein; but, nevertheless, on
the written request of the Company or of the successor trustee, the trustee
ceasing to act shall, upon payment of any amounts then due it pursuant to the
provisions of Section 6.06, execute and deliver an instrument transferring to
such successor trustee all the rights and powers of the trustee so ceasing to
act and shall duly assign, transfer and deliver to such successor trustee all
property and money held by such retiring trustee thereunder. Upon request of
any such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property or funds held or collected by such
trustee to secure any amounts then due it pursuant to the provisions of Section
6.06.
No successor trustee shall accept appointment as provided in this Section
6.11 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 6.08 and eligible under the provisions
of Section 6.09.
Upon acceptance of appointment by a successor trustee as provided in this
Section 6.11, the Company shall mail notice of the succession of such trustee
hereunder to the holders of Securities at their addresses as they shall appear
on the Security register. If the Company fails to mail such notice within 10
days after the acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Company.
39
<PAGE>
SECTION 6.12. Succession by Merger, etc.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder without
the execution or filing of any paper or any further act on the part of any of
the parties hereto provided such corporations shall be otherwise qualified and
eligible under this Article.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any Securities shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor trustee; and in all such cases such certificates shall have the full
force which the Securities or this Indenture elsewhere provides that the
certificate of the Trustee shall have; provided, however, that the right to
adopt the certificate of authentication of any predecessor Trustee or
authenticate Securities in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
SECTION 6.13. Limitation on Rights of Trustee as a Creditor.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship described in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent included therein.
SECTION 6.14. Authenticating Agents.
There may be one or more Authenticating Agents appointed by the Trustee
upon the request of the Company with power to act on its behalf and subject to
its direction in the authentication and delivery of Securities issued upon
exchange or transfer thereof as fully to all intents and purposes as though any
such Authenticating Agent had been expressly authorized to authenticate and
deliver Securities; provided, that the Trustee shall have no liability to the
Company for any acts or omissions of the Authenticating Agent with respect to
the authentication and delivery of Securities. Any such Authenticating Agent
shall at all times be a corporation organized and doing business under the laws
of the United States or of any state or territory thereof or of the District of
Columbia authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of at least $50,000,000 and being subject to
supervision or examination by federal, state, territorial or District of
Columbia authority. If such corporation publishes reports of condition at least
annually pursuant to law or the requirements of such authority, then for the
purposes of this Section 6.14 the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time an
Authenticating Agent shall
40
<PAGE>
cease to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect herein specified in this
Section.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of such Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section 6.14 without the execution or filing of any paper or any further act on
the part of the parties hereto or such Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any Authenticating Agent shall cease to be eligible under this Section 6.14, the
Trustee may, and upon the request of the Company shall, promptly appoint a
successor Authenticating Agent eligible under this Section 6.14, shall give
written notice of such appointment to the Company and shall mail notice of such
appointment to all Securityholders as the names and addresses of such holders
appear on the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all rights,
powers, duties and responsibilities of its predecessor hereunder, with like
effect as if originally named as Authenticating Agent herein.
The Company, as borrower, agrees to pay to any Authenticating Agent from
time to time reasonable compensation for its services. Any Authenticating Agent
shall have no responsibility or liability for any action taken by it as such in
accordance with the directions of the Trustee.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
------------------------------
SECTION 7.01. Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a specified
percentage in aggregate principal amount of the Securities may take any action
(including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action) the fact that at the time
of taking any such action the holders of such specified percentage have joined
therein may be evidenced (a) by any instrument or any number of instruments of
similar tenor executed by such Securityholders in person or by agent or proxy
appointed in writing, or (b) by the record of such holders of Securities voting
in favor thereof at any meeting of such Securityholders duly called and held in
accordance with the provisions of Article VIII, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of such
Securityholders.
41
<PAGE>
If the Company shall solicit from the Securityholders any request, demand,
authorization, direction, notice, consent, waiver or other action, the Company
may, at its option, as evidenced by an Officers' Certificate, fix in advance a
record date for the determination of Securityholders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
action, but the Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other action may be given before or after the record date, but only
the Securityholders of record at the close of business on the record date shall
be deemed to be Securityholders for the purposes of determining whether
Securityholders of the requisite proportion of outstanding Securities have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the
outstanding Securities shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such
Securityholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.
SECTION 7.02. Proof of Execution by Securityholders.
Subject to the provisions of Section 6.01, 6.02 and 8.05, proof of the
execution of any instrument by a Securityholder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee. The ownership of Securities shall be proved by the Security
Register or by a certificate of the Security registrar. The Trustee may require
such additional proof of any matter referred to in this Section as it shall deem
necessary.
The record of any Securityholders' meeting shall be proved in the manner
provided in Section 8.06.
SECTION 7.03. Who Are Deemed Absolute Owners.
Prior to due presentment for registration of transfer of any Security, the
Company, the Trustee, any Authenticating Agent, any paying agent, any transfer
agent and any Security registrar may deem the person in whose name such Security
shall be registered upon the Security Register to be, and may treat him as, the
absolute owner of such Security (whether or not such Security shall be overdue)
for the purpose of receiving payment of or on account of the principal of and
premium, if any, and (subject to Section 2.05) interest on such Security and for
all other purposes; and neither the Company nor the Trustee nor any
Authenticating Agent nor any paying agent nor any transfer agent nor any
Security registrar shall be affected by any notice to the contrary. All such
payments so made to any holder for the time being or upon his order shall be
valid, and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Security.
42
<PAGE>
SECTION 7.04. Securities Owned by Company Deemed Not Outstanding.
In determining whether the holders of the requisite aggregate principal
amount of Securities have concurred in any direction, consent, notice or waiver
under this Indenture, Securities which are owned by the Company or any other
obligor on the Securities or any Affiliate of the Company (other than the Trust)
or any other obligor on the Securities shall be disregarded and deemed not to be
outstanding for the purpose of any such determination; provided that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only Securities which a Responsible Officer
of the Trustee actually knows are so owned shall be so disregarded. Securities
so owned which have been pledged in good faith may be regarded as outstanding
for the purposes of this Section 7.04 if the pledgee shall establish to the
satisfaction of the Trustee the pledgee's right to vote such Securities and that
the pledgee is not the Company or any such other obligor or Affiliate of the
Company or any such other obligor. In the case of a dispute as to such right,
any decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.
SECTION 7.05. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 7.01, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Securities specified in this
Indenture in connection with such action, any holder of a Security (or any
Security issued in whole or in part in exchange or substitution therefor),
subject to Section 7.01, the serial number of which is shown by the evidence to
be included in the Securities the holders of which have consented to such action
may, by filing written notice with the Trustee at its principal office and upon
proof of holding as provided in Section 7.02, revoke such action so far as
concerns such Security (or so far as concerns the principal amount represented
by any exchanged or substituted Security). Except as aforesaid any such action
taken by the holder of any Security shall be conclusive and binding upon such
holder and upon all future holders and owners of such Security, and of any
Security issued in exchange or substitution therefor, irrespective of whether or
not any notation in regard thereto is made upon such Security or any Security
issued in exchange or substitution therefor.
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
-------------------------
SECTION 8.01. Purposes of Meetings.
A meeting of Securityholders may be called at any time and from time to
time pursuant to the provisions of this Article VIII for any of the following
purposes:
(a) to give any notice to the Company or to the Trustee, or to give
any directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences,
43
<PAGE>
or to take any other action authorized to be taken by Securityholders
pursuant to any of the provisions of Article V;
(b) to remove the Trustee and nominate a successor trustee pursuant to
the provisions of Article VI;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.02; or
(d) to take any other action authorized to be taken by or on behalf of
the holders of any specified aggregate principal amount of such Securities
under any other provision of this Indenture or under applicable law.
SECTION 8.02. Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Securityholders to take any
action specified in Section 8.01, to be held at such time and at such place in
the Borough of Manhattan, The City of New York, as the Trustee shall determine.
Notice of every meeting of the Securityholders, setting forth the time and the
place of such meeting and in general terms the action proposed to be taken at
such meeting, shall be mailed to holders of Securities at their addresses as
they shall appear on the Securities Register. Such notice shall be mailed not
less than 20 nor more than 180 days prior to the date fixed for the meeting.
SECTION 8.03. Call of Meetings by Company or Securityholders.
In case at any time the Company pursuant to a resolution of the Board of
Directors, or the holders of at least 10% in aggregate principal amount of the
Securities then outstanding, shall have requested the Trustee to call a meeting
of Securityholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such request,
then the Company or such Securityholders may determine the time and the place in
said Borough of Manhattan for such meeting and may call such meeting to take any
action authorized in Section 8.01, by mailing notice thereof as provided in
Section 8.02.
SECTION 8.04. Qualifications for Voting.
To be entitled to vote at any meeting of Securityholders a Person shall (a)
be a holder of one or more Securities or (b) a Person appointed by an instrument
in writing as proxy by a holder of one or more Securities. The only Persons who
shall be entitled to be present or to speak at any meeting of Securityholders
shall be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
44
<PAGE>
SECTION 8.05. Regulations.
Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Securityholders, in regard to proof of the holding of Securities and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote of the meeting.
Subject to the provisions of Section 8.04, at any meeting each holder of
Securities or proxy therefor shall be entitled to one vote for each $1,000
principal amount of Securities held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Securities held by him or instruments in writing as aforesaid duly
designating him as the person to vote on behalf of other Securityholders. Any
meeting of Securityholders duly called pursuant to the provisions of Section
8.02 or 8.03 may be adjourned from time to time by a majority of those present,
and the meeting may be held as so adjourned without further notice.
SECTION 8.06. Voting.
The vote upon any resolution submitted to any meeting of holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of such holders or of their representatives by proxy and the serial
number or numbers of the Securities held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
triplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Securityholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 8.02. The record shall show the serial numbers of the
Securities voting in favor of or against any resolution. The record shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
45
<PAGE>
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
ARTICLE IX
SUPPLEMENTAL INDENTURES
-----------------------
SECTION 9.01. Without Consent of Securityholders.
The Company, when authorized by a Board Resolution, and the Trustee may
from time to time and at any time enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, without the consent of the
Securityholders, for one or more of the following purposes:
(a) to evidence the succession of another Person to the Company, or
successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company herein and in the
Securities pursuant to Article X hereof;
(b) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the Securityholders as the
Board of Directors and the Trustee shall consider to be for the protection
of the Securityholders, and to make the occurrence, or the occurrence and
continuance, of a default in any of such additional covenants, restrictions
or conditions a default or an Event of Default permitting the enforcement
of all or any of the remedies provided in this Indenture as herein set
forth; provided, however, that in respect of any such additional covenant,
restriction or condition such amendment may provide for a particular period
of grace after default (which period may be shorter or longer than that
allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the
Trustee upon such default;
(c) to provide for the issuance under this Indenture of Securities in
coupon form (including Securities registrable as to principal only) and to
provide for exchangeability of such Securities with the Securities issued
hereunder in fully registered form and to make all appropriate changes for
such purpose;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture; provided that any such
action shall not materially adversely affect the interests of the holders
of the Securities;
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities;
46
<PAGE>
(f) to make provision for transfer procedures, certification, book-
entry provisions, the form of restricted securities legends, if any, to be
placed on Securities, and all other matters required pursuant to Section
2.06 or otherwise necessary, desirable or appropriate in connection with
the issuance of Securities to holders of Preferred Securities in the event
of a distribution of Securities by Dynegy Capital Trust following a
Dissolution Event;
(g) to qualify or maintain qualification of this Indenture under the
Trust Indenture Act; or
(h) to make any change that does not adversely affect the rights of
any Securityholder in any material respect.
The Trustee is hereby authorized to join with the Company in the execution
of any supplemental indenture to effect such amendment, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer and assignment of any property thereunder, but
the Trustee shall not be obligated to, but may in its discretion, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any amendment to the Indenture authorized by the provisions of this Section
9.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Securities at the time outstanding, notwithstanding any of
the provisions of Section 9.02.
SECTION 9.02. With Consent of Securityholders.
With the consent (evidenced as provided in Section 7.01) of the holders of
a majority in aggregate principal amount of the Securities at the time
outstanding, the Company, when authorized by a Board Resolution, and the Trustee
may from time to time and at any time 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 the Securities; provided,
however, that no such amendment shall without the consent of the holders of each
Security then outstanding and affected thereby (i) change the Maturity Date of
any Security, or reduce the rate of interest (including Compounded Interest) or
extend the time of payment of interest thereon (except as contemplated by
Article XVI), or reduce the principal amount thereof or the amount of premium
thereon, if any, or reduce any amount payable on redemption thereof, or make
the principal thereof or any interest or premium thereon payable in any coin or
currency other than that provided in the Securities, or impair or affect the
right of any Securityholder to institute suit for payment thereof, (ii) modify
the provisions of this Indenture with respect to the subordination of the
Securities in a manner adverse to the holders, (iii) reduce the aforesaid
percentage of Securities the holders of which are required to consent to any
such amendment to the 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)
47
<PAGE>
provided for in this Indenture or (iv) modify any of the provisions of the first
paragraph of this Section 9.02, or the second sentence of Section 5.07, 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 outstanding Security affected thereby; provided, however, that if the
Securities are held by Dynegy Capital Trust, such amendment shall not be
effective until the holders of a majority in liquidation amount of Trust
Securities shall have consented to such amendment; provided, further, that if
the consent of the holder of each outstanding Security is required, such
amendment shall not be effective until each holder of the Trust Securities shall
have consented to such amendment.
Upon the request of the Company accompanied by a copy of a resolution of
the Board of Directors certified by its Secretary or Assistant Secretary
authorizing the execution of any supplemental indenture affecting such
amendment, and upon the filing with the Trustee of evidence of the consent of
Securityholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, prepared by the
Company, setting forth in general terms the substance of such supplemental
indenture, to the Securityholders as their names and addresses appear upon the
Security Register. Any failure of the Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under this
Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 9.03. Compliance with Trust Indenture Act; Effect of Supplemental
Indentures.
Any supplemental indenture executed pursuant to the provisions of this
Article IX shall comply with the Trust Indenture Act. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article IX, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Securities shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
48
<PAGE>
SECTION 9.04. Notation on Securities.
Securities authenticated and delivered after the execution of any
supplemental indenture affecting such series pursuant to the provisions of this
Article IX may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee
shall so determine, new Securities so modified as to conform, in the opinion of
the Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by the
Company, authenticated by the Trustee or the Authenticating Agent and delivered
in exchange for the Securities then outstanding.
SECTION 9.05. Evidence of Compliance of Supplemental Indenture to be
Furnished Trustee.
The Trustee, subject to the provisions of Sections 6.01 and 6.02, may
receive, in addition to the document required by Section 13.06, an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant hereto complies with the requirements
of this Article IX.
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
-------------------------------------------------
SECTION 10.01. Company May Consolidate, etc., on Certain Terms.
Nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of the Company with or into any other Person
(whether or not affiliated with the Company, as the case may be), or successive
consolidations or mergers in which the Company or its successor or successors,
as the case may be, shall be a party or parties, or shall prevent any sale,
conveyance, transfer or lease of the property of the Company, or its successor
or successors as the case may be, as an entirety, or substantially as an
entirety, to any other Person (whether or not affiliated with the Company, or
its successor or successors, as the case may be) authorized to acquire and
operate the same; provided, that (a) the Company is the surviving Person, or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, conveyance, transfer or lease of property is
made is a Person organized and existing under the laws of the United States or
any State thereof or the District of Columbia, and (b) upon any such
consolidation, merger, sale, conveyance, transfer or lease, the due and punctual
payment of the principal of (and premium, if any) and interest on the Securities
according to their tenor and the due and punctual performance and observance of
all the covenants and conditions of this Indenture to be kept or performed by
the Company shall be expressly assumed, by supplemental indenture (which shall
conform to the provisions of the Trust Indenture Act, as then in effect)
satisfactory in form to the Trustee executed and delivered to the Trustee by the
Person formed by such consolidation, or into which the Company shall have been
merged, or by the Person which shall have acquired such property, as the case
may be and (c) after giving effect to such consolidation, merger, sale,
49
<PAGE>
conveyance, transfer or lease, no Default or Event of Default shall have
occurred and be continuing.
SECTION 10.02. Successor Corporation to be Substituted for Company.
In case of any such consolidation, merger, conveyance or transfer and upon
the assumption by the successor corporation, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the due
and punctual payment of the principal of and premium, if any, and interest
(including any Additional Sums or Compounded Interest) on all of the Securities
and the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed or observed by the Company, such
successor Person shall succeed to and be substituted for the Company, with the
same effect as if it had been named herein as the party of the first part, and
the Company thereupon shall be relieved of any further liability or obligation
hereunder or upon the Securities. Such successor Person thereupon may cause to
be signed, and may issue either in its own name or in the name of Dynegy Inc.
any or all of the Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee or the Authenticating
Agent; and, upon the order of such successor Person instead of the Company and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee or the Authenticating Agent shall authenticate and
deliver any Securities which previously shall have been signed and delivered by
the officers of the Company to the Trustee or the Authenticating Agent for
authentication, and any Securities which such successor Person thereafter shall
cause to be signed and delivered to the Trustee or the Authenticating Agent for
that purpose. All the Securities so 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 Indentures had been issued at the date of the execution hereof.
SECTION 10.03. Opinion of Counsel to be Given Trustee.
The Trustee, subject to the provisions of Sections 6.01 and 6.02, may
receive an Opinion of Counsel as conclusive evidence that any consolidation,
merger, sale, conveyance, transfer or lease, and any assumption, permitted or
required by the terms of this Article X complies with the provisions of this
Article X.
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
---------------------------------------
SECTION 11.01. Discharge of Indenture.
When (a) the Company shall deliver to the Trustee for cancellation all
Securities theretofore authenticated (other than any Securities which shall have
been destroyed, lost or stolen and which shall have been replaced as provided in
Section 2.07) and not theretofore canceled, or (b) all the Securities not
theretofore canceled or delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for
50
<PAGE>
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds sufficient to pay on the Maturity Date or upon
redemption all of the Securities (other than any Securities which shall have
been destroyed, lost or stolen and which shall have been replaced as provided in
Section 2.07) not theretofore canceled or delivered to the Trustee for
cancellation, including principal and premium, if any, and interest (including
Compounded Interest and Additional Sums, if any) due or to become due to the
Maturity Date or redemption date, as the case may be, but excluding, however,
the amount of any moneys for the payment of principal of or premium, if any, or
interest (including Compounded Interest and Additional Sums, if any) on the
Securities (1) theretofore repaid to the Company in accordance with the
provisions of Section 11.04, or (2) paid to any State or to the District of
Columbia pursuant to its unclaimed property or similar laws, and if in either
case the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company, then this Indenture shall cease to be of further
effect except for the provisions of Sections 2.02, 2.06, 2.07, 3.01, 3.02, 3.04,
6.06, 6.10 and 11.04 hereof, which shall survive until such Securities shall
mature and be paid. Thereafter, Sections 6.06, 6.10 and 11.04 shall survive, and
the Trustee, on demand of the Company accompanied by any Officers' Certificate
and an Opinion of Counsel and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture, the Company, however, hereby agreeing to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the Trustee
in connection with this Indenture or the Securities.
SECTION 11.02. Deposited Moneys and U.S. Government Obligations to be
Held in Trust by Trustee.
Subject to the provisions of Section 11.04, all moneys and U.S. Government
Obligations deposited with the Trustee pursuant to Sections 11.01 or 11.05 shall
be held in trust and applied by it to the payment, either directly or through
any paying agent (including the Company if acting as its own paying agent), to
the holders of the particular Securities for the payment of which such moneys or
U.S. Government Obligations have been deposited with the Trustee, of all sums
due and to become due thereon for principal, premium, if any, and interest.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 11.05 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the holders of outstanding Securities.
SECTION 11.03. Paying Agent to Repay Moneys Held.
Upon the satisfaction and discharge of this Indenture all moneys then held
by any paying agent of the Securities (other than the Trustee) shall, upon
written demand of the Company, be repaid to it or paid to the Trustee, and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.
51
<PAGE>
SECTION 11.04. Return of Unclaimed Moneys.
Any moneys deposited with or paid to the Trustee or any paying agent for
payment of the principal of or premium, if any, or interest on Securities and
not applied but remaining unclaimed by the holders of Securities for two years
after the date upon which the principal of or premium, if any, or interest
(including Compounded Interest and Additional Sums, if any) on such Securities,
as the case may be, shall have become due and payable, shall be repaid to the
Company by the Trustee or such paying agent on written demand; and the holder of
any of the Securities shall thereafter look only to the Company for any payment
which such holder may be entitled to collect and all liability of the Trustee or
such paying agent with respect to such moneys shall thereupon cease.
SECTION 11.05. Defeasance Upon Deposit of Moneys or U.S. Government
Obligations.
The Company shall be deemed to have been Discharged (as defined below) from
its obligations with respect to the Securities on the 91st day after the
applicable conditions set forth below have been satisfied:
(a) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee or the Defeasance Agent (as defined below) as
trust funds in trust, specifically pledged as security for, and dedicated
solely to, the benefit of the holders of the Securities (i) money in an
amount, or (ii) U.S. Government Obligations which through the payment of
interest and principal in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment,
money in an amount, or (iii) a combination of (i) and (ii), sufficient, in
the opinion (with respect to (ii) and (iii)) of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee and the Defeasance Agent, if any, to pay
and discharge each installment of principal of and interest and premium, if
any, on the outstanding Securities on the dates such installments of
principal, interest or premium are due;
(b) if the Securities are then listed on any national securities
exchange, the Company shall have delivered to the Trustee and the
Defeasance Agent, if any, an Opinion of Counsel to the effect that the
exercise of the option under this Section 11.05 would not cause such
Securities to be delisted from such exchange;
(c) no Default or Event of Default with respect to the Securities
shall result from such deposit or shall have occurred and be continuing on
the date of such deposit; and
(d) the Company shall have delivered to the Trustee and the Defeasance
Agent, if any, an Opinion of Counsel to the effect that holders of the
Securities will not recognize income, gain or loss for United States
federal income tax purposes as a result of the exercise of the option under
this Section 11.05 and will be subject to United States federal income tax
52
<PAGE>
on the same amount and in the same manner and at the same times as would
have been the case if such option had not been exercised, and such opinion
shall be based on a statute so providing or be accompanied by a private
letter ruling to that effect received from the United States Internal
Revenue Service or a revenue ruling pertaining to a comparable form of
transaction to that effect published by the United States Internal Revenue
Service.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Securities and to have satisfied all the obligations under this Indenture
relating to the Securities (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except (A) the rights
of holders of Securities to receive, from the trust fund described in clause (1)
above, payment of the principal of and the interest and premium, if any, on the
Securities when such payments are due; (B) the Company's obligations with
respect to the Securities under Sections 2.06, 2.07, 5.02 and 11.04; and (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder.
"Defeasance Agent" means another financial institution which is eligible to
act as Trustee hereunder and which assumes all of the obligations of the Trustee
necessary to enable the Trustee to act hereunder. In the event such a
Defeasance Agent is appointed pursuant to this Section, the following conditions
shall apply:
(a) The Trustee shall have approval rights over the document
appointing such Defeasance Agent and the document setting forth such
Defeasance Agent's rights and responsibilities;
(b) The Defeasance Agent shall provide verification to the Trustee
acknowledging receipt of sufficient money and/or U. S. Government
Obligations to meet the applicable conditions set forth in this Section
11.05.
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
----------------------------------------
OFFICERS AND DIRECTORS
----------------------
SECTION 12.01. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or
interest on any Security, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture, or in any Security, or because of the creation of
any indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor Person to the Company, either directly or through
the Company or any successor Person to the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such
53
<PAGE>
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the
Securities.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
------------------------
SECTION 13.01. Successors.
All the covenants, stipulations, promises and agreements in this Indenture
contained by the Company shall bind its successors and assigns whether so
expressed or not.
SECTION 13.02. Official Acts by Successor Corporation.
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.
SECTION 13.03. Surrender of Company Powers.
The Company by instrument in writing executed by authority of 2/3 (two-
thirds) of its Board of Directors and delivered to the Trustee may surrender any
of the powers reserved to the Company, and thereupon such power so surrendered
shall terminate both as to the Company, as the case may be, and as to any
successor Person.
SECTION 13.04. Addresses for Notices, etc.
Any notice or demand which by any provision of this Indenture is required
or permitted to be given or served by the Trustee or by the holders of
Securities on the Company may be given or served by being deposited postage
prepaid by first class mail, registered or certified mail, overnight courier
service or conformed telecopy addressed (until another address is filed by the
Company with the Trustee for the purpose) to the Company at 1000 Louisiana,
Suite 5800, Houston, Texas 77002 Attention: Chief Financial Officer. Any
notice, direction, request or demand by any Securityholder to or upon the
Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made in writing at the office of the Trustee, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention:
Corporate Trust Administration (unless another address is provided by the
Trustee to the Company for such purpose). Any notice or communication to a
Securityholder shall be mailed by first class mail to his or her address shown
on the register kept by the Security Registrar.
54
<PAGE>
SECTION 13.05. GOVERNING LAW.
THIS INDENTURE AND EACH SECURITY SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE.
SECTION 13.06. Evidence of Compliance with Conditions Precedent.
Upon any application or request by the Company to the Trustee to take any
action under any of the provisions of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that in the opinion of the
signers all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture (except certificates delivered pursuant to Section 3.05) shall
include (1) a statement that the Person making such certificate or opinion has
read such covenant or condition; (2) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based; (3) a statement that, in the
opinion of such Person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and (4) a statement as to whether
or not, in the opinion of such person, such condition or covenant has been
complied with.
SECTION 13.07. Business Days.
In any case where the date of payment of principal of or premium, if any,
or interest on the Securities will not be a Business Day, the payment of such
principal of or premium, if any, or interest on the Securities need not be made
on such date but may be made on the next succeeding Business Day, with the same
force and effect as if made on the date of payment and no interest shall accrue
for the period from and after such date, except that if such next succeeding
Business Day falls in the next succeeding calendar year, then such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
SECTION 13.08. Trust Indenture Act to Control.
If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act of 1939, such imposed duties shall control.
55
<PAGE>
SECTION 13.09. Table of Contents, Headings, etc.
The table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
SECTION 13.10. Execution in Counterparts.
This Indenture may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute but one
and the same instrument.
SECTION 13.11. Separability.
In case any one or more of the provisions contained in this Indenture or in
the Securities shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of the Securities,
but this Indenture and the Securities shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.
SECTION 13.12. Assignment.
The Company will have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Company; provided that, in the event of any such
assignment, the Company will remain liable for all such obligations. Subject to
the foregoing, the Indenture is binding upon and inures to the benefit of the
parties thereto and their respective successors and assigns. This Indenture may
not otherwise be assigned by the parties thereto.
SECTION 13.13. Acknowledgment of Rights.
The Company acknowledges that, with respect to any Securities held by
Dynegy Capital Trust or a trustee of such trust, if the Property Trustee of such
Trust fails to enforce its rights under this Indenture as the holder of the
Securities held as the assets of Dynegy Capital Trust any holder of Preferred
Securities may, to the full extent permitted by law, institute legal proceedings
directly against the Company to enforce such Property Trustee's rights under
this Indenture without first instituting any legal proceedings against such
Property Trustee or any other person or entity. Notwithstanding the foregoing,
if an Event of Default has occurred and is continuing and such event is
attributable to the failure of the Company to pay principal of or premium, if
any, or interest on the Securities when due, the Company acknowledges that a
holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such holder of the principal of or premium, if any, or
interest on the Securities having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such holder on or after the
respective due date specified in the Securities.
56
<PAGE>
ARTICLE XIV
REDEMPTION OF SECURITIES
------------------------
SECTION 14.01. Special Event Redemption.
If, at any time, a Special Event has occurred and is continuing then,
notwithstanding Section 14.02(a), the Company shall have the right but not the
obligation, at any time within 90 days following the occurrence of such Special
Event, upon (i) not less than 45 days' written notice to the Trustee and (ii)
not less than 30 days' nor more than 60 days' written notice to the
Securityholders, to redeem the Securities, in whole (but not in part), at the
Special Event Redemption Price. Following a Special Event, if the Company wishes
to exercise its right of redemption pursuant to this Section 14.01, the Company
shall take such action as is necessary to promptly determine the Special Event
Redemption Price, including without limitation the appointment by the Company of
a Reference Treasury Dealer. The Company shall provide the Trustee with written
notice of the Special Event Redemption Price promptly after the calculation
thereof, which notice shall include any calculation made by the Reference
Treasury Dealer in connection with the determination of the Special Event
Redemption Price. The Special Event Redemption Price shall be paid prior to
12:00 noon, New York City time, on the date of such redemption or such earlier
time as the Company determines, provided that the Company shall deposit with the
Trustee an amount sufficient to pay the Special Event Redemption Price by 10:00
a.m., New York City time, on the date such Special Event Redemption Price is to
be paid.
SECTION 14.02. Optional Redemption by Company.
Subject to the provisions of this Article XIV, the Company shall have the
right to redeem the Securities, in whole or in part, from time to time, at a
redemption price equal to the Optional Redemption Price.
If the Securities are only partially redeemed pursuant to this Section
14.02, the Securities to be redeemed shall be selected on a pro rata basis not
more than 60 days prior to the date fixed for redemption from the outstanding
Securities not previously called for redemption; provided, however, that with
respect to Securityholders that would be required to hold Securities with an
aggregate principal amount of less than $100,000 but more than an aggregate
principal amount of zero as a result of such pro rata redemption, the Company
shall redeem Securities of each such Securityholder so that after such
redemption such Securityholder shall hold Securities either with an aggregate
principal amount of at least $100,000 or such Securityholder no longer holds any
Securities and shall use such method (including, without limitation, by lot) as
the Company shall deem fair and appropri ate; provided, further, that any such
proration may be made on the basis of the aggregate principal amount of
Securities held by each Securityholder and may be made by making such
adjustments as the Company deems fair and appropriate in order that only
Securities in denominations of $1,000 or integral multiples thereof shall be
redeemed. The Optional Redemption Price shall be paid prior to 12:00 noon, New
York City time, on the date of such redemption or at such earlier time as the
57
<PAGE>
Company determines; provided that the Company shall deposit with the Trustee an
amount sufficient to pay the Optional Redemption Price by 10:00 a.m., New York
City time, on the date such Optional Redemption Price is to be paid.
SECTION 14.03. No Sinking Fund.
The Securities are not entitled to the benefit of any sinking fund.
SECTION 14.04. Notice of Redemption; Selection of Securities.
In case the Company shall desire to exercise the right to redeem all, or,
as the case may be, any part of the Securities in accordance with their terms,
it shall fix a date for redemption and shall mail a notice of such redemption at
least 30 and not more than 60 days prior to the date fixed for redemption to the
holders of Securities so to be redeemed as a whole or in part at their last
addresses as the same appear on the Security Register. Such mailing shall be by
first class mail. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the holder of any Security designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security.
Each such notice of redemption shall specify the CUSIP number of the
Securities to be redeemed, the date fixed for redemption, the redemption price
at which the Securities are to be redeemed (or the method by which such
redemption price is to be calculated), the place or places of payment that
payment will be made upon presentation and surrender of the Securities, that
interest accrued to the date fixed for redemption will be paid as specified in
said notice, and that on and after said date interest thereon or on the portions
thereof to be redeemed will cease to accrue. If less than all the Securities
are to be redeemed the notice of redemption shall specify the numbers of the
Securities to be redeemed. In case any Security is to be redeemed in part only,
the notice of redemption shall state the portion of the principal amount thereof
to be redeemed and shall state that on and after the date fixed for redemption,
upon surrender of such Security, a new Security or Securities in principal
amount equal to the unredeemed portion thereof will be issued.
By 10:00 a.m. New York City time on the redemption date specified in the
notice of redemption given as provided in this Section, the Company will deposit
with the Trustee or with one or more paying agents an amount of money sufficient
to redeem on the redemption date all the Securities so called for redemption at
the appropriate Redemption Price, together with accrued interest to the date
fixed for redemption.
The Company will give the Trustee notice not less than 45 days prior to the
redemption date as to the aggregate principal amount of Securities to be
redeemed and the Trustee shall select, in such manner as in its sole discretion
it shall deem appropriate and fair, the Securities or portions thereof (in
integral multiples of $1,000, except as otherwise set forth in the applicable
form of Security) to be redeemed.
58
<PAGE>
SECTION 14.05. Payment of Securities Called for Redemption.
If notice of redemption has been given as provided in Section 14.04, the
Securities or portions of Securities with respect to which such notice has been
given shall become due and payable on the date and at the place or places stated
in such notice at the applicable Redemption Price, together with interest
accrued to the date fixed for redemption (subject to the rights of holders of
Securities on the close of business on a regular record date in respect of an
Interest Payment Date occurring on or prior to the redemption date), and on and
after said date (unless the Company shall default in the payment of such
Securities at the Redemption Price, together with interest accrued to said date)
interest (including Compounded Interest and Additional Sums, if any) on the
Securities or portions of Securities so called for redemption shall cease to
accrue. On presentation and surrender of such Securities at a place of payment
specified in said notice, the said Securities or the specified portions thereof
shall be paid and redeemed by the Company at the applicable Redemption Price,
together with interest (including Compounded Interest and Additional Sums, if
any) accrued thereon to the date fixed for redemption (subject to the rights of
holders of Securities on the close of business on a regular record date in
respect of an Interest Payment Date occurring on or prior to the redemption
date).
Upon presentation of any Security redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Security or Securities
of authorized denominations, in principal amount equal to the unredeemed portion
of the Security so presented.
ARTICLE XV
SUBORDINATION OF SECURITIES
---------------------------
SECTION 15.01. Agreement to Subordinate.
The Company covenants and agrees, and each holder of Securities issued
hereunder likewise covenants and agrees, that the Securities shall be issued
subject to the provisions of this Article XV; and each holder of a Security,
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.
The payment by the Company of the principal of, premium, if any, and
interest (including Compounded Interest and Additional Sums, if any) on all
Securities issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated and junior in right of payment to all Senior
Indebtedness, whether outstanding at the date of this Indenture or thereafter
incurred.
No provision of this Article XV shall prevent the occurrence of any Default
or Event of Default hereunder.
59
<PAGE>
SECTION 15.02. Default on Senior Indebtedness.
In the event and during the continuation of any default by the Company in
the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness, or in the event that the maturity of any Senior
Indebtedness has been accelerated because of a default, then, in either case, no
payment shall be made by the Company with respect to the principal (including
redemption payments) of or premium, if any, or interest on the Securities until
such default shall have been cured or waived in writing or shall have ceased to
exist or such Senior Indebtedness shall have been discharged or paid in full.
In the event of the acceleration of the maturity of the Securities, then no
payment shall be made by the Company with respect to the principal (including
redemption payments) of or premium, if any, or interest on the Securities until
the holders of all Senior Indebtedness outstanding at the time of such
acceleration shall receive payment in full of such Senior Indebtedness
(including any amounts due upon acceleration).
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Securityholder when such payment is prohibited by
the preceding paragraphs of this Section 15.02, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear.
SECTION 15.03. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding-up or liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all Senior Indebtedness of the Company shall
first be paid in full, or payment thereof provided for in money in accordance
with its terms, before any payment is made by the Company on account of the
principal (and premium, if any) or interest (including Compounded Interest and
Additional Sums, if any) on the Securities; and upon any such dissolution or
winding-up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which the Securityholders or the Trustee would
be entitled to receive from the Company, except for the provisions of this
Article XV, shall be paid by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Securityholders or by the Trustee under the Indenture if
received by them or it, directly to the holders of Senior Indebtedness of the
Company (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all such Senior Indebtedness in full, in money
60
<PAGE>
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Securityholders or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or any Securityholder before all Senior Indebtedness is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all such Senior Indebtedness in full in
money in accordance with its terms, after giving effect to any concurrent
payment or distribution to or for the benefit of the holders of such Senior
Indebtedness.
For purposes of this Article XV only, the words "assets of the Company of
any kind or character, whether cash, property or securities" shall not be deemed
to include shares of stock of the Company as reorganized or readjusted, or
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated at least to
the extent provided in this Article XV with respect to the Securities to the
payment of Senior Indebtedness that may at the time be outstanding; provided
that (i) such Senior Indebtedness is assumed by the new corporation, if any,
resulting from any such reorganization or readjustment, and (ii) the rights of
the holders of such Senior Indebtedness are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation of
the Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the sale, conveyance,
transfer or lease of its property as an entirety, or substantially as an
entirety, to another Person upon the terms and conditions provided for in
Article X of this Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 15.03 if such
other Person shall, as a part of such consolidation, merger, sale, conveyance,
transfer or lease, comply with the conditions stated in Article X of this
Indenture. Nothing in Section 15.02 or in this Section 15.03 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 6.06 of this
Indenture.
Nothing contained in this Article XV or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness of the Company, and the
holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Securities the principal of (and
premium, if any) and interest (including Compounded Interest and Additional
Sums, if any) on the Securities as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the holders of the Securities and creditors of the Company,
as the case may be, other than the holders of Senior Indebtedness of the
Company, as the
61
<PAGE>
case may be, nor shall anything herein or therein prevent the occurrence of an
Event of Default under Article V or prevent the Trustee or the holder of any
Security from exercising all remedies otherwise permitted by applicable law upon
the occurrence of a Default or an Event of Default under the Indenture, subject
to the rights, if any, under this Article XV of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Company, as the
case may be, received upon the exercise of any such remedy.
SECTION 15.04. Subrogation.
Subject to the payment in full of all Senior Indebtedness, the rights of
the Securityholders shall be subrogated to the rights of the holders of such
Senior Indebtedness to receive payments or distributions of cash, property or
securities of the Company, as the case may be, applicable to such Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Securities shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of such Senior Indebtedness of any
cash, property or securities to which the Securityholders or the Trustee would
be entitled except for the provisions of this Article XV, and no payment over
pursuant to the provisions of this Article XV to or for the benefit of the
holders of such Senior Indebtedness by Securityholders or the Trustee, shall, as
between the Company, its creditors other than holders of Senior Indebtedness of
the Company, and the holders of the Securities, be deemed to be a payment by the
Company to or on account of such Senior Indebtedness. It is understood that the
provisions of this Article XV are and are intended solely for the purposes of
defining the relative rights of the holders of the Securities, on the one hand,
and the holders of such Senior Indebtedness on the other hand.
SECTION 15.05. Trustee to Effectuate Subordination.
Each Securityholder by such Securityholder's acceptance thereof authorizes
and directs the Trustee on such Securityholder's behalf to take such action as
may be necessary or appropriate to effectuate the subordination provided in this
Article XV and appoints the Trustee such Securityholder's attorney-in-fact for
any and all such purposes.
SECTION 15.06. Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company that would prohibit the making of
any payment of monies to or by the Trustee in respect of the Securities pursuant
to the provisions of this Article XV. Notwithstanding the provisions of this
Article XV or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article XV, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof
from the Company or a holder or holders of Senior Indebtedness or from any
trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Article VI of this Indenture, shall be
entitled in all respects to assume that no such facts exist; provided, however,
62
<PAGE>
that if the Trustee shall not have received the notice provided for in this
Section 15.06 at least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any) or interest
(including Compounded Interest and Additional Sums, if any) on any Security,
then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such money and to apply the same
to the purposes for which they were received, and shall not be affected by any
notice to the contrary that may be received by it within two Business Days prior
to such date.
The Trustee, subject to the provisions of Article VI of this Indenture,
shall be entitled to conclusively rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness of the
Company (or a trustee on behalf of such holder), as the case may be, to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article XV, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article XV, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Upon any payment or distribution of assets of the Company referred to in
this Article XV, the Trustee and the Securityholders shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in which
such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the
Securityholders, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XV.
SECTION 15.07. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article XV in respect of any Senior Indebtedness at any time
held by it, to the same extent as any other holder of Senior Indebtedness, and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this
63
<PAGE>
Article XV, and no implied covenants or obligations with respect to the holders
of such Senior Indebtedness shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of such Senior Indebtedness and, subject to the provisions of Article VI
of this Indenture, the Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to Securityholders, the Company or
any other Person money or assets to which any holder of such Senior Indebtedness
shall be entitled by virtue of this Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.06.
SECTION 15.08. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior Indebtedness of the
Company to enforce subordination as herein provided shall at any time in any way
be prejudiced or impaired by any act or failure to act on the part of the
Company, as the case may be, or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Company, as the case may be,
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof that any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness of the Company may, at any time and from time to
time, without the consent of or notice to the Trustee or the Securityholders,
without incurring responsibility to the Securityholders and without impairing or
releasing the subordination provided in this Article XV or the obligations
hereunder of the holders of the Securities to the holders of such Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company, as the case may be, and any other
Person.
SECTION 15.09. Article Applicable to Paying Agents.
In case at any time any paying agent other than the Trustee shall have been
appointed by the Company 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.
64
<PAGE>
SECTION 15.10. Trust Moneys Not Subordinated.
Notwithstanding anything contained herein to the contrary, payments from
money or the proceeds of U.S. Government Obligations held in trust under Section
11.02 of this Indenture by the Trustee for the payment of principal of and
interest on the Securities shall not be subordinated to the prior payment of any
Senior Indebtedness or subject to the restrictions set forth in this Article XV,
and none of the Securityholders shall be obligated to pay over any such amount
to the Company or any holder of Senior Indebtedness of the Company or any other
creditor of the Company.
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
------------------------------------
SECTION 16.01. Extension of Interest Payment Period.
So long as no Event of Default has occurred and is continuing, the Company
shall have the right, at any time and from time to time during the term of the
Securities, to defer payments of interest by extending the interest payment
period of such Securities for a period not exceeding 10 consecutive semi-annual
periods, including the first such semi-annual period during such extension
period (the "Extended Interest Payment Period"), during which Extended Interest
Payment Period no interest shall be due and payable; provided that no Extended
Interest Payment Period shall end on a date other than an Interest Payment Date
or extend beyond the Maturity Date. To the extent permitted by applicable law,
interest, the payment of which has been deferred because of the extension of the
interest payment period pursuant to this Section 16.01, will bear interest
thereon at the Coupon Rate compounded semi-annually for each semi-annual period
of the Extended Interest Payment Period ("Compounded Interest"). At the end of
the Extended Interest Payment Period, the Company shall pay all interest accrued
and unpaid on the Securities, including any Additional Sums and Compounded
Interest (together, "Deferred Interest") that shall be payable to the holders of
the Securities in whose names the Securities are registered in the Security
Register on the first record date preceding the end of the Extended Interest
Payment Period. Before the termination of any Extended Interest Payment Period,
the Company may further defer payments of interest by further extending such
period; provided that such period, together with all such previous and further
extensions within such Extended Interest Payment Period, shall not exceed 10
consecutive semi-annual periods, including the first such semi-annual period
during such Extended Interest Payment Period, end on a date other than an
Interest Payment Date or extend beyond the Maturity Date of the Securities.
Upon the termination of any Extended Interest Payment Period and the payment of
all Deferred Interest then due, the Company may commence a new Extended Interest
Payment Period, subject to the foregoing requirements. No interest shall be due
and payable during an Extended Interest Payment Period, except at the end
thereof, but the Company may prepay at any time all or any portion of the
interest accrued during an Extended Interest Payment Period.
65
<PAGE>
SECTION 16.02. Notice of Extension.
(a) If the Property Trustee is the only registered holder of the
Securities at the time the Company selects an Extended Interest Payment
Period, the Company shall give written notice to the Administrative
Trustees, the Property Trustee and the Trustee of its selection of such
Extended Interest Payment Period five Business Days before the earlier of
(i) the next succeeding date on which Distributions on the Trust Securities
issued by Dynegy Capital Trust are payable, or (ii) the date the Trust is
required to give notice of the record date, or the date such Distributions
are payable, to any national securities exchange or to holders of the
Preferred Securities issued by the Trust, but in any event at least five
Business Days before such record date.
(b) If the Property Trustee is not the only holder of the Securities
at the time the Company selects an Extended Interest Payment Period, the
Company shall give the holders of the Securities and the Trustee written
notice of its selection of such Extended Interest Payment Period at least
10 Business Days before the earlier of (i) the next succeeding Interest
Payment Date, or (ii) the date the Company is required to give notice of
the record or payment date of such interest payment to any national
securities exchange.
(c) The semi-annual period in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 16.02 shall be counted as one of the
10 semi-annual periods permitted in the maximum Extended Interest Payment
Period permitted under Section 16.01.
The First National Bank of Chicago hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed by their respective officers thereunto duly authorized, as of
the day and year first above written.
DYNEGY INC.
By: _______________________________
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By: _______________________________
Name:
Title:
66
<PAGE>
EXHIBIT A
---------
(FORM OF FACE OF SECURITY)
THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING
AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000 (100 SECURITIES). ANY
SUCH TRANSFER OF SECURITIES IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF
LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.
ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES FOR
ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF PRINCIPAL, PREMIUM (IF
ANY) OR INTEREST OF SUCH SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE
NO INTEREST WHATSOEVER IN SUCH SECURITIES.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT OR OTHER
PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA") OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR
AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY SUCH
PLAN'S INVESTMENT IN THE ENTITY AND IS NOT PURCHASING OR HOLDING SUCH SECURITIES
ON BEHALF OF OR WITH "PLAN ASSETS" OR (ii) IT IS ELIGIBLE FOR THE EXEMPTIVE
RELIEF AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO
SUCH PURCHASE AND HOLDING.
A-1
<PAGE>
No._____________
DYNEGY INC.
________% DEBENTURE
DUE ______________, ____
Dynegy Inc., a Delaware corporation (the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to The First National Bank of Chicago, as
Property Trustee for Dynegy Capital Trust II or registered assigns, the
principal sum of __________________ DOLLARS ($__________) on _________, ___ (the
"Maturity Date"), unless previously redeemed, and to pay interest on the
outstanding principal amount hereof from ___________, ____, or from the most
recent interest payment date (each such date, an "Interest Payment Date") to
which interest has been paid or duly provided for, semi-annually (subject to
deferral as set forth herein) in arrears on __________ and __________ of each
year, commencing ______________, ____, at the rate of ____% per annum until the
principal hereof shall have become due and payable, and on any overdue principal
and premium, if any, and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum compounded semi-annually. The amount of
interest payable on any Interest Payment Date shall be computed on the basis of
a 360-day year of twelve 30-day months and, for any period less than a full
calendar month, the number of days elapsed in such month. In the event that any
date on which the principal of (or premium, if any) or interest on this Security
is payable is not a Business Day, then the payment payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), except that if such next
succeeding Business Day falls in the next calendar year, then 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 such payment is otherwise required.
Pursuant to the Indenture, in certain circumstances the Company will be required
to pay Additional Sums and Compounded Interest (each as defined in the
Indenture) with respect to this Security.
The interest installment so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Security (or one or more Predecessor Securities,
as defined in said Indenture) is registered at the close of business on the
regular record date for such interest installment, which shall be at the close
of business on the _____ day of the month preceding the month in which the
relevant interest payment date falls. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
holders on such regular record date and may be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the close
of business on a special record date to be fixed by the Trustee for the payment
of such defaulted interest, notice whereof shall be given to the holders of
Securities not less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with the
A-2
<PAGE>
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture.
The principal of (and premium, if any) and interest (including Compounded
Interest and Additional Sums, if any) on this Security shall be payable at the
office or agency of the Trustee maintained for that purpose in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that, payment
of interest may be made at the option of the Company by (i) check mailed to the
holder at such address as shall appear in the Security Register or (ii) by
transfer to an account maintained by the Person entitled thereto; provided that
proper written transfer instructions have been received by the relevant record
date. Notwithstanding the foregoing, so long as the Holder of this Security is
the Property Trustee, the payment of the principal of (and premium, if any) and
interest (including Compounded Interest and Additional Sums, if any) on this
Security will be made at such place and to such account as may be designated by
the Property Trustee.
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and junior 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 or her behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
so provided and (c) appoints the Trustee his or her attorney-in-fact for any and
all such purposes. Each holder hereof, by his or her acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
This Security shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Security are continued on the reverse side hereof
and such provisions shall for all purposes have the same effect as though fully
set forth at this place.
A-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed and sealed.
Dated: _____________, ____
DYNEGY INC.
By: ____________________________
Name:
Title:
Attest:
By: _______________________
Name:
Title:
A-4
<PAGE>
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By____________________________
Authorized Signatory
A-5
<PAGE>
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Company (herein sometimes
referred to as the "Securities"), specified in the Indenture, all issued or to
be issued under and pursuant to an Indenture, dated as of ___________, ___ (the
"Indenture"), duly executed and delivered between the Company and The First
National Bank of Chicago, as Trustee (the "Trustee"), to which Indenture
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Securities.
Upon the occurrence and continuation of a Special Event at any time, the
Company shall have the right, at any time within 90 days following the
occurrence of such Special Event, to redeem this Security in whole (but not in
part) at the Special Event Redemption Price. "Special Event Redemption Price"
shall mean, with respect to any redemption of the Securities following a Special
Event, an amount in cash equal to 100% of the principal amount of the Securities
to be redeemed plus accrued and unpaid interest thereon (including Additional
Sums, if any) to the date of redemption.
In addition, the Company shall have the right to redeem this Security, in
whole or in part, at any time (an "Optional Redemption"), at a redemption price
(the "Optional Redemption Price") equal to the greater of (i) 100% of the
principal amount of the Securities to be so redeemed plus accrued and unpaid
interest thereon (including Additional Sums, if any) to the date of redemption
and (ii) the sum of the present values of the remaining scheduled payments of
principal of the Securities to be so redeemed and interest thereon (including
Additional Sums, if any) discounted to the date of redemption, on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months), at the
Treasury Rate (as defined herein) plus ___ basis points plus accrued interest
thereon to the date of redemption.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Reference Treasury Dealer as having a maturity comparable to the
remaining term of the Securities to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Securities.
"Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government
A-6
<PAGE>
Securities" or (ii) if such release (or any successor release) is not published
or does not contain such prices on such business day, the average of the
Reference Treasury Dealer Quotations for such redemption date.
"Reference Treasury Dealer Quotations" means, with respect to the
Reference Treasury Dealer and any redemption date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by the Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third business day preceding such redemption date.
"Reference Treasury Dealer" means ________________ and its successors;
provided however, that if _______________ shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
The Optional Redemption Price or the Special Event Redemption Price, as the
case requires, shall be paid prior to 12:00 noon, New York City time, on the
date of such redemption or at such earlier time as the Company determines;
provided, that the Company shall deposit with the Trustee an amount sufficient
to pay the applicable Redemption Price by 10:00 a.m., New York City time, on the
date such Redemption Price is to be paid. Any redemption pursuant to this
paragraph will be made upon not less than 30 days nor more than 60 days notice.
If the Securities are only partially redeemed by the Company pursuant to an
Optional Redemption, the particular Securities to be redeemed shall be selected
on a pro rata basis not more than 60 days prior to the date fixed for redemption
from the outstanding Securities not previously called for redemption; provided,
however, that with respect to Securityholders that would be required to hold
Securities with an aggregate principal amount of less than $100,000 but more
than an aggregate principal amount of zero as a result of such pro rata
redemption, the Company shall redeem Securities of each such Securityholder so
that after such redemption such Securityholder shall hold Securities either with
an aggregate principal amount of at least $100,000 or such Securityholder no
longer holds any Securities and shall use such method (including, without
limitation, by lot) as the Company shall deem fair and appropriate; provided,
further, that any such proration may be made on the basis of the aggregate
principal amount of Securities held by each Securityholder thereof and may be
made by making such adjustments as the Company deems fair and appropriate in
order that only Securities in denominations of $1,000 or integral multiples
thereof shall be redeemed.
In the event of redemption of this Security in part only, a new Security or
Securities for the unredeemed portion hereof will be issued in the name of the
holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Securities may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
A-7
<PAGE>
The Indenture contains provisions for satisfaction and discharge of the
entire indebtedness of this Security upon compliance by the Company with certain
conditions set forth in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of a majority in aggregate principal amount of
the Securities at the time outstanding, as defined in the Indenture, to execute
supplemental indentures for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of modifying in any manner the rights of the holders of the Securities;
provided, however, that no such supplemental indenture shall, without the
consent of each holder of Securities then outstanding and affected thereby, (i)
change the Maturity Date of any Securities, or reduce the principal amount
thereof, or reduce any amount payable on redemption thereof, or reduce the rate
or extend the time of payment of interest thereon (subject to Article XVI of the
Indenture), or make the principal of, or interest or premium on, the Securities
payable in any coin or currency other than U.S. dollars, or impair or affect the
right of any holder of Securities to institute suit for the payment thereof, or
(ii) reduce the aforesaid percentage of Securities, the holders of which are
required to consent to any such supplemental indenture. The Indenture also
contains provisions permitting the holders of a majority in aggregate principal
amount of the Securities at the time outstanding affected thereby, on behalf of
all of the holders of the Securities, to waive any past default in the
performance of any of the covenants contained in the Indenture, or established
pursuant to the Indenture, and its consequences, except a default in the
payment of the principal of or premium, if any, or interest on any of the
Securities or a default in respect of any covenant or provision under which the
Indenture cannot be modified or amended without the consent of each holder of
Securities then outstanding. Any such consent or waiver by the holder of this
Security (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future holders and owners of this Security
and of any Security issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest (including Compounded Interest and Additional Sums, if any) on this
Security at the time and place and at the rate and in the money herein
prescribed.
So long as no Event of Default shall have occurred and be continuing, the
Company shall have the right, at any time and from time to time during the term
of the Securities, to defer payments of interest by extending the interest
payment period of such Securities for a period not exceeding 10 consecutive
semi-annual periods, including the first such semi-annual period during such
extension period, and not extending beyond the Maturity Date of the Securities
(an "Extended Interest Payment Period") or ending on a date other than an
Interest Payment Date, at the end of which period the Company shall pay all
interest then accrued and unpaid (together with interest thereon at the rate
specified for the Securities to the extent that payment of such interest is
enforceable under applicable law). Before the termination of any such Extended
Interest Payment Period, the Company may further defer payments of interest by
further extending such Extended Interest Payment Period;
A-8
<PAGE>
provided that such Extended Interest Payment Period, together with all such
previous and further extensions within such Extended Interest Payment Period,
(i) shall not exceed 10 consecutive semi-annual periods, including the first
semi-annual period during such Extended Interest Payment Period, (ii) shall not
end on any date other than an Interest Payment Date, and (iii) shall not extend
beyond the Maturity Date of the Securities. Upon the termination of any such
Extended Interest Payment Period and the payment of all accrued and unpaid
interest and any additional amounts then due, the Company may commence a new
Extended Interest Payment Period, subject to the foregoing requirements.
The Company has agreed that it will not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock) (other than (a) dividends or distributions in shares of, or
options, warrants or rights to subscribe for or purchase shares of, Common Stock
of the Company, (b) any declaration of a dividend in connection with the
implementation of a stockholder's rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) as a result of a reclassification of the Company's
capital stock or the exchange or the conversion of one class or series of the
Company's capital stock, for another class or series of the Company's capital
stock, (d) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the exchange or conversion of such capital stock or
the security being exchanged or converted, and (e) purchases of Common Stock
related to the issuance of Common Stock or rights under any of the Company's
benefit plans for its directors, officers or employees or any of the Company's
dividend reinvestment plans) or (ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities of the
Company that rank pari passu with or junior in right of payment to the
Securities or (iii) make any guarantee payments with respect to any guarantee
(other than payments under the Preferred Securities Guarantee) by the Company of
the debt securities of any Subsidiary of the Company if such guarantee ranks
pari passu or junior in right of payment to the Securities if at such time (1)
there shall have occurred any event of which the Company has actual knowledge
that (a) with the giving of notice or the lapse of time, or both, would be, an
Event of Default and (b) in respect of which the Company shall not have taken
reasonable steps to cure, (2) an Event of Default hereunder shall have occurred
and be continuing, (3) if the Securities are held by the Property Trustee, the
Company shall be in default with respect to its payment obligations under the
Preferred Securities Guarantee or (4) the Company shall have given notice of its
election of the exercise of its right to extend the interest payment period and
any such extension shall be continuing.
Subject to the receipt by the Company of an opinion of counsel to the
effect that such distribution will not be a taxable event to holders of
Preferred Securities, the Company will have the right at any time to liquidate
the Dynegy Capital Trust and cause the Securities to be distributed to the
holders of the Trust Securities in liquidation of the Trust.
The Securities are issuable only in registered form without coupons in
denominations of $1,000.00 and any integral multiple thereof. As provided in
the Indenture and subject to the transfer restrictions limitations as may be
contained herein and therein from time to time, this Security is
A-9
<PAGE>
transferable by the holder hereof on the Security Register of the Company, upon
surrender of this Security for registration of transfer at the office or agency
of the Company in the City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of authorized denominations
and for the same aggregate principal amount and series will be issued to the
designated transferee or transferees. No service charge will be made for any
such registration of transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Security, the
Company, the Trustee, any authenticating agent, any paying agent, any transfer
agent and the registrar may deem and treat the holder hereof as the absolute
owner hereof (whether or not this Security shall be overdue and notwithstanding
any notice of ownership or writing hereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and (subject to the Indenture) interest
due hereon and for all other purposes, and neither the Company nor the Trustee
nor any authenticating agent nor any paying agent nor any transfer agent nor any
registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or premium, if
any, or interest on this Security, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor Person, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
All terms used in this Security that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
A-10
<PAGE>
EXHIBIT 4.12.1
====================================
FORM OF
COMMON SECURITIES GUARANTEE AGREEMENT
DYNEGY INC.
Dated as of ______, ___
====================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation..................... 1
ARTICLE II
GUARANTEE
SECTION 2.1 Guarantee.......................................... 3
SECTION 2.2 Waiver of Notice and Demand........................ 3
SECTION 2.3 Obligations Not Affected........................... 3
SECTION 2.4 Rights of Holders.................................. 4
SECTION 2.5 Guarantee of Payment............................... 4
SECTION 2.6 Subrogation........................................ 4
SECTION 2.7 Independent Obligations............................ 5
ARTICLE III
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 3.1 Limitation of Transactions......................... 5
SECTION 3.2 Ranking............................................ 6
ARTICLE IV
TERMINATION
SECTION 4.1 Termination........................................ 6
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Successors and Assigns............................. 6
SECTION 5.2 Amendments......................................... 7
SECTION 5.3 Notices............................................ 7
SECTION 5.4 Benefit............................................ 8
SECTION 5.5 GOVERNING LAW...................................... 8
<PAGE>
FORM OF
COMMON SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Common Securities Guarantee"), dated as
of ______, ___, is executed and delivered by Dynegy Inc., a Delaware corporation
(the "Guarantor"), for the benefit of the Holders (as defined herein) from time
to time of the Common Securities (as de fined herein) of Dynegy Capital Trust
II, a Delaware business trust (the "Issuer").
WHEREAS, pursuant to the Declaration, the Issuer is issuing on the
date hereof $_______ aggregate liquidation amount of its ____% Common Securities
(the "Common Securities"), liquidation amount $1,000 per Common Security;
WHEREAS, as incentive for the Holders to purchase the Common
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth in this Common Securities Guarantee, to pay to the Holders
the Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Preferred Securities Guarantee") for the benefit of the holders
of the Preferred Securities (as defined in the Declaration), with substantially
identical terms to this Common Securities Guarantee, except that if an Event of
Default (as defined in the Declaration) has occurred and is continuing, the
rights of Holders to receive Guarantee Payments under this Common Securities
Guarantee are subordinated to the rights of holders of Preferred Securities
to receive Guarantee Payments under the Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby acknowledges shall benefit the Guarantor, the
Guarantor executes and delivers this Common Securities Guarantee for the benefit
of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
------------------------------
In this Common Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Common Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) terms defined in the Declaration as at the date of execution of
this Common Securities Guarantee have the same meaning when used in this Common
Securities Guarantee unless otherwise defined in this Common Securities
Guarantee;
1
<PAGE>
(c) a term defined anywhere in this Common Securities Guarantee has
the same meaning throughout;
(d) all references to "the Common Securities Guarantee" or "this
Common Securities Guarantee" are to this Common Securities Guarantee as
modified, supplemented or amended from time to time;
(e) all references in this Common Securities Guarantee to Articles and
Sections are to Articles and Sections of this Common Securities Guarantee unless
otherwise specified; and
(f) a reference to the singular includes the plural and vice versa.
"Declaration" means the Amended and Restated Declaration of Trust,
dated as of ______, ___ as amended, modified or supplemented from time to time,
among the trustees of the Issuer named therein, the Guarantor, as sponsor, and
the holders from time to time of undivided beneficial ownership interests in the
assets of the Issuer.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Common Securities, to the extent not
paid or made by the Issuer: (i) any accumulated and unpaid Distributions that
are required to be paid on such Common Securities to the extent the Issuer has
funds on hand legally available therefor at such time, (ii) the redemption
price, including all accumulated and unpaid Distributions to the date of
redemption (the "Redemption Price") to the extent the Issuer has funds on hand
legally available therefor at such time, with respect to any Common Securities
called for redemption by the Issuer, and (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of the Issuer (other than in connection
with the distribution of Debentures to the Holders in exchange for Common
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accumulated and unpaid Distributions on the
Common Securities to the date of payment, to the extent the Issuer has funds on
hand legally available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer
after satisfaction of liabilities of creditors of the Issuer as required by
applicable law (in either case, the "Liquidation Distribution"). If an Event of
Default has occurred and is continuing, no Guarantee Payments with respect to
the Common Securities shall be made until holders of Preferred Securities shall
be paid in full the Guarantee Payments to which they are entitled under the
Preferred Securities Guarantee.
"Holder" means any holder, as registered on the books and records of
the Issuer, of any Common Securities.
"Other Guarantees" means all guarantees to be issued by the Guarantor
with respect to common securities (if any) similar to the Common Securities
issued by other trusts to be established by the Guarantor (if any), in each case
similar to the Issuer.
2
<PAGE>
ARTICLE II
GUARANTEE
SECTION 2.1 Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the 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 2.2 Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of this Common
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 2.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this Common Securities Guarantee shall be absolute and unconditional and
shall remain in full force and effect until the entire liquidation amount of all
outstanding Common Securities shall have been paid and such obligation shall in
no way be affected or impaired by reason of the happening from time to time of
any 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 Common 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, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Common Securities or the
extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Common Securities (other than an
extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Property Trustee or the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Property Trustee or the
Holders pursuant to the terms of the Common Securities, or any action on
the part of the Issuer granting indulgence or extension of any kind;
3
<PAGE>
(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 Common
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 2.3 that the obligations of the Guarantor with
respect to the Guarantee Payments shall be absolute and unconditional under
any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 2.4 Rights of Holders
-----------------
The Guarantor expressly acknowledges that any Holder may institute a
legal proceeding directly against the Guarantor to enforce its rights under
this Common Securities Guarantee, without first instituting a legal proceeding
against the Issuer or any other Person.
SECTION 2.5 Guarantee of Payment
--------------------
This Common Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 2.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Common Securities Guarantee; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any 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 Common Securities Guarantee, if, at the
time of any such payment, any amounts are due and unpaid under this Common
Securities Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 2.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Common
Securities and that the Guarantor shall be liable
4
<PAGE>
as principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Common Securities Guarantee notwithstanding the occurrence of any
event referred to in subsections (a) through (g), inclusive, of Section 2.3
hereof.
ARTICLE III
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 3.1 Limitation of Transactions
--------------------------
So long as any Common Securities remain outstanding, the Guarantor
will not, and will not permit any subsidiary of the Guarantor to, (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Guarantor's capital stock (which
includes common stock and preferred stock) (other than (a) dividends or
distributions in shares of, or options, warrants or rights to subscribe for or
purchase shares of, common stock of the Guarantor, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) as a result of a
reclassification of the Guarantor's capital stock or the exchange or the
conversion of one class or series of the Guarantor's capital stock for another
class or series of the Guarantor's capital stock, (d) the purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, and (e) purchases of common stock related to the issuance of common
stock or rights under any of the Guarantor's benefit plans for its directors,
officers or employees or any of the Guarantor's dividend reinvestment plans),
(ii) make any payment of principal of, or premium, if any, or interest on or
repay, repurchase or redeem any debt securities of the Guarantor (including
Other Debentures) that rank pari passu with or junior in right of payment to the
Debentures or (iii) make any guarantee payments with respect to any guarantee
(other than the Preferred Securities Guarantee) by the Guarantor of the debt
securities of any subsidiary of the Guarantor (including under Other Guarantees)
if such guarantee ranks pari passu with or junior in right of payment to the
Debentures if at such time (1) there shall have occurred any event of which the
Guarantor has actual knowledge that (a) with the giving of notice or the lapse
of time, or both, would constitute an Event of Default and (b) in respect of
which the Guarantor shall not have taken reasonable steps to cure, (2) an Event
of Default shall have occurred and be continuing, (3) if such Debentures are
held by the Property Trustee, the Guarantor shall be in default with respect to
its payment of any obligations under the Preferred Securities Guarantee or (4)
the Guarantor shall have given notice of its election of the exercise of its
right to extend the interest payment period pursuant to Section 16.01 of the
Indenture and any such extension shall be continuing.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing under the Declaration, the rights of the holders of the Common
Securities to receive Guarantee Payments under the Common Securities Guarantee
or any Other Common Securities Guarantee shall be subordinated to the rights of
the holders of the Preferred Securities to receive payments of all amounts due
and owing to such holders under the Preferred Securities Guarantee or any
guarantee
5
<PAGE>
relating to any securities similar to the Preferred Securities issued by other
Trusts to be established by the Guarantor, in each case similar to the Issuer.
SECTION 3.2 Ranking
-------
This Common Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to Senior Indebtedness (as defined in the Indenture), to the same extent
and in the same manner that the Debentures are subordinated to Senior
Indebtedness pursuant to the Indenture, (ii) pari passu with the Debentures, the
Other Debentures and with any Other Guarantee, the Preferred Securities
Guarantee and (iii) senior to the Guarantor's capital stock.
ARTICLE IV
TERMINATION
SECTION 4.1 Termination
-----------
This Common Securities Guarantee shall terminate and be of no further
force and effect (i) upon full payment of the Redemption Price of all Common
Securities, (ii) upon the distribution of all of the Debentures to all the
Holders and the holders of the Preferred Securities or (iii) upon full payment
of the amounts payable in accordance with the Declaration upon liquidation of
the Issuer. Notwithstanding the foregoing, this Common Securities Guarantee
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 under the Common
Securities or under this Common Securities Guarantee.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Successors and Assigns
----------------------
All guarantees and agreements contained in this Common Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
then outstanding.
SECTION 5.2 Amendments
----------
Except with respect to any changes which do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Common Securities Guarantee may only be amended with the prior
approval of the Holders of at least a majority in liquidation amount of all the
outstanding Common Securities. The provisions of Section 12.2 of the
Declaration with respect to meetings of holders of the Securities apply to the
giving of such approval.
6
<PAGE>
SECTION 5.3 Notices
-------
All notices provided for in this Common Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Issuer, in care of the Administrative Trustee at
the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Holders):
Dynegy Capital Trust II
c/o Dynegy Inc.
1000 Louisiana, Suite 5800
Houston, TX 77002
Attention: John U. Clarke
Administrative Trustee
Telecopy: (713) 767-8322
(b) if given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to
the Holders):
Dynegy Inc.
1000 Louisiana, Suite 5800
Houston, TX 77002
Attention: Kenneth E. Randolph
Telecopy: (713) 507-6808
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery 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 5.4 Benefit
-------
This Common Securities Guarantee is solely for the benefit of the
Holders and is not separately transferable from the Common Securities.
SECTION 5.5 GOVERNING LAW
-------------
THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
7
<PAGE>
THIS COMMON SECURITIES GUARANTEE is executed as of the day and year
first above written.
DYNEGY INC.
By:
-------------------------------------
Name:
Title:
<PAGE>
EXHIBIT 4.12.2
====================================
FORM OF
PREFERRED SECURITIES GUARANTEE AGREEMENT
DYNEGY INC.
Dated as of ______, ___
====================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.................................. 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application................................ 5
SECTION 2.2 Lists of Holders of Securities.................................. 6
SECTION 2.3 Reports by the Preferred Securities Guarantee Trustee........... 6
SECTION 2.4 Periodic Reports to Preferred Securities Guarantee Trustee...... 6
SECTION 2.5 Evidence of Compliance with Conditions Precedent................ 7
SECTION 2.6 Events of Default; Waiver....................................... 7
SECTION 2.7 Event of Default; Notice........................................ 7
SECTION 2.8 Conflicting Interests........................................... 7
SECTION 2.9 Preferred Securities Guarantee Trustee May File Proofs of Claim. 8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Securities Guarantee Trustee. 8
SECTION 3.2 Certain Rights of Preferred Securities Guarantee Trustee........ 10
SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee........................................ 12
ARTICLE IV
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Preferred Securities Guarantee Trustee; Eligibility............. 12
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Securities Guarantee Trustee................................ 13
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee....................................................... 13
SECTION 5.2 Waiver of Notice and Demand..................................... 14
SECTION 5.3 Obligations Not Affected........................................ 14
SECTION 5.4 Rights of Holders............................................... 15
<PAGE>
Page
----
SECTION 5.5 Guarantee of Payment............................................ 15
SECTION 5.6 Subrogation..................................................... 15
SECTION 5.7 Independent Obligations......................................... 16
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions...................................... 16
SECTION 6.2 Ranking......................................................... 17
ARTICLE VII
TERMINATION
SECTION 7.1 Termination..................................................... 17
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation..................................................... 18
SECTION 8.2 Indemnification................................................. 18
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.......................................... 18
SECTION 9.2 Amendments...................................................... 19
SECTION 9.3 Notices......................................................... 19
SECTION 9.4 Benefit......................................................... 20
SECTION 9.5 GOVERNING LAW................................................... 20
SECTION 9.6 Limited Liability............................................... 20
ii
<PAGE>
PREFERRED
SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"),
dated as of ______, ___, is executed and delivered by Dynegy Inc., a Delaware
corporation (the "Guarantor"), and The First National Bank of Chicago, a
national banking association as trustee (the "Preferred Securities Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Preferred Securities (as defined herein) of Dynegy Capital Trust II, a
Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to the Declaration (as defined herein) the Issuer is
issuing on the date hereof $______ aggregate liquidation amount of its ____%
Preferred Securities (collectively the "Preferred Securities") liquidation
amount $1,000 per Preferred Security.
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders the Guarantee Payments (as defined below) and to make certain other
payments on the terms and conditions set forth herein.
WHEREAS, the Guarantor is executing and delivering a guarantee
agreement (the "Common Securities Guarantee"), with substantially identical
terms to this Preferred Securities Guarantee, for the benefit of the holders of
the Common Securities (as defined herein), except that if an Event of Default
(as defined in the Declaration) has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated, to the extent and in the manner set forth
in the Common Securities Guarantee, to the rights of holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby acknowledges shall benefit the Guarantor, the
Guarantor executes and delivers this Preferred Securities Guarantee for the
benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
------------------------------
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
<PAGE>
(b) terms defined in the Declaration as at the date of execution of
this Preferred Securities Guarantee have the same meaning when
used in this Preferred Securities Guarantee unless otherwise
defined in this Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the
context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday or a Sunday, or a
day on which banking institutions in Chicago, Illinois or Houston, Texas are
authorized or required by law or executive order to close.
"Preferred Securities Guarantee Trustee" means The First National
Bank of Chicago, a national banking association, until a Successor Preferred
Securities Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Securities Guarantee Trustee.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Securities
Guarantee Trustee at which the corporate trust business of the Preferred
Securities Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Agreement is located
at One First National Plaza, Suite 0126, Chicago, Illinois 60670.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
2
<PAGE>
"Debentures" means the series of subordinated debt securities of the
Guarantor designated the ____ 8.316% Subordinated Deferrable Interest Debentures
due _____, ___, held by the Property Trustee (as defined in the Declaration) of
the Issuer.
"Declaration" means the Amended and Restated Declaration of Trust,
dated as of ______, ___, as amended, modified or supplemented from time to time,
among the trustees of the Issuer named therein, the Guarantor, as sponsor, and
the holders from time to time of undivided beneficial ownership interests in the
assets of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee,
provided, however, that with respect to a default other than a default in
payment of any Guarantee Payment, the Guarantor shall have received notice of
such default and shall not have cured such default within 60 days after receipt
of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent
not paid or made by the Issuer: (i) any accumulated and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Preferred
Securities to the extent the Issuer has funds on hand legally available therefor
at such time, (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has funds on hand legally available therefor at such time, with
respect to any Preferred Securities called for redemption by the Issuer, and
(iii) upon a voluntary or involuntary dissolution, winding-up or liquidation of
the Issuer (other than in connection with the distribution of Debentures to the
Holders in exchange for Preferred Securities as provided in the Declaration),
the lesser of (a) the aggregate of the liquidation amount and all accumulated
and unpaid Distributions on the Preferred Securities to the date of payment, to
the extent the Issuer has funds on hand legally available therefor, 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. If an Event of Default has occurred
and is continuing, no Guarantee Payments under the Common Securities Guarantee
with respect to the Common Securities or any guarantee payment under any Other
Common Securities Guarantees shall be made until the Holders shall be paid in
full the Guarantee Payments to which they are entitled under this Preferred
Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Person known to a Responsible Officer of
the Preferred Securities Guarantee Trustee to be an Affiliate of the Guarantor
and provided further, that in determining whether the Holders of the requisite
liquidation amount of Preferred Securities have voted on any matter provided for
in the Guarantee, then for the purpose of such determination only (and not for
any other purposes hereunder), if the Preferred Securities remain in the form
of one or more Global Certificates (as defined in the Declaration), the term
"Holders"
3
<PAGE>
shall mean the holder of the Global Certificate acting at the direction of the
Preferred Security Beneficial Owners (as defined in the Declaration).
"Indemnified Person" means the Preferred Securities Guarantee
Trustee, any Affiliate of the Preferred Securities Guarantee Trustee, or any
officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Preferred Securities
Guarantee Trustee.
"Indenture" means the Indenture dated as of _______, ___, among the
Guarantor (the "Debenture Issuer") and The First National Bank of Chicago, as
trustee (the "Indenture Trustee"), and any indenture supplemental thereto,
pursuant to which the Debentures are to be issued to the Property Trustee (as
defined in the Declaration) of the Issuer.
"Indenture Event of Default" shall mean any event specified in Section
5.01 of the Indenture.
"Majority in liquidation amount of the Preferred Securities" means,
except as provided by the Declaration or by the Trust Indenture Act, a vote by
Holder(s) of more than 50% of the aggregate liquidation amount of all
outstanding Preferred Securities voting separately as a class. In determining
whether the Holders of the requisite amount of the Preferred Securities have
voted, Preferred Securities which are owned by the Guarantor or any Affiliate
of the Guarantor shall be disregarded for the purpose of any such determination
period.
"Officers' Certificate" means, with respect to the Guarantor, a
certificate signed by any of the Chairman of the Board, a Vice Chairman of the
Board, the Chief Executive Officer, the President or a Vice President and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Guarantor. Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Preferred Securities
Guarantee (other than pursuant to Section 314(d)(4) of the Trust Indenture Act)
shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer on behalf of such Person in
rendering the Officers' Certificates.
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
4
<PAGE>
"Other Common Securities Guarantees" shall have the same meaning as
"Other Guarantees" as defined in the Common Securities Guarantee.
"Other Debentures" means all junior subordinated debentures issued by
the Guarantor from time to time and sold to trusts to be established by the
Guarantor (if any), in each case similar to the Issuer.
"Other Guarantees" means all guarantees to be issued by the Guarantor
with respect to capital securities (if any) similar to the Preferred Securities
issued by other trusts to be established by the Guarantor (if any), in each case
similar to the Issuer.
"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" means, with respect to the Preferred Securities
Guarantee Trustee, any officer within the Corporate Trust Office of the
Preferred Securities Guarantee Trustee with direct responsibility for the
administration of this Preferred Securities Guarantee and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Successor Preferred Securities Guarantee Trustee" means a successor
Preferred Securities Guarantee Trustee possessing the qualifications to act as
Preferred Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trust Securities" means the Common Securities and the Preferred
Securities, collectively.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
5
<PAGE>
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
------------------------------
(a) The Guarantor shall provide the Preferred Securities Guarantee
Trustee (unless the Preferred Securities Guarantee Trustee is otherwise the
registrar of the Preferred Securities) with a list, in such form as the
Preferred Securities Guarantee Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") as of such date, (i) within one
Business Day after May 15 and November 15 of each year, and (ii) at any other
time within 30 days of receipt by the Guarantor of a written request for a List
of Holders as of a date no more than 14 days before such List of Holders is
given to the Preferred Securities Guarantee Trustee, provided, that the
Guarantor shall not be obligated to provide such List of Holders at any time
that the Guarantor certifies in writing to the Preferred Securities Guarantee
Trustee that the List of Holders does not differ from the most recent List of
Holders given to the Preferred Securities Guarantee Trustee by the Guarantor.
The Preferred Securities Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Preferred Securities Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Preferred Securities Guarantee Trustee
-----------------------------------------------------
Within 60 days after May 15 of each year, commencing May 15, 1998, the
Preferred Securities Guarantee Trustee shall provide to the Holders such reports
as are required by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture Act. The
Preferred Securities Guarantee Trustee shall also comply with the other
requirements of Section 313 of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Securities Guarantee Trustee
----------------------------------------------------------
The Guarantor shall provide to the Preferred Securities Guarantee
Trustee such documents, reports and information as required by Section 314 (if
any) and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act; provided that such compliance certificate shall
be delivered on or before 120 days after the end of each fiscal year of the
Guarantor. Delivery of such reports, information and documents to the Preferred
Securities Guarantee Trustee is for informational purposes only and the
Preferred Securities Guarantee Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Preferred Securities Guarantee Trustee
is entitled to rely exclusively on Officers' Certificates).
6
<PAGE>
SECTION 2.5 Evidence of Compliance with Conditions Precedent
------------------------------------------------
The Guarantor shall provide to the Preferred Securities Guarantee
Trustee such evidence of compliance with any conditions precedent, if any,
provided for in this Preferred Securities Guarantee that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
-------------------------
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of all 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 Preferred Securities Guarantee, but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
------------------------
(a) The Preferred Securities Guarantee Trustee shall, within 90 days
after the occurrence of an Event of Default with respect to this Preferred
Securities Guarantee actually known to a Responsible Officer, mail by first
class postage prepaid, to all Holders, notices of all such Events of Default,
unless such defaults have been cured before the giving of such notice, provided,
that, except in the case of default in the payment of any Guarantee Payment, the
Preferred Securities Guarantee Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors and/or a Responsible Officer in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Preferred Securities Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Preferred Securities
Guarantee Trustee shall have received written notice from the Guarantor, or a
Responsible Officer charged with the administration of this Preferred
Securities Guarantee shall have obtained actual knowledge, of such Event of
Default.
SECTION 2.8 Conflicting Interests
---------------------
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
7
<PAGE>
SECTION 2.9 Preferred Securities Guarantee Trustee May File Proofs of Claim
---------------------------------------------------------------
Upon the occurrence of an Event of Default, the Preferred Securities
Guarantee Trustee is hereby authorized to (a) recover judgment, in its own name
and as trustee of an express trust, against the Guarantor for the whole amount
of any Guarantee, payments remaining unpaid and (b) file such proofs of claim
and other papers or documents as may be necessary or advisable in order to have
its claims and those of the Holders of the Preferred Securities allowed in any
judicial procedures relative to the Guarantor, its creditors or its property.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Securities Guarantee Trustee
---------------------------------------------------------------
(a) This Preferred Securities Guarantee shall be held by the
Preferred Securities Guarantee Trustee for the benefit of the Holders, and the
Preferred Securities Guarantee Trustee shall not transfer this Preferred
Securities Guarantee to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(b) or to a Successor Preferred Securities Guarantee
Trustee on acceptance by such Successor Preferred Securities Guarantee Trustee
of its appointment to act as Successor Preferred Securities Guarantee Trustee.
The right, title and interest of the Preferred Securities Guarantee Trustee
shall automatically vest in any Successor Preferred Securities Guarantee
Trustee, and such vesting and succession of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Preferred Securities Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer has
occurred and is continuing, the Preferred Securities Guarantee Trustee shall
enforce this Preferred Securities Guarantee for the benefit of the Holders.
(c) The Preferred Securities Guarantee Trustee, before the occurrence
of any Event of Default and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Preferred Securities Guarantee, and no implied covenants
shall be read into this Preferred Securities Guarantee against the Preferred
Securities Guarantee Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6) and is actually known to a
Responsible Officer, the Preferred Securities Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
8
<PAGE>
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Securities 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 Preferred Securities
Guarantee Trustee shall be determined solely by the express provisions
of this Preferred Securities Guarantee, and the Preferred Securities
Guarantee Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Preferred Securities Guarantee, and no implied covenants or
obligations shall be read into this Preferred Securities Guarantee
against the Preferred Securities Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Securities Guarantee Trustee, the Preferred Securities Guarantee
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Preferred Securities
Guarantee Trustee and conforming to the requirements of this Preferred
Securities Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are specifically required to be
furnished to the Preferred Securities Guarantee Trustee, the
Preferred Securities Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Securities Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer,
unless it shall be proved that the Preferred Securities Guarantee Trustee
was negligent in ascertaining the pertinent facts upon which such judgment
was made;
(iii) the Preferred Securities Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of a Majority in
liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Securities Guarantee Trustee, or exercising any trust or
power conferred upon the Preferred Securities Guarantee Trustee under this
Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Securities 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 Preferred Securities Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under
9
<PAGE>
the terms of this Preferred Securities Guarantee or indemnity, reasonably
satisfactory to the Preferred Securities Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Securities Guarantee Trustee
--------------------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Securities Guarantee Trustee may conclusively
rely, and shall be fully protected in acting or refraining from acting,
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee may be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Securities Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking, suffering
or omitting any action hereunder, the Preferred Securities Guarantee
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Guarantor.
(iv) The Preferred Securities Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Securities Guarantee Trustee may consult with
counsel of its selection, and the advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Guarantor or any of its Affiliates and
may include any of its employees. The Preferred Securities Guarantee
Trustee shall have the right at any time to seek instructions concerning
the administration of this Preferred Securities Guarantee from any court
of competent jurisdiction.
(vi) The Preferred Securities Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Preferred Securities Guarantee at the request or direction of any Holder,
unless such Holder shall have provided to the Preferred Securities
Guarantee Trustee such security and indemnity, reasonably satisfactory to
the Preferred Securities Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the Preferred
Securities Guarantee Trustee's agents,
10
<PAGE>
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Preferred Securities Guarantee Trustee;
provided that, nothing contained in this Section 3.2(a)(vi) shall be taken
to relieve the Preferred Securities Guarantee Trustee, upon the occurrence
of an Event of Default, of its obligation to exercise the rights and powers
vested in it by this Preferred Securities Guarantee.
(vii) The Preferred Securities Guarantee Trustee shall not be bound
to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Preferred Securities
Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(viii) The Preferred Securities Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys, and
the Preferred Securities Guarantee Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Preferred Securities Guarantee Trustee
or its agents hereunder shall bind the Holders, and the signature of the
Preferred Securities Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Preferred Securities
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Preferred Securities Guarantee, both of which shall
be conclusively evidenced by the Preferred Securities Guarantee Trustee's
or its agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Securities Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Preferred Securities
Guarantee Trustee (i) may request instructions from the Holders of a
Majority in liquidation amount of the Preferred Securities, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions.
(xi) The Preferred Securities Guarantee Trustee shall not be liable
for any action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Securities Guarantee
Trustee to perform any act or
11
<PAGE>
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 Preferred
Securities Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Securities Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred Securities
----------------------------------------------------------------
Guarantee
---------
The recitals contained in this Preferred Securities Guarantee shall
be taken as the statements of the Guarantor, and the Preferred Securities
Guarantee Trustee does not assume any responsibility for their correctness. The
Preferred Securities Guarantee Trustee makes no representation as to the
validity or sufficiency of this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Preferred Securities Guarantee Trustee; Eligibility
---------------------------------------------------
(a) There shall at all times be a Preferred Securities Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Preferred Securities Guarantee Trustee shall
cease to be eligible to so act under Section 4.1(a), the Preferred Securities
Guarantee Trustee shall immediately resign in the manner and with the effect set
out in Section 4.2(c).
(c) If the Preferred Securities Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Preferred Securities
12
<PAGE>
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 Preferred Securities
------------------------------------------------------------
Guarantee Trustee
-----------------
(a) Subject to Section 4.2(b), the Preferred Securities Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor
except during an Event of Default.
(b) The Preferred Securities Guarantee Trustee shall not be removed
in accordance with Section 4.2(a) until a Successor Preferred Securities
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Preferred Securities Guarantee
Trustee and delivered to the Guarantor.
(c) The Preferred Securities Guarantee Trustee shall hold office
until a Successor Preferred Securities Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Securities
Guarantee Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred Securities
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Preferred Securities Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Preferred Securities Guarantee Trustee and delivered to the
Guarantor and the resigning Preferred Securities Guarantee Trustee.
(d) If no Successor Preferred Securities Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery of an instrument of removal or resignation, the Preferred
Securities Guarantee Trustee resigning or being removed may petition any court
of competent jurisdiction for appointment of a Successor Preferred Securities
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Preferred Securities Guarantee
Trustee.
(e) No Preferred Securities Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Preferred Securities Guarantee
Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Securities Guarantee Trustee pursuant
to this Section 4.2, the Guarantor shall pay to the Preferred Securities
Guarantee Trustee all amounts due to the Preferred Securities Guarantee Trustee
accrued to the date of such termination, removal or resignation.
13
<PAGE>
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 the Issuer), as and when due, regardless of any defense, right of set-
off or counterclaim that 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 this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands. Notwithstanding anything to the contrary herein, the
Guarantor retains all of its rights under the Indenture to extend the interest
payment period on the Subordinated Debentures and the Guarantor shall not be
obligated hereunder to make any Guarantee Payment during any extended Interest
Payment Period (as defined in the Indenture) with respect to the Distributions
(as defined in the Declaration) on the Preferred Securities.
SECTION 5.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall be absolute and unconditional
and shall remain in full force and effect until the entire liquidation amount of
all outstanding Preferred Securities shall have been paid and such obligation
shall in no way be affected or impaired by reason of the happening from time to
time of any 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 Preferred 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, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debentures permitted by the Indenture);
14
<PAGE>
(c) any failure, omission, delay or lack of diligence on the part of
the Property Trustee or the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Property Trustee or the Holders
pursuant to the terms of the Preferred Securities, or any action on the part of
the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
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 with respect to the
Guarantee Payments shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
-----------------
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Securities Guarantee
Trustee in respect of this Preferred Securities Guarantee or exercising any
trust or power conferred upon the Preferred Securities Guarantee Trustee under
this Preferred Securities Guarantee.
(b) If the Preferred Securities Guarantee Trustee fails to enforce
such Preferred Securities Guarantee, any Holder may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Preferred
Securities Guarantee, without first instituting a legal proceeding against the
Issuer, the Preferred Securities Guarantee Trustee or any other person or
entity. Notwithstanding the foregoing, if the Guarantor has failed to make a
Guarantee Payment, a Holder may directly institute a proceeding in such Holder's
own name against the Guarantor for enforcement of the Preferred Securities
Guarantee for such payment. The Guarantor waives any right or remedy to require
that any action be brought first against the Issuer or any other person or
entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
--------------------
15
<PAGE>
This Preferred Securities Guarantee creates a guarantee of payment
and not of collection.
SECTION 5.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Preferred Securities Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Preferred Securities Guarantee, if, at the time
of any such payment, any amounts are due and unpaid under this Preferred
Securities Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (h), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
--------------------------
So long as any Preferred Securities remain outstanding, the Guarantor
shall not, and shall not permit any subsidiary of the Guarantor to, (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Guarantor's capital stock
(which includes common and preferred stock)(other than (a) dividends or
distributions in shares of, or options, warrants, rights to subscribe for or
purchase shares of, common stock of the Guarantor, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) as a result of a
reclassification of the Guarantor's capital stock or the exchange or the
conversion of one class or series of the Guarantor's capital stock for another
class or series of the Guarantor's capital stock, (d) the purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, and (e) purchases of the Guarantor's common stock related to the
issuance of the Guarantor's common stock or rights under any of the Guarantor's
benefit plans for its directors, officers, employees or any of the Guarantor's
dividend reinvestment plans), (ii) make any payment of principal of, or premium,
16
<PAGE>
if any, or interest on or repay, repurchase or redeem any debt securities of the
Guarantor (including any Other Debentures) that rank pari passu with or junior
in right of payment to the Debentures or (iii) make any guarantee payments with
respect to any guarantee (other than payments under the Preferred Securities
Guarantee) by the Guarantor of the debt securities of any subsidiary of the
Guarantor (including Other Guarantees) if such guarantee ranks pari passu with
or junior in right of payment to the Debentures if at such time (1) there shall
have occurred any event of which the Guarantor has actual knowledge that (a)
with the giving of notice or the lapse of time, or both, would constitute an
Indenture Event of Default and (b) in respect of which the Guarantor shall not
have taken reasonable steps to cure, (2) an Indenture Event of Default shall
have occurred and be continuing, (3) if such Debentures are held by the Property
Trustee, the Guarantor shall be in default with respect to its payment of any
obligations under this Preferred Securities Guarantee or (4) the Guarantor
shall have given notice of its election of the exercise of its right to extend
the interest payment period pursuant to Section 16.01 of the Indenture or such
extension period, or any such extension shall have commenced and be continuing.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing under the Declaration, the rights of the holders of the Common
Securities to receive Guarantee Payments under the Common Securities Guarantee
or any Other Common Securities Guarantee shall be subordinated to the rights of
the holders of the Preferred Securities, to receive payments of all amounts due
and owing to such holders under this Preferred Securities Guarantee or any
Other Guarantee.
SECTION 6.2 Ranking
-------
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to Senior Indebtedness (as defined in the Indenture), to the same extent
and in the same manner that the Debentures are subordinated to Senior
Indebtedness pursuant to the Indenture, (ii) pari passu with the Debentures, the
Other Debentures, the Common Securities Guarantee and any Other Guarantee and
any Other Common Securities Guarantee, and (iii) senior to the Guarantor's
capital stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
-----------
This Preferred Securities Guarantee shall terminate and be of no
further force and effect (i) upon full payment of the Redemption Price (as
defined in the Declaration) of all Preferred Securities, or (ii) upon
liquidation of the Issuer, the full payment of the amounts payable in accordance
with the Declaration or the distribution of the Debentures to the Holders and
the holders of the Common Securities. Notwithstanding the foregoing, this
Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must
17
<PAGE>
restore payment of any sums paid under the Preferred Securities or under this
Preferred Securities Guarantee.
ARTICLE VII
INDEMNIFICATION
SECTION 8.1 Exculpation
-----------
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Preferred
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
SECTION 8.2 Indemnification
---------------
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The provisions in this
Section 8.2 shall survive the termination of this Preferred Securities
Guarantee or the resignation or removal of the Preferred Securities Guarantee
Trustee.
18
<PAGE>
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
----------------------
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
then outstanding.
SECTION 9.2 Amendments
----------
Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of a Majority in liquidation amount of the
Preferred Securities (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined). The provisions of
the Declaration with respect to consents to amendments thereof (whether at a
meeting or otherwise) shall apply to the giving of such approval.
SECTION 9.3 Notices
-------
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administrative Trustee at
the mailing address set forth below (or such other address as the Issuer may
give notice of to the Holders and the Preferred Securities Guarantee Trustee):
Dynegy Capital Trust II
c/o Dynegy Inc.
1000 Louisiana, Suite 5800
Houston, TX 77002
Attention: John U. Clarke
Administrative Trustee
Telecopy: (713) 767-8322
(b) If given to the Preferred Securities Guarantee Trustee, at the
Preferred Securities Guarantee Trustee's mailing address set forth below (or
such other address as the Preferred Securities Guarantee Trustee may give notice
of to the Holders and the Issuer):
The First National Bank of Chicago
19
<PAGE>
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services Division
Telecopy: (312) 407-1708
(c) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders and the Preferred Securities Guarantee Trustee):
Dynegy Inc.
1000 Louisiana, Suite 5800
Houston, TX 77002
Attention: Kenneth E. Randolph
Telecopy: (713) 507-6808
(d) If given to any Holder, at the address set forth on the books and
records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
-------
This Preferred Securities Guarantee is solely for the benefit of the
Holders and, subject to Section 3.1(a), is not separately transferable from the
Preferred Securities.
SECTION 9.5 GOVERNING LAW
-------------
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.6 Limited Liability.
-----------------
The Holders of the Preferred Securities, in their capacities as such,
shall not be personally liable for any liabilities or obligations of the
Guarantor arising out of this Preferred Securities Guarantee, and the parties
hereby agree that the Holders of the Preferred Securities, in their capacities
as such, shall be entitled to the same limitation of personal liability extended
to the stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware.
20
<PAGE>
21
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
DYNEGY INC., as Guarantor
By:
-------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Preferred Securities Guarantee Trustee
By:
-------------------------------------
Name:
Title:
22
<PAGE>
EXHIBIT 5.1
July 30, 1998
Dynegy Inc.
1000 Louisiana, Suite 5800
Houston, Texas 77002
Ladies and Gentlemen:
We have acted as counsel for Dynegy Inc., a Delaware corporation (the
"Company"), with respect to certain legal matters in connection with the
registration by the Company and Dynegy Capital Trust II, a Delaware statutory
business trust (the "Trust"), under the Securities Act of 1933, as amended (the
"Securities Act"), of the offer and sale (a) by the Company from time to time,
pursuant to Rule 415 under the Securities Act, of (i) unsecured debt
securities, in one or more series, consisting of notes, debentures or other
evidences of indebtedness (the "Debt Securities"), (ii) shares of preferred
stock, par value $.01 per share, of the Company, in one or more series (the
"Preferred Stock"), which may be issued in the form of depositary shares
evidenced by depositary receipts (the "Depositary Shares"), (iii) shares of
common stock, par value $.01 per share, of the Company (the "Common Stock"),
(iv) securities warrants (the "Warrants") to purchase Debt Securities, Preferred
Stock, Depositary Shares or Common Stock and (v) in addition to the Debt
Securities, debentures (the "Trust Debentures") to be purchased by the Trust
with the proceeds from the sale of preferred securities (the "Preferred
Securities") and (b) by the Trust from time to time pursuant to Rule 415 under
the Securities Act of the Trust's Preferred Securities. The aggregate initial
offering prices of the Debt Securities, Preferred Stock, Depositary Shares,
Common Stock, Warrants and Preferred Securities (excluding the aggregate initial
offering price of the Trust Debentures) offered by the Company hereby
(collectively, including the Trust Debentures, the "Securities") will not exceed
$500,000,000 or, if applicable, the equivalent thereof in any other currency or
currency unit. The Securities will be offered in amounts, at prices and on
terms to be determined in light of market conditions at the time of sale and to
be set forth in supplements to the Prospectus contained in the Company's
Registration Statement on Form S-3 to which this opinion is an exhibit.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of (i) the Restated Certificate of Incorporation and Amended
and Restated Bylaws of the Company, each as amended to the date hereof, (ii) the
Indenture between the Company and The First National
<PAGE>
Dynegy Inc.
Page 2
July 30, 1998
Bank of Chicago, as trustee, dated September 26, 1996, as amended and restated
as of March 23, 1998 (the "Senior Debt Indenture") relating to the Senior Debt
Securities, (ii) the Subordinated Indenture between the Company and The First
National Bank of Chicago, as trustee, dated as of July 17, 1998 (the
"Subordinated Debt Indenture") relating to the Subordinated Debt Securities,
(iii) the Certificate of Trust of the Trust dated July 15, 1998 (iv) the
Declaration of Trust, dated July 15, 1998, among the Company and the trustees
named therein, (v) a form of Amended and Restated Declaration of Trust (the
"Declaration") of the Trust to be entered into among the Company, as sponsor,
the trustees of the Trust named therein, and the holders from time to time, in
the form included as an exhibit to the Registration Statement, (vi) a form of
Preferred Securities Guarantee Agreement (the "Preferred Securities Guarantee")
to be entered into by the Company, in the form included as an exhibit to the
Registration Statement, (vii) a form of Common Securities Guarantee Agreement
(the "Common Securities Guarantee") to be entered into by the Company, in the
form included as an exhibit to the Registration Statement, (viii) form of
Indenture (the "Debenture Indenture") to be entered into between the Company and
The First National Bank of Chicago, in the form included as an exhibit to the
Registration Statement, and (ix) such other certificates, statutes and other
instruments and documents as we considered appropriate for purposes of the
opinions hereafter expressed. In addition, we reviewed such questions of law,
as we considered appropriate.
In connection with this opinion, we have assumed that (i) the Registration
Statement, and any amendments thereto (including post-effective amendments),
will have become effective; (ii) a Prospectus Supplement will have been prepared
and filed with the Commission describing the Securities offered thereby; (iii)
all Securities will be issued and sold in compliance with applicable federal and
state securities laws and in the manner stated in the Registration Statement and
the applicable Prospectus Supplement; (iv) the Declaration, the Preferred
Securities Guarantee, the Common Securities Guarantee and the Debenture
Indenture will each be duly authorized, executed and delivered by the parties
thereto in substantially the form reviewed by us; (v) each person signing the
Declaration, the Preferred Securities Guarantee, the Common Securities Guarantee
and the Debenture Indenture will have the legal capacity and authority to do so;
(iv) at the time of any offering or sale of any shares of Common Stock and/or
Preferred Stock, that the Company shall have such number of shares of Common
Stock and/or Preferred Stock, as set forth in such offering or sale, authorized
or created and available for issuance; (v) a definitive purchase, underwriting
or similar agreement with respect to any Securities offered will have been duly
authorized and validly executed and delivered by the Company and the other
parties thereto; and (vi) and Securities issuable upon conversion, exchange or
exercise of any Securities being offered will have been duly authorized, created
and, if appropriate, reserved for issuance upon such conversion, exchange or
exercise.
Based upon the foregoing examination and review, we are of the opinion that:
(i) When (a) the Subordinated Debt Indenture has been duly qualified under
the Trust Indenture Act of 1939, as amended, (b) the Board of Directors
of the Company (or a committee thereof) has taken all necessary
corporate action to approve the issuance and terms of any Debt
Securities, (c) the terms such Debt Securities and of their
<PAGE>
Dynegy Inc.
Page 3
July 30, 1998
issuance and sale have been duly established in conformity with the
applicable Indenture so as not to violate any applicable law or result
in a default under or breach of any agreement or instrument binding upon
the Company and so as to comply with any requirements or restriction
imposed by any court or governmental body having jurisdiction over the
Company, and (d) such Debt Securities have been duly executed and
authenticated in accordance with the applicable Indenture and issued and
sold as contemplated in the Registration Statement, such Debt Securities
will constitute valid and legally binding obligations of the Company,
subject to bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium and
similar laws relating to or affecting creditors' rights generally and to
general equitable principles, and any shares of Common Stock issued upon
conversion of any such Debt Securities will be duly authorized, validly
issued, fully paid and nonassessable.
(ii) When (a) the terms of the issuance of any shares of Common Stock or
any series of Preferred Stock (and Depositary Shares, if applicable) to
be issued and sold by the Company pursuant to the Registration Statement
have been established by the Board of Directors of the Company (or a
committee thereof), and (b) such shares have been issued and sold as
contemplated in the Registration Statement, all such shares will be duly
authorized, validly issued, fully paid and nonassessable.
(iii) When (a) the terms of any Warrants and of their issuance and sale
have been duly established in conformity with the applicable Warrant
Agreement so as not to violate any applicable law or result in a default
under or breach of any agreement or instrument binding upon the Company
and so as to comply with any requirements or restriction imposed by any
court or governmental body having jurisdiction over the Company, and (b)
the Warrants have been duly executed and authenticated in accordance
with the applicable Warrant Agreement and issued and sold as
contemplated in the Registration Statement, the Warrants will constitute
valid and legally binding obligations of the Company, subject to
bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium and similar laws
relating to or affecting creditors' rights generally and to general
equitable principles, and (x) any Debt Securities issued upon exercise
of any such Warrant Agreement will, subject to the qualifications set
forth in paragraph (i) above being met, constitute valid and legally
binding obligations of the Company, subject to bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium and similar laws relating to or
affecting creditors' rights generally and to general equitable
principles, and any shares of Common Stock issued upon conversion of any
such Debt Securities will be duly authorized, validly issued, fully paid
and nonassessable and (y) any shares of Common Stock or Preferred Stock
(or Depositary Shares, if applicable) issued upon exercise of any such
Warrant Agreement will, subject to the
<PAGE>
Dynegy Inc.
Page 4
July 30, 1998
qualifications set forth in paragraph (ii) above being met, be duly
authorized, validly issued, fully paid and nonassessable.
(iv) When (a) the Debenture Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended, (b) the Board of Directors of
the Company (or a committee thereof) has taken all necessary corporate
action to approve the issuance and terms of any Trust Debentures, and
(c) the Trust Debentures have been duly executed and authenticated in
accordance with the Debenture Indenture and issued as contemplated in
the Registration Statement, the Trust Debentures will constitute valid
and legally binding obligations of the Company, subject to bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium and similar laws
relating to or affecting creditors' rights generally and to general
equitable principles.
(v) When the Preferred Securities Guarantee has been duly qualified under
the Trust Indenture Act of 1939, as amended, the Preferred Securities
Guarantee and the Common Securities Guarantee will constitute valid and
legally binding obligations of the Company, subject to bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium and similar laws
relating to or affecting creditors' rights generally and to general
equitable principles.
The foregoing opinions are limited to the laws of the State of New York,
the laws of the United States of America and to the General Corporation Law of
the State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Prospectus forming a
part of the Registration Statement under the caption "Validity of Securities."
In giving this consent, we do not admit that we are within the category of
persons whose consent is required under Section 7 of the Securities Act and the
rules and regulations thereunder.
/s/ Vinson & Elkins L.L.P.
<PAGE>
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger]
July 30, 1998
Dynegy Capital Trust II
c/o Dynegy Inc.
1000 Louisiana, Suite 5800
Houston, TX 77002
Re: Dynegy Capital Trust II
Ladies and Gentlemen:
We have acted as special Delaware counsel for Dynegy Inc., a Delaware
corporation (the "Company"), and Dynegy Capital Trust II, a Delaware business
trust (the "Trust"), in connection with the matters set forth herein. At your
request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated July 15, 1998 (the
"Certificate"), as filed in the office of the Secretary of State of the State of
Delaware (the "Secretary of State") on July 15, 1998;
(b) The Declaration of Trust of the Trust, dated as of July 15, 1998,
among the Company and the trustees of the Trust named therein;
(c) A form of Amended and Restated Declaration of Trust of the Trust
(including Annex I and Exhibits A-1 and A-2 thereto) (the "Declaration"), to be
entered into among the Company, as sponsor, the trustees of the Trust named
therein, and the holders, from time to time, of undivided beneficial interests
in the assets of the Trust, attached as an exhibit to the Registration
Statement;
(d) The Registration Statement on Form S-3 (the "Registration
Statement"), including a preliminary prospectus (the "Prospectus"), relating to
the Preferred Securities of
<PAGE>
Dynegy Capital Trust II
July 30, 1998
Page 2
the Trust representing preferred undivided beneficial interests in the assets of
the Trust (each, a "Preferred Security" and collectively, the "Preferred
Securities"), as proposed to be filed by the Company and the Trust with the
Securities and Exchange Commission on or about July 30, 1998; and
(e) A Certificate of Good Standing for the Trust, dated July 30, 1998,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular,
we have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our
own but rather have relied solely upon the foregoing documents, the statements
and information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Declaration
constitutes the entire agreement among the parties thereto with respect to the
subject matter thereof, including with respect to the creation, operation and
termination of the Trust, and that the Declaration and the Certificate are in
full force and effect and have not been amended, (ii) except to the extent
provided in paragraph 1 below, the due creation or due organization or due
formation, as the case may be, and valid existence in good standing of each
party to the documents examined by us under the laws of the jurisdiction
governing its creation, organization or formation, (iii) the legal capacity of
natural persons who are parties to the documents examined by us, (iv) that each
of the parties to the documents examined by us has the power and authority to
execute and deliver, and to perform its obligations under, such documents, (v)
the due authorization, execution and delivery by all parties thereto of all
documents examined by us, (vi) the receipt by each Person to whom a Preferred
Security is to be issued by the Trust (collectively, the "Preferred Security
Holders") of a certificate substantially in the form attached as Exhibit A-1 to
the Declaration evidencing the Preferred Security and the consideration for the
Preferred Security acquired by it, in accordance with the
<PAGE>
Dynegy Capital Trust II
July 30, 1998
Page 3
Declaration, and as described in the Registration Statement, and (vii) that the
Preferred Securities are issued and sold to the Preferred Security Holders in
accordance with the Declaration, and as described in the Registration Statement.
We have not participated in the preparation of the Registration Statement and
assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Business Trust Act.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We also
consent to Vinson & Elkins L.L.P.'s relying as to matters of Delaware law upon
this opinion in connection with an opinion to be rendered by it on the date
hereof as described in the Prospectus. In addition, we hereby consent to the
use of our name under the heading "Validity of Securities" in the Prospectus.
In giving the foregoing consents, we do not thereby admit that we come within
the category of Persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and
<PAGE>
Dynegy Capital Trust II
July 30, 1998
Page 4
Exchange Commission thereunder. Except as stated above, without our prior
written consent, this opinion may not be furnished or quoted to, or relied upon
by, any other Person for any purpose.
Very truly yours,
/s/ RICHARDS, LAYTON & FINGER
BJK/BJ
<PAGE>
EXHIBIT 12.1
<TABLE>
<CAPTION>
DYNEGY INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES ($ IN 000'S)
- ------------------------------------------------------------------------------------------------------------------------------------
QUARTER YEARS ENDED DECEMBER 31,
ENDED -------------------------------------------------------
31-MAR-98 1997 1996 1995 1994 1993
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Computation of Earnings:
Pre-tax income (loss) from continuing operations $ 12,339 $(149,895) $ 169,645 $ 65,234 $ 44,105 $ 46,776
Undistributed income from equity investees 2,744 4,073 21,729 9,169 3,803 --
-------- -------- -------- -------- -------- --------
Computed Earnings (Loss) 9,595 (153,968) 147,916 56,065 40,302 46,776
-------- -------- -------- -------- -------- --------
Fixed Charges:
Interest costs:
Expensed 16,005 63,455 46,202 34,475 1,114 642
Capitalized 1,036 8,800 1,200 1,028 -- --
Amortization of financing costs 287 943 772 1,132 1,267 1,130
Other -- -- 203 -- -- --
Amortization of Premium (1,454) (6,768) (4,892) (3,216) -- --
Minority interest in income of a subsidiary 4,158 9,841 -- -- -- --
Rental expense representative of interest factor 4,708 13,572 4,171 3,719 955 801
-------- -------- -------- -------- -------- --------
Total Fixed Charges 24,740 89,843 47,656 37,138 3,336 2,573
-------- -------- -------- -------- -------- --------
Earnings Before Income Taxes and Fixed Charges $ 33,299 $ (72,925) $ 194,169 $ 92,175 $ 43,638 $ 49,349
======== ======== ======== ======== ======== ========
Ratio of Earnings to Fixed Charges 1.35 (a) 4.07 2.48 13.08 19.18
======== ======== ======== ======== ======== ========
</TABLE>
(a) Earnings are inadequate to cover fixed charges for the year ended December
31, 1997, by approximately $72.9 million.
Ratio2
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 20, 1998
included in the Form 10-K of NGC Corporation (now called Dynegy Inc.) for the
year ended December 31, 1997 and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
------------------------------------
Arthur Andersen LLP
Houston, Texas
July 30, 1998
<PAGE>
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
____________________________
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
_____________________________
DYNEGY INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE 94-3248415
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
1000 LOUISIANA, SUITE 5800
HOUSTON, TEXAS 77002
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)
<PAGE>
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.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(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
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
<PAGE>
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 15th day of July, 1998.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
By /s/ John R. Prendiville
John R. Prendiville
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits bearing
identical numbers in Item 16 of the Form T-1 of The First National Bank of
Chicago, filed as Exhibit 25.1 to the Registration Statement on Form S-3 of
SunAmerica, Inc., filed with the Securities and Exchange Commission on October
25, 1996 (Registration No. 333-14201).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
July 15, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Dynegy
Inc. and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ John R. Prendiville
John R. Prendiville
Vice President
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands C400
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) 0081 4,267,336 1.a.
b. Interest-bearing balances(2) 0071 6,893,837 1.b.
2. Securities
a. Held-to-maturity securities (from
Schedule RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from
Schedule RC-B, column D)................... 1773 5,691,722 2.b.
3. Federal funds sold and securities purchased under agreements to
resell 1350 6,339,940 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) RCFD 2122 25,202,984 4.a.
b. LESS: Allowance for loan and lease losses RCFD 3123 419,121 4.b.
c. LESS: Allocated transfer risk reserve RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) 2125 24,783,863 4.d.
5. Trading assets (from Schedule RD-D) 3545 6,703,332 5.
6. Premises and fixed assets (including capitalized leases) 2145 743,426 6.
7. Other real estate owned (from Schedule RC-M) 2150 7,727 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 2130 134,959 8.
9. Customers' liability to this bank on acceptances outstanding 2155 644,340 9.
10. Intangible assets (from Schedule RC-M) 2143 268,501 10.
11. Other assets (from Schedule RC-F) 2160 2,004,432 11.
12. Total assets (sum of items 1 through 11) 2170 58,483,415 12.
</TABLE>
- -------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands BIL MIL THOU
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) RCON 2200 21,756,846 13.a
(1) Noninterest-bearing(1) RCON 6631 9,197,227 13.a.1
(2) Interest-bearing RCON 6636 559,619 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) RCFN 2200 14,811,410 13.b.
(1) Noninterest bearing RCFN 6631 332,801 13.b.1
(2) Interest-bearing RCFN 6636 14,478,609 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,535,422 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 43,763 15.a
b. Trading Liabilities(from Schedule RC-D)................... RCFD 3548 6,523,239 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less RCFD 2332 1,360,165 16.a
b. With a remaining maturity of than one year through three years A547 576,492 16.b
c. With a remaining maturity of more than three years............ A548 703,981 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding RCFD 2920 644,341 18
19. Subordinated notes and debentures (2) RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G) RCFD 2930 1,322,077 20
21. Total liabilities (sum of items 13 through 20) RCFD 2948 53,987,736 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus RCFD 3838 0 23
24. Common stock RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,999,001 25
26. a. Undivided profits and capital reserves RCFD 3632 1,273,239 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities RCFD 8434 24,096 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (1,515) 27
28. Total equity capital (sum of items 23 through 27) RCFD 3210 4,495,679 28
29. Total liabilities and equity capital (sum of items 21 and 28) RCFD 3300 58,483,415 29
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the Number
bank by independent external auditors as of any date during 1996................RCFD 6724.............N/A M.1
1 = Independent audit of the bank conducted in 4. = Directors' examination of the bank
accordance with generally accepted auditing performed by other external auditors
standards by a certified public accounting firm (may be required by state chartering
which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding 5 = Review of the bank's financial statements
company conducted in accordance with generally by external auditors
accepted auditing standards by a certified public 6 = Compilation of the bank's financial
accounting firm which submits a report on the statements by external auditors
consolidated holding company (but not on the bank 7 = Other audit procedures (excluding tax
separately) preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing
standards by a certified public accounting firm
(may be required by state chartering authority)
____________________
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
(2) Includes limited-life preferred stock and related surplus.
</TABLE>
<PAGE>
EXHIBIT 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
____________________________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
_____________________________
Dynegy Inc.
(Exact name of obligor as specified in its charter)
Delaware 94-3248415
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1000 Louisiana, Suite 5800
Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
Subordinated Debt Securities
(Title of Indenture Securities)
<PAGE>
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.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(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
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
<PAGE>
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 15th day of July, 1998.
The First National Bank of Chicago,
Trustee
By /s/ John R. Prendiville
John R. Prendiville
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits bearing
identical numbers in Item 16 of the Form T-1 of The First National Bank of
Chicago, filed as Exhibit 25.1 to the Registration Statement on Form S-3 of
SunAmerica, Inc., filed with the Securities and Exchange Commission on October
25, 1996 (Registration No. 333-14201).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
July 15, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Dynegy
Inc. and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By /s/ John R. Prendiville
John R. Prendiville
Vice President
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31,1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in C400
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) 0081 4,267,336 1.a.
b. Interest-bearing balances(2) 0071 6,893,837 1.b.
2. Securities
a. Held-to-maturity securities(from
Schedule RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from
Schedule RC-B, column D)................... 1773 5,691,722 2.b.
3. Federal funds sold and securities purchased under agreements to
resell 1350 6,339,940 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) RCFD 2122 25,202,984 4.a.
b. LESS: Allowance for loan and lease losses RCFD 3123 419,121 4.b.
c. LESS: Allocated transfer risk reserve RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) 2125 24,783,863 4.d.
5. Trading assets (from Schedule RD-D) 3545 6,703,332 5.
6. Premises and fixed assets (including capitalized leases) 2145 743,426 6.
7. Other real estate owned (from Schedule RC-M) 2150 7,727 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 2130 134,959 8.
9. Customers' liability to this bank on acceptances outstanding 2155 644,340 9.
10. Intangible assets (from Schedule RC-M) 2143 268,501 10.
11. Other assets (from Schedule RC-F) 2160 2,004,432 11.
12. Total assets (sum of items 1 through 11) 2170 58,483,415 12.
</TABLE>
- -------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands BIL MIL THOU
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) RCON 220 0 21,756,846 13.a
(1) Noninterest-bearing(1) RCON 663 1 9,197,227 13.a.1
(2) Interest-bearing RCON 663 6 559,619 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) RCFN 220 0 14,811,410 13.b.
(1) Noninterest bearing RCFN 663 1 332,801 13.b.1
(2) Interest-bearing RCFN 663 6 14,478,609 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,535,422 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 43,763 15.a
b. Trading Liabilities(from Schedule RC-D)................... RCFD 3548 6,523,239 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less RCFD 2332 1,360,165 16.a
b. With a remaining maturity of than one year through three years A547 576,492 16.b
c. With a remaining maturity of more than three years............ A548 703,981 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding RCFD 2920 644,341 18
19. Subordinated notes and debentures (2) RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G) RCFD 2930 1,322,077 20
21. Total liabilities (sum of items 13 through 20) RCFD 2948 53,987,736 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus RCFD 3838 0 23
24. Common stock RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,999,001 25
26. a. Undivided profits and capital reserves RCFD 3632 1,273,239 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities RCFD 8434 24,096 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (1,515) 27
28. Total equity capital (sum of items 23 through 27) RCFD 3210 4,495,679 28
29. Total liabilities and equity capital (sum of items 21 and 28) RCFD 3300 58,483,415 29
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the Number
bank by independent external auditors as of any date during 1996................RCFD 6724.............N/A M.1
1 = Independent audit of the bank conducted in 4. = Directors' examination of the bank
accordance with generally accepted auditing performed by other external auditors
standards by a certified public accounting firm (may be required by state chartering
which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding 5 = Review of the bank's financial statements
company conducted in accordance with generally by external auditors
accepted auditing standards by a certified public 6 = Compilation of the bank's financial
accounting firm which submits a report on the statements by external auditors
consolidated holding company (but not on the bank 7 = Other audit procedures (excluding tax
separately) preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing
standards by a certified public accounting firm
(may be required by state chartering authority)
____________________
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
(2) Includes limited-life preferred stock and related surplus.
</TABLE>
<PAGE>
EXHIBIT 25.3
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
____________________________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
_____________________________
Dynegy Inc.
(Exact name of obligor as specified in its charter)
Delaware 94-3248415
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1000 Louisiana, Suite 5800
Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
Guarantee of Preferred Securities
of Dynegy Capital Trust II
(Title of Indenture Securities)
<PAGE>
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.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(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
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
<PAGE>
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 15th day of July, 1998.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
By /s/ John R. Prendiville
John R. Prendiville
Vice President
* EXHIBIT 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING
IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF
CHICAGO, FILED AS EXHIBIT 25.1 TO THE REGISTRATION STATEMENT ON FORM S-3 OF
SUNAMERICA, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER
25, 1996 (REGISTRATION NO. 333-14201).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
July 15, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of a guarantee agreement between
Dynegy Inc. and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ JOHN R. PRENDIVILLE
John R. Prendiville
Vice President
<PAGE>
<TABLE>
<S> <C> <C>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the quarter.
SCHEDULE RC--BALANCE SHEET
DOLLAR AMOUNTS IN C400
--------
ASSETS
<S> <C> <C> <C>
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) 0081 4,267,336 1.a.
b. Interest-bearing balances(2) 0071 6,893,837 1.b.
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 5,691,722 2.b.
3. Federal funds sold and securities purchased under agreements to
resell 1350 6,339,940 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) RCFD 2122 25,202,984 4.a.
b. LESS: Allowance for loan and lease losses RCFD 3123 419,121 4.b.
c. LESS: Allocated transfer risk reserve RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance,
and reserve (item 4.a minus 4.b and 4.c) 2125 24,783,863 4.d.
5. Trading assets (from Schedule RD-D) 3545 6,703,332 5.
6. Premises and fixed assets (including capitalized leases) 2145 743,426 6.
7. Other real estate owned (from Schedule RC-M) 2150 7,727 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 2130 134,959 8.
9. Customers' liability to this bank on acceptances outstanding 2155 644,340 9.
10. Intangible assets (from Schedule RC-M) 2143 268,501 10.
11. Other assets (from Schedule RC-F) 2160 2,004,432 11.
12. Total assets (sum of items 1 through 11) 2170 58,483,415 12.
- -------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) RCON 2200 21,756,846 13.a
(1) Noninterest-bearing(1) RCON 6631 9,197,227 13.a.1
(2) Interest-bearing RCON 6636 559,619 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) RCFN 2200 14,811,410 13.b.
(1) Noninterest bearing RCFN 6631 332,801 13.b.1
(2) Interest-bearing RCFN 6636 14,478,609 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,535,422 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 43,763 15.a
b. Trading Liabilities (from Schedule RC-D) RCFD 3548 6,523,239 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less RCFD 2332 1,360,165 16.a
b. With a remaining maturity of than one year through
three years A547 576,492 16.b
c. With a remaining maturity of more than three years A548 703,981 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding RCFD 2920 644,341 18
19. Subordinated notes and debentures (2) RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G) RCFD 2930 1,322,077 20
21. Total liabilities (sum of items 13 through 20) RCFD 2948 53,987,736 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus RCFD 3838 0 23
24. Common stock RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,999,001 25
26. a. Undivided profits and capital reserves RCFD 3632 1,273,239 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities RCFD 8434 24,096 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (1,515) 27
28. Total equity capital (sum of items 23 through 27) RCFD 3210 4,495,679 28
29. Total liabilities and equity capital (sum of items 21 and 28) RCFD 3300 58,483,415 29
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement
below that best describes the most comprehensive level of
auditing work performed for the bank by independent external Number
auditors as of any date during 1996 RCFD 6724 N/A M.1
<S> <C> <C> <C>
1 = Independent audit of the bank conducted in 4. = Directors' examination of the bank
accordance with generally accepted auditing performed by other external auditors (may be
standards by a certified public accounting required by state chartering authority)
firm which submits a report on the bank 5. = Review of the bank's financial statements
2 = Independent audit of the bank's parent by external auditors
holding company conducted in accordance with 6. = Compilation of the bank's financial
generally accepted auditing standards by a statements by external auditors
certified public accounting firm which submits 7. = Other audit procedures (excluding tax preparation
a report on the consolidated holding company work)
(but not on the bank separately) 8. = No external audit work
3 = Directors' examination of the bank conducted in
accordance with generally accepted auditing
standards by a certified public accounting firm
(may be required by state chartering authority)
</TABLE>
____________________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
<PAGE>
EXHIBIT 25.4
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
____________________________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
_____________________________
Dynegy Capital Trust II
(Exact name of obligor as specified in its charter)
Delaware To Be Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1000 Louisiana, Suite 5800
Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
Preferred Securities
(Title of Indenture Securities)
<PAGE>
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.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(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
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
<PAGE>
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 15th day of July, 1998.
The First National Bank of Chicago,
Trustee
By /s/ John R. Prendiville
John R. Prendiville
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits bearing
identical numbers in Item 16 of the Form T-1 of The First National Bank of
Chicago, filed as Exhibit 25.1 to the Registration Statement on Form S-3 of
SunAmerica, Inc., filed with the Securities and Exchange Commission on October
25, 1996 (Registration No. 333-14201).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
July 15, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Dynegy
Capital Trust II and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
The First National Bank of Chicago
By /s/ John R. Prendiville
John R. Prendiville
Vice President
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31,1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in C400
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) 0081 4,267,336 1.a.
b. Interest-bearing balances(2) 0071 6,893,837 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 5,691,722 2.b.
3. Federal funds sold and securities purchased under agreements to
resell 1350 6,339,940 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 25,202,984 4.a.
b. LESS: Allowance for loan and lease losses RCFD 3123 419,121 4.b.
c. LESS: Allocated transfer risk reserve RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) 2125 24,783,863 4.d.
5. Trading assets (from Schedule RD-D) 3545 6,703,332 5.
6. Premises and fixed assets (including capitalized leases) 2145 743,426 6.
7. Other real estate owned (from Schedule RC-M) 2150 7,727 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 2130 134,959 8.
9. Customers' liability to this bank on acceptances outstanding 2155 644,340 9.
10. Intangible assets (from Schedule RC-M) 2143 268,501 10.
11. Other assets (from Schedule RC-F) 2160 2,004,432 11.
12. Total assets (sum of items 1 through 11) 2170 58,483,415 12.
</TABLE>
- -------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) RCON 2200 21,756,846 13.a
(1) Noninterest-bearing(1) RCON 6631 9,197,227 13.a.1
(2) Interest-bearing RCON 6636 559,619 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) RCFN 2200 14,811,410 13.b.
(1) Noninterest bearing RCFN 6631 332,801 13.b.1
(2) Interest-bearing RCFN 6636 14,478,609 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,535,422 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 43,763 15.a
b. Trading Liabilities (from Schedule RC-D) RCFD 3548 6,523,239 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less RCFD 2332 1,360,165 16.a
b. With a remaining maturity of than one year through
three years A547 576,492 16.b
c. With a remaining maturity of more than three years A548 703,981 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding RCFD 2920 644,341 18
19. Subordinated notes and debentures (2) RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G) RCFD 2930 1,322,077 20
21. Total liabilities (sum of items 13 through 20) RCFD 2948 53,987,736 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus RCFD 3838 0 23
24. Common stock RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,999,001 25
26. a. Undivided profits and capital reserves RCFD 3632 1,273,239 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities RCFD 8434 24,096 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (1,515) 27
28. Total equity capital (sum of items 23 through 27) RCFD 3210 4,495,679 28
29. Total liabilities and equity capital (sum of items 21 and 28) RCFD 3300 58,483,415 29
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement
below that best describes the most comprehensive level of
auditing work performed for the bank by independent external Number
auditors as of any date during 1996 RCFD 6724 N/A M.1
<S> <C> <C> <C>
1 = Independent audit of the bank conducted in 4. = Directors' examination of the bank
accordance with generally accepted auditing performed by other external auditors (may be
standards by a certified public accounting required by state chartering authority)
firm which submits a report on the bank 5. = Review of the bank's financial statements
2 = Independent audit of the bank's parent by external auditors
holding company conducted in accordance with 6. = Compilation of the bank's financial
generally accepted auditing standards by a statements by external auditors
certified public accounting firm which submits 7. = Other audit procedures (excluding tax preparation
a report on the consolidated holding company work)
(but not on the bank separately) 8. = No external audit work
3 = Directors' examination of the bank conducted in
accordance with generally accepted auditing
standards by a certified public accounting firm
(may be required by state chartering authority)
</TABLE>
____________________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
