<PAGE>
As filed with the Securities and Exchange Commission on November 16, 1999
Registration No. 333-87363
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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EVEREST REINSURANCE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
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Delaware 22-3263609
(State of incorporation) (I.R.S. Employer Identification No.)
477 Martinsville Road Janet J. Burak, Esq.
P.O. Box 830 477 Martinsville Road
Liberty Corner, New Jersey 07938 P.O. Box 830
(908) 604-3000 Liberty Corner, New Jersey 07938
(Address, including zip code, and (908) 604-3000
telephone number,including area (Name, address, including zip code,
code, of Registrant's principal and telephone number, including area
executive offices) code, of agent for service)
--------------
EVEREST RE CAPITAL TRUST
(Exact name of registrant as specified in its certificate of trust)
Delaware Applied for
(State of incorporation) (I.R.S. Employer Identification No.)
c/o Everest Reinsurance Holdings, Janet J. Burak, Esq.
Inc. 477 Martinsville Road
477 Martinsville Road P.O. Box 830
P.O. Box 830 Liberty Corner, New Jersey 07938
Liberty Corner, New Jersey 07938 (908) 604-3000
(908) 604-3000 (Name, address, including zip code,
(Address, including zip code, and and telephone number, including area
telephone number,including area code, code, of agent for service)
of registrant's principal executive
offices)
Copies to:
Richard Warren Shepro, Esq. Janet J. Burak, Esq.
Carol S. Rivers, Esq. Everest Reinsurance Holdings, Inc.
Mayer, Brown & Platt 477 Martinsville Road
190 South LaSalle Street P.O. Box 830
Chicago, Illinois 60603-3441 Liberty Corner, New Jersey 07938
(312) 782-0600 (904) 604-3000
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Approximate date of commencement of the proposed sale to the public: From
time to time after this Registration Statement becomes effective.
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 effective 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. [_]
<PAGE>
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Title of Each Class of Securities Amount to be Proposed Maximum Amount of
to be Registered(1) Registered(1) Aggregate Offering Price(2) Registration Fee
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<S> <C> <C> <C>
Everest Reinsurance Holdings, Inc. Senior Notes.
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Everest Reinsurance Holdings, Inc.
JuniorSubordinated Notes....................
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Everest Re Capital Trust Preferred
Securities...................................
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Everest Reinsurance Holdings, Inc. Guarantee of
Everest Re Capital
Trust Preferred Securities(3)...............
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Total........................................ $450,000,000 $450,000,000 $125,100(4)
</TABLE>
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(1) An indeterminate principal amount or number of senior notes and junior
subordinated notes of Everest Reinsurance Holdings, Inc. and an
indeterminate number of preferred securities of Everest Re Capital Trust
as may from time to time be issued at indeterminate prices, with an
aggregate offering price not to exceed $450,000,000. Junior subordinated
notes may be issued and sold to Everest Re Capital Trust in which event
the junior subordinated notes may later be distributed to the holders of
preferred securities.
(2) Estimated solely for the purpose of calculating the registration fee,
which is calculated in accordance with Rule 457(o) of the rules and
regulations under the Securities Act of 1933. Rule 457(o) permits the
registration fee to be calculated on the basis of the maximum offering
price of all of the securities listed and, therefore, the table does not
specify by each class information as to the amount to be registered, the
proposed maximum offering price per unit or the proposed maximum aggregate
offering price.
(3) Includes the rights of holders of the preferred securities under the
guarantee of preferred securities and the obligations of Everest
Reinsurance Holdings, Inc. under the trust agreement of Everest Re Capital
Trust, the indenture for the junior subordinated notes and any related
supplemental indenture and the expense agreement, all of which are
described in this Registration Statement. No separate consideration will
be received for any of such guarantee or obligations.
(4) Previously paid.
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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 this Registration
Statement shall become effective on such date as the Securities and Exchange
Commission, acting pursuant to said Section 8(a), may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus is not complete and may be +
+changed. These securities may not be sold until the registration statement +
+filed with the Securities and Exchange Commission is effective. This +
+preliminary prospectus is not an offer to sell nor does it seek an offer to +
+buy these securities in any jurisdiction where the offer or sale is not +
+permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion. Dated November 16, 1999.
PROSPECTUS
$450,000,000
EVEREST REINSURANCE HOLDINGS, INC.
Senior Notes, Junior Subordinated Notes and Guarantee
EVEREST RE CAPITAL TRUST
Preferred Securities Guaranteed by
Everest Reinsurance Holdings, Inc.
-----------
We may offer and sell the securities from time to time in one or more
offerings. This prospectus provides you with a general description of the
securities that we may offer.
Each time we sell securities we will provide a supplement to this prospectus
that contains specific information about the offering and the terms of the
securities. You should carefully read this prospectus and any supplement before
you invest in any of our securities.
Everest Reinsurance Holdings, Inc. may offer and sell the following
securities:
. senior notes
. junior subordinated notes
Everest Re Capital Trust may offer and sell preferred securities guaranteed
by Everest Holdings.
-----------
If we decide to list any of these securities on a national securities
exchange upon issuance, the supplements to this prospectus will identify the
exchange and state when we expect trading to begin.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
We may offer these securities through underwriters or agents or directly to
institutional investors. The supplements to this prospectus will provide the
specific terms of the plan of distribution.
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Prospectus dated , 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ABOUT THIS PROSPECTUS..................................................... 1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS...................... 1
WHERE YOU CAN FIND MORE INFORMATION....................................... 2
EVEREST HOLDINGS.......................................................... 3
THE PROPOSED RESTRUCTURING................................................ 5
THE TRUST................................................................. 8
USE OF PROCEEDS........................................................... 9
RATIO OF EARNINGS TO FIXED CHARGES........................................ 9
ACCOUNTING TREATMENT...................................................... 9
DESCRIPTION OF THE SENIOR NOTES........................................... 10
DESCRIPTION OF THE JUNIOR SUBORDINATED NOTES.............................. 19
DESCRIPTION OF THE PREFERRED SECURITIES................................... 29
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE......................... 36
DESCRIPTION OF THE EXPENSE AGREEMENT...................................... 38
RELATIONSHIP AMONG THE PREFERRED SECURITIES, PREFERRED SECURITIES
GUARANTEE AND JUNIOR SUBORDINATED NOTES HELD BY THE TRUST................ 38
PLAN OF DISTRIBUTION...................................................... 39
EXPERTS................................................................... 40
VALIDITY OF THE SECURITIES................................................ 40
</TABLE>
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a "shelf" registration statement that we filed
with the SEC. By using a shelf registration statement, we may sell up to
$450,000,000 offering price of any combination of the securities described in
this prospectus from time to time and in one or more offerings. This prospectus
only provides you with a general description of the securities that we may
offer. Each time we sell securities, we will provide a supplement to this
prospectus that contains specific information about the terms of the
securities. Before purchasing any securities, you should carefully read both
this prospectus and any supplement, together with the additional information
described under the heading "Where You Can Find More Information".
Everest Re Capital Trust, referred to in this prospectus as the trust, has
no independent function other than to issue securities and to purchase junior
subordinated notes from Everest Reinsurance Holdings, Inc., referred to in this
prospectus as Everest Holdings. This prospectus does not contain separate
financial statements for the trust. Everest Holdings files consolidated
financial information with the SEC that includes the trust. This prospectus
also does not contain separate additional information about the trust because
it is a wholly owned subsidiary of Everest Holdings and the trust is issuing
non-convertible, investment grade securities, which are fully and
unconditionally guaranteed by Everest Holdings. We do not believe that
additional financial or other information regarding the trust would be useful
to you.
You should rely only on the information contained or incorporated by
reference in this prospectus and in any supplement. "Incorporate by reference"
means that we can disclose important information to you by referring you to
another document filed separately with the SEC. We have not authorized any
other person to provide you with different information. If anyone provides you
with different or inconsistent information, you should not rely on it. We will
not make an offer to sell these securities in any jurisdiction where the offer
or sale is not permitted. You should assume that the information appearing in
this prospectus and any supplement to this prospectus is accurate as of the
dates on their covers. Our business, financial condition, results of operations
and prospects may have changed since that date.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, any prospectus supplement and the information incorporated
by reference in them may contain forward-looking statements within the meaning
of the federal securities laws. Everest Holdings intends these forward-looking
statements to be covered by the safe harbor provisions for forward-looking
statements in these sections. In some cases, you can identify these statements
by our use of forward-looking words such as "may", "will", "should",
"anticipate", "estimate", "expect", "plan", "believe", "predict", "potential"
or "intend". You should be aware that these statements and any other forward-
looking statements in these documents only reflect our expectations and are not
guarantees of performance. These statements involve risks, uncertainties and
assumptions. Actual events or results may differ materially from our
expectations. Important factors that could cause our actual results to be
materially different from our expectations include those discussed in any of
these documents under the caption "Risk Factors". The safe harbor provisions
for forward-looking statements only apply to companies who have previously
offered securities to the public. Because the trust's offer of the preferred
securities constitutes its initial public offering of securities, the safe
harbor provisions of the federal securities laws do not apply to it. We
undertake no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.
1
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
Available Information
This prospectus is part of a registration statement that we filed with the
SEC. The registration statement, including the attached exhibits, contains
additional relevant information about Everest Holdings and the trust. The rules
and regulations of the SEC allow us to omit some of the information included in
the registration statement from this prospectus. In addition, Everest Holdings
files reports, proxy statements and other information with the SEC under the
Exchange Act. You can read and copy any of this information at the following
locations of the SEC:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois
60661-2551
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. You may obtain information on the operation of
the SEC's Public Reference Room in Washington, D.C. by calling the SEC at 1-
800-SEC-0330.
The SEC also maintains an Internet web site that contains reports, proxy
statements and other information about issuers, like Everest Holdings, that
file electronically with the SEC. The address of that site is
http://www.sec.gov. The SEC file number for documents filed by Everest Holdings
under the Exchange Act is 1-13816.
Everest Holdings' common stock is listed on the New York Stock Exchange and
its stock symbol is "RE". You can inspect reports, proxy statements and other
information concerning Everest Holdings at the offices of the New York Stock
Exchange at 20 Broad Street, New York, New York 10005.
Incorporation by Reference
The rules of the SEC allow us to incorporate by reference information into
this prospectus. The information incorporated by reference is deemed to be part
of this prospectus, except for any information that is superseded by
information included directly in this prospectus or in any prospectus
supplement, and later information that we file with the SEC will automatically
update and supersede that information. This prospectus incorporates by
reference the documents set forth below that we have previously filed or will
file with the SEC. These documents contain important information about Everest
Holdings.
. Annual Report on Form 10-K of Everest Holdings for the year ended
December 31, 1998;
. Quarterly Reports on Form 10-Q of Everest Holdings for quarters ended
March 31, 1999, June 30, 1999 and September 30, 1999; and
. All additional documents that we file with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act between the date of this
prospectus and the termination of the offering of securities described in
any prospectus supplement.
Upon request, Everest Holdings will provide without charge to each person to
whom a copy of this prospectus has been delivered a copy of any and all of
these filings. You may request a copy of these filings by writing or
telephoning us at:
Everest Reinsurance Holdings, Inc.
477 Martinsville Road
P.O. Box 830
Liberty Corner, New Jersey 07938-0830
Attention: Janet J. Burak
Telephone: (908) 604-3000
2
<PAGE>
EVEREST HOLDINGS
Business Operations
Everest Holdings was established in 1993 in Delaware to serve as the parent
holding company of Everest Reinsurance Company, referred to in this prospectus
as Everest Re, a property and casualty reinsurer formed in 1973. Until October
6, 1995, Everest Holdings was an indirect, wholly-owned subsidiary of The
Prudential Insurance Company of America. On October 6, 1995, The Prudential
sold its entire interest in Everest Holdings' shares of common stock in an
initial public offering.
Everest Holdings, through Everest Re, underwrites property and casualty
reinsurance on a treaty and facultative basis for insurance and reinsurance
companies in the United States and selected international markets. Reinsurance
is a form of insurance purchased by an insurance company to indemnify it for
all or part of the loss that it may sustain under insurance contracts that it
has written. Insurance companies purchasing reinsurance are often referred to
as ceding companies or reinsureds. Underwriting reinsurance on a treaty basis
means that Everest Re reinsures one or more insurance companies pursuant to an
agreement called a treaty, which sets forth the terms and conditions of the
reinsurance. Treaties generally automatically reinsure a specific line or class
of business. Underwriting reinsurance on a facultative basis means that Everest
Re reinsures one specific policy as opposed to the reinsurance of a specific
line or class of business.
Everest Re writes reinsurance both through brokers and directly with ceding
companies, giving it the flexibility to pursue business regardless of the
ceding company's preferred reinsurance purchasing method. Everest Re and its
subsidiaries also write primary property and casualty insurance. Primary
insurance is purchased by insureds to pay amounts to them for economic losses
sustained from unexpected events. Based on industry data at December 31, 1998
published by the Reinsurance Association of America, Everest Re is the sixth
largest reinsurance company in the United States, ranked by statutory surplus.
Statutory surplus is the amount by which the assets of an insurer exceed the
insurer's liabilities, including the amounts required by law to be established
as reserves for the insurer's insurance obligations.
Following is a summary of Everest Holdings' and Everest Re's operating
subsidiaries:
. Everest National Insurance Company, an Arizona insurance company, is
licensed in 42 states and the District of Columbia and is authorized to
write primary insurance in the states in which it is licensed to write
insurance, often called writing insurance on an admitted basis.
. Everest Insurance Company of Canada, a Canadian insurance company, is
licensed in all Canadian provinces and territories and is federally
licensed to write primary insurance under the Insurance Companies Act of
Canada.
. Everest Indemnity Insurance Company, a Delaware insurance company,
engages in the excess and surplus lines insurance business in the United
States. Excess and surplus lines insurance is specialty property and
liability coverage that an insurer not licensed to write insurance in a
particular state is permitted to provide when the specific specialty
coverage is unavailable from admitted insurers. This is often called
writing insurance on a non-admitted basis. Everest Indemnity is licensed
in Delaware and is eligible to write business in 39 states, the District
of Columbia and the Commonwealth of Puerto Rico on a non-admitted basis.
. Mt. McKinley Managers, L.L.C., a New Jersey limited liability company, is
licensed in New Jersey as an insurance producer, which is any
intermediary, such as an agency or broker, which acts as the conduit
between an insurance company and an insured. Mt. McKinley holds licenses
to allow it to act as an insurance producer in connection with policies
written on both an admitted and a surplus lines basis. After a 1998
acquisition of the assets of insurance agency operations in Alabama and
Georgia, the continuing insurance agency operations are now carried on by
subsidiaries of Mt. McKinley. These subsidiaries are WorkCare Southeast,
Inc., an Alabama insurance agency, and WorkCare Southeast of Georgia,
Inc., a Georgia insurance agency.
3
<PAGE>
. Everest Re Holdings, Ltd., a Bermuda company formed in 1998, owns Everest
Re Ltd., a United Kingdom company that is in the process of being
dissolved because its reinsurance operations have been converted into
branch operations of Everest Re.
Our products include a full range of property and casualty coverages,
including marine, aviation, surety, errors and omissions, directors' and
officers', medical malpractice, other specialty liability lines, accident and
health, workers compensation, non-standard auto and loss portfolios. Our
distribution channels include both the direct and broker reinsurance markets,
international and domestic markets, reinsurance, both treaty and facultative,
and insurance, both admitted and non-admitted.
Our business strategies include effective management of the underwriting
cycle, which refers to the tendency of insurance premiums, profits and the
demand for and availability of coverage to rise and fall over time. We also
seek to manage catastrophe exposures and control expenses and retrocessional
costs, which are incurred when reinsurers purchase reinsurance. Our
underwriting strategies seek to capitalize on our staff's expertise and our
flexibility to offer multiple products by underwriting reinsurance through
brokers and directly with ceding companies and by writing primary insurance on
an admitted and non-admitted basis in a cost efficient manner. Efforts to
control expenses and to operate in a cost efficient manner are a continuing
focus for us.
Our underwriting strategy emphasizes underwriting profitability rather than
premium volume, the writing of specialized risks and the integration of
underwriting expertise across all underwriting units. Key elements of this
strategy are prudent risk selection, appropriate pricing through strict
underwriting discipline and adjustment of our business mix to respond to
changing market conditions. We focus on reinsuring companies that effectively
manage the underwriting cycle through proper analysis and pricing of underlying
risks and whose underwriting guidelines and performance are compatible with our
objectives.
Our underwriting strategy also emphasizes flexibility and responsiveness to
changing market conditions, such as increased demand or favorable pricing
trends. We believe that our existing strengths, including our broad
underwriting expertise, international presence, diverse distribution
capabilities and substantial capital, facilitate adjustments to our mix of
business geographically, by line of business and by type of coverage. We
believe that this allows us to capitalize on those market opportunities that
provide the greatest potential for underwriting profitability. Our primary
insurance infrastructure further facilitates this strategy by permitting us to
develop business that requires us to issue primary insurance policies. We
carefully monitor our mix of business to avoid inappropriate concentrations of
geographic or other risk.
Our underwriting guidelines seek to limit the accumulation of known risks in
exposed areas, to require that business that is exposed to catastrophe losses
be written with appropriate geographic spread and to maintain a cost-effective
retrocession program. Our underwriting guidelines also seek to better reflect
the relationship between premiums and risk assumed while maintaining our
probable maximum loss at appropriate levels.
Our principal executive offices are located at 477 Martinsville Road, P.O.
Box 830, Liberty Corner, New Jersey 07938-0830, and our telephone number is
(908) 604-3000.
4
<PAGE>
THE PROPOSED RESTRUCTURING
On September 16, 1999, the board of directors of Everest Holdings approved a
plan under which Everest Holdings and its subsidiaries would be restructured as
follows:
. Everest Reinsurance Group, Ltd., a company organized in Bermuda and with
its principal office in Barbados, referred to in this prospectus as
Everest Group, will become the new publicly-owned parent corporation of
Everest Holdings
. Everest Holdings, as a subsidiary of Everest Group, will continue to act
as the holding company for the subsidiaries of Everest Holdings in the
United States and Canada.
. Everest Group will also be the holding corporation for a new Bermuda-
based reinsurance subsidiary, Everest Reinsurance (Bermuda) Ltd.,
referred to in this prospectus as Everest Bermuda.
The restructuring will be accomplished in the following steps:
. Everest Holdings has organized a subsidiary, Everest Group, under the
laws of Bermuda and established its principal office in Barbados.
. Everest Group has organized a Delaware subsidiary, Everest Merger
Corporation, referred to in this prospectus as Everest Merger.
. Everest Merger will be merged into Everest Holdings, with Everest
Holdings as the surviving corporation. When the merger is completed,
Everest Holdings will become a subsidiary of Everest Group and each
outstanding share of common stock of Everest Holdings will be converted
into one common share of Everest Group.
. After the merger is completed, Everest Group will capitalize Everest
Bermuda, its Bermuda-based reinsurance subsidiary.
In connection with the restructuring, Everest Group also intends to form a
new Delaware subsidiary, Everest Global Services, Inc., to perform
administrative and back office functions for Everest Group and its U.S. based
and non-U.S. based insurance subsidiaries.
We intend to call a special meeting of our stockholders to consider and vote
on the proposed restructuring. If our stockholders approve the proposed
restructuring at the special meeting, we anticipate that the proposed
restructuring will be completed immediately thereafter.
The offerings of the securities described in this prospectus are not
contingent on the restructuring being approved or completed. We intend to offer
securities when market conditions are favorable.
5
<PAGE>
The present corporate structure of Everest Holdings and its subsidiaries and
the corporate structure that would result from the proposed restructuring can
be illustrated as follows:
[ORGANIZATION CHART APPEARS HERE]
6
<PAGE>
[AFTER THE RESTRUCTURING CHART]
7
<PAGE>
THE TRUST
Everest Holdings created the trust as a statutory Delaware business trust
pursuant to a trust agreement. Everest Holdings will enter into an amended and
restated trust agreement for the trust, which will state the terms and
conditions for the trust to issue and sell its preferred securities and common
securities.
The trust exists solely to:
. issue and sell to the public preferred securities, representing undivided
beneficial interests in the assets of the trust;
. issue and sell to Everest Holdings common securities, representing
undivided beneficial interests in the assets of the trust;
. use the proceeds from the sale of its preferred and common securities to
purchase a series of our junior subordinated notes;
. distribute the cash payments it receives from the junior subordinated
notes it owns to the holders of the preferred and common securities; and
. engage in other activities that are necessary or incidental to these
purposes.
Everest Holdings will purchase all of the common securities of the trust.
The common securities will represent an aggregate liquidation amount equal to
at least 3% of the trust's total capitalization. The preferred securities will
represent the remaining approximately 97% of the trust's total capitalization.
The common securities will have terms substantially identical to, and will rank
equal in priority of payment with, the preferred securities. Payment will be
made on both the common securities and the preferred securities when payments
of interest are made on the junior subordinated notes, upon redemption of the
junior subordinated notes or in some circumstances upon liquidation of the
trust. However, if we default on the payments on the related junior
subordinated notes, then cash distributions and redemption, liquidation and
other amounts payable on the common securities will be subordinate in priority
of payment to the amounts payable on the preferred securities.
The preferred securities will be guaranteed by Everest Holdings as described
later in this prospectus.
We have appointed five trustees to conduct the trust's business and affairs:
. The Chase Manhattan Bank, which will act as the property trustee;
. Chase Manhattan Bank Delaware, which will act as the Delaware trustee;
and
. Three Everest Holdings officers, who will act as the regular trustees.
We will pay all fees and expenses related to the trust and the offering of
the preferred securities and will pay all ongoing costs and expenses of the
trust, except the trust's obligations under the preferred and common
securities.
The trust will not have separate financial statements. The statements would
not be material to holders of the preferred securities because the trust will
not have any independent operations and exists solely for the reasons
summarized above.
The principal offices of the trust will be located at 477 Martinsville Road,
P.O. Box 830, Liberty Corner, New Jersey 09738-0830, and the telephone number
of the trust will be (908) 604-3000.
8
<PAGE>
USE OF PROCEEDS
We may sell all or a portion of the $450 million of securities described in
this prospectus. Unless stated otherwise in the applicable prospectus
supplement, the net proceeds from the sale of the securities offered by the
trust will be used by the trust to purchase a series of our junior
subordinated notes.
Unless stated otherwise in the applicable prospectus supplement, if
securities are issued under this prospectus prior to the restructuring or if
the restructuring is not completed, Everest Holdings will use the net proceeds
to repurchase shares of Everest Holdings over time and for acquisitions
consistent with our business strategy, the payment of shareholder dividends
and general corporate purposes.
Unless stated otherwise in the applicable prospectus supplement, if the
restructuring is completed, substantially all of the remaining net proceeds
will be distributed by us to Everest Group and Everest Group will use the net
proceeds for the following purposes:
. approximately $250 million will be used to capitalize Everest Bermuda;
. any remaining proceeds may be used to repurchase shares of Everest Group
over time and for acquisitions consistent with our business strategy,
additional capitalization of Everest Bermuda, the payment of shareholder
dividends and general corporate purposes.
We do not anticipate needing to raise additional proceeds for the
capitalization of Everest Bermuda or the repurchase of shares.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of our earnings to fixed charges
for each of the periods indicated:
<TABLE>
<CAPTION>
Period Ended Year Ended December 31,
September 30, --------------------------
1999 1998 1997 1996 1995 1994
------------- ----- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges..... 89.6 121.2 127.9 82.0 (1) (1)
</TABLE>
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(1) Principally as a result of non-recurring charges, Everest Holdings had a
deficiency of earnings in 1995 and 1994 of $26,568,000 and $11,982,000,
respectively, to cover fixed charges.
ACCOUNTING TREATMENT
The trust will be treated as a subsidiary of Everest Holdings for financial
reporting purposes. Accordingly, the trust's financial statements will be
included in the consolidated financial statements of Everest Holdings. The
preferred securities will be presented as a separate line item in the
consolidated statements of financial condition of Everest Holdings under the
caption "Company Obligated Mandatorily Redeemable Preferred Securities of
Subsidiary Trust Holding Solely Junior Subordinated Notes of the Company" and
appropriate disclosures about the preferred securities will be included in the
notes to the consolidated financial statements. For financial reporting
purposes, Everest Holdings will record distributions payable on the preferred
securities as a component of interest expense in the consolidated statements
of operations of Everest Holdings.
In its future financial reports, Everest Holdings will: (1) present the
preferred securities on its consolidated statements of financial condition as
a separate line item entitled "Company Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary Trust Holding Solely Junior Subordinated
Notes of the Company" and (2) include in a footnote to the financial
statements disclosure that the sole assets of the trust are the junior
subordinated notes specifying the principal amount, interest rate and maturity
date of the junior subordinated notes held.
9
<PAGE>
DESCRIPTION OF THE SENIOR NOTES
The senior notes will be issued pursuant to a senior indenture, dated as of
, 1999, as supplemented from time to time, between us and The Chase
Manhattan Bank, as the senior indenture trustee. We have filed the base senior
indenture as an exhibit to the registration statement of which this prospectus
is a part. You also may request a copy of the senior indenture from the senior
indenture trustee at its corporate trust office in Edison, New Jersey. The
senior indenture will be qualified under the Trust Indenture Act of 1939. The
terms of each series of senior notes will include those stated in the senior
indenture for that series and those made part of the senior indenture by
reference to the Trust Indenture Act. This section summarizes all of the
material provisions of the senior notes and the senior indenture. You should
refer to these documents for more detailed information.
We may issue series of senior notes from time to time by entering into
supplemental indentures with the senior indenture trustee or pursuant to
resolutions of our board of directors or a duly authorized committee of our
board. Any supplemental indenture or resolutions of either our board of
directors or a duly authorized committee of the board will be executed at the
time we issue any senior notes and will be filed with the SEC on Form 8-K or by
a post-effective amendment to the registration statement of which this
prospectus is a part.
General
The base senior indenture does not limit the aggregate principal amount of
senior notes that we may issue. The senior notes of a series need not be issued
at the same time, bear interest at the same rate or mature on the same date.
We conduct our business through subsidiaries. Accordingly, our ability to
meet our obligations under the senior notes will be dependent on the earnings
and cash flows of our subsidiaries and the ability of our subsidiaries to pay
dividends or to advance or repay funds to us.
We will issue senior notes under the senior indenture as one or more series
of unsecured senior debt securities. The senior notes are unsecured and
subordinated in right of payment to all of our existing and future secured
indebtedness and will rank equal in priority with all of our other unsecured
and unsubordinated indebtedness. As of September 30, 1999, we had no secured
indebtedness outstanding and approximately $35 million of senior indebtedness
outstanding, which ranks equal in priority with the senior notes. The senior
notes also will be effectively subordinated to any indebtedness and other
liabilities of our subsidiaries. As of September 30, 1999, our subsidiaries had
approximately $ 4.4 billion of indebtedness and other liabilities, including
insurance reserves. We anticipate that from time to time we will incur
additional indebtedness. We will disclose any material changes in these amounts
that may occur in any applicable prospectus supplement.
The prospectus supplement and the supplemental indenture for a particular
series of senior notes will set forth the following terms of that series:
. the title of the series;
. any limit on the aggregate principal amount of the senior notes of the
series;
. the date or dates on which the principal of any of the senior notes of
the series will be payable or the method for determining the date or
dates;
. whether we may shorten or extend the date on which the principal of any
senior notes of the series is payable and, if so, the terms and
conditions of any extension;
. the rate or rates at which any of the senior notes of the series will
bear interest, if any, or the method for determining the rate or rates,
and the date or dates from which any interest will accrue;
. the interest payment dates on which any interest will be payable and the
regular record date, if any, for any interest payable on any interest
payment date;
. whether we may extend the interest payment periods and, if so, the terms
of any extension;
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. the place or places where principal and any premium and interest on any
of the senior notes of the series will be payable, if other than the
principal corporate trust office of the senior indenture trustee;
. our obligation, if any, to redeem or purchase the senior notes of the
series pursuant to any sinking fund, amortization or analogous provision
and the terms and conditions on which any of the senior notes may be
redeemed or purchased pursuant to any obligation;
. the terms and conditions, if any, on which the senior notes of the series
may be redeemed at our option or at the option of the holder;
. any index or formula for determining the amount of principal or any
premium or interest on any of the senior notes of the series and the
manner of determining those amounts;
. the currency, currencies or currency units in which principal and any
premium and interest on any of the senior notes of the series will be
payable, if other than U.S. dollars, and the manner of determining the
equivalent of those amounts in U.S. dollars for any purpose;
. if the principal of or any premium or interest on the senior notes of the
series is payable, at our option or the option of the holder of the
senior notes, in one or more currencies or currency units other than
those in which the senior notes are stated to be payable, the currency,
currencies or currency units in which the principal and any premium and
interest on the senior notes may be payable and the terms and conditions
of the option;
. the portion of the principal amount of any of the senior notes of the
series that will be payable upon declaration of acceleration of maturity,
if other than the entire principal amount;
. whether any of the terms of the senior indenture described below under
"--Defeasance and Covenant Defeasance" will apply to any of the senior
notes of the series;
. whether any of the senior notes of the series will be issuable as global
securities and, if so, the depositary and any provisions for the transfer
or exchange of any such global securities, if different from those
described below under "--Global Securities";
. any addition to, deletion from or change in events of default or
covenants with respect to any of the senior notes of the series and any
change in the right of the senior indenture trustee or the holders of the
senior notes to accelerate the maturity of the senior notes;
. if the principal amount payable on the maturity date of any of the senior
notes of the series will not be determinable on any one or more dates
prior to the maturity date, the amount which will be deemed to be the
principal amount as of any date for any purpose, including the principal
amount which will be due and payable upon any maturity other than the
maturity date, or the manner of determining that amount; and
. any other terms of the senior notes of the series.
Unless the applicable prospectus supplement states otherwise, we will issue
the senior notes only in fully registered form, without coupons, and there will
be no service charge for any registration of transfer or exchange of the senior
notes. We may, however, require payment to cover any tax or other governmental
charge payable in connection with the registration of transfer or exchange.
We may offer and sell the senior notes at a substantial discount below their
principal amount and the senior indenture does not provide any limit on the
amount by which we may discount the senior notes. The applicable prospectus
supplement will describe the special United States federal income tax and other
considerations, if any, applicable to the discounted senior notes. In addition,
the applicable prospectus supplement may describe certain special United States
federal income tax or other considerations, if any, applicable to any senior
notes that are denominated in a currency or currency unit other than U.S.
dollars.
The senior notes are unsecured and subordinated in right of payment to all
of our existing and future secured indebtedness. As a result, in the event of
our bankruptcy, liquidation or reorganization or upon
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acceleration of the senior notes due to an event of default, our assets will be
available to pay our obligations on the senior notes only after all secured
indebtedness has been paid in full in cash or other payment satisfactory to the
holders of the secured indebtedness has been made. There may not be sufficient
assets remaining to pay amounts due on any or all of the senior notes then
outstanding. The senior notes are also effectively subordinated to the
indebtedness and other liabilities of our subsidiaries. The senior indenture
does not prohibit or limit the incurrence of secured or senior indebtedness or
the incurrence of other indebtedness and liabilities by us or our subsidiaries.
The incurrence of additional senior indebtedness and other liabilities by us or
our subsidiaries could adversely affect our ability to pay the obligations on
the senior notes.
Global Securities
Some or all of the senior notes of a series may be represented in whole or
in part by one or more global securities deposited with or on behalf of one or
more depositaries.
The applicable prospectus supplement will describe the terms of any
depositary arrangement. We anticipate that the following provisions will apply
to all depositary arrangements for any senior notes represented by global
securities.
Unless the applicable prospectus supplement states otherwise, senior notes
represented by a global security deposited with or on behalf of a depositary
will be registered in the name of that depositary or its nominee. Upon the
issuance of a global security in registered form, the depositary for the global
security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the senior notes represented by the global
security to the accounts of institutions that have accounts with the depositary
or its nominee. These institutions are generally brokers, dealers, banks and
other financial institutions and are often referred to as participants. The
accounts to be credited will be designated by the underwriters or agents of the
senior notes or by Everest Holdings, if the senior notes are offered and sold
directly by Everest Holdings. Ownership of beneficial interests in the global
securities will be limited to participants or persons that may hold interests
through participants. Any person who holds a brokerage account with a
participant may purchase the senior notes through the participant. Ownership of
beneficial interests by participants in the global securities will be shown on,
and the transfer of any ownership interest will be effected only through,
records maintained by the depositary or its nominee for the global security.
Ownership of beneficial interests in global securities by persons that hold
through participants will be effected only through records maintained by the
applicable participant. Some insurance companies and other institutions are
required by law to hold their investment securities in definitive form, so an
investor may not be able to sell its senior notes to those insurance companies
or other institutions.
So long as the depositary for a global security or its nominee is the
registered owner of the global security, the depositary or the nominee, as the
case may be, will be considered the sole owner or holder of the senior notes
represented by the global security for all purposes under the senior indenture.
Except as set forth below, owners of beneficial interests in the global
security will not be entitled to have the senior notes represented by the
global security registered in their names, will not receive or be entitled to
receive physical delivery of the senior notes in definitive form and will not
be considered the owners or holders of the senior notes under the senior
indenture.
Payment of principal of and any premium and interest on senior notes
registered in the name of or held by a depositary or its nominee will be made
in immediately available funds to the depositary or its nominee, as the case
may be, as the registered owner or the holder of the global security
representing the senior notes. None of Everest Holdings, the senior indenture
trustee, any paying agent or the registrar and transfer agent for the senior
notes will have any responsibility or liability for any aspect of the records
relating to, or payments made on account of, beneficial ownership interests in
a global security for the senior notes or for maintaining, supervising or
reviewing any records relating to the beneficial ownership interests.
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We expect that a depositary for senior notes of a series, upon receipt of
any payment of principal or any premium or interest in respect of a global
security, will immediately credit participants' accounts with payment in
amounts proportionate to their respective beneficial interests in the principal
amount of the global security as shown on the records of the depositary. We
also expect that payments by participants to owners of beneficial interests in
the global security held through the participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in "street name", and will be the
responsibility of each participant.
So long as the depositary for a global security or its nominee is the
registered owner of the global security, the depositary or its nominee, as the
case may be, will be entitled to direct the actions of the senior indenture
trustee upon an event of default. However, we expect that a depositary for the
senior notes of a series, upon receiving notice of an event of default, will
immediately solicit the participants regarding any action to be taken. We also
expect that the participants will act in accordance with standing instructions
and customary practices, as is now the case with securities held for the
accounts of customers registered in "street name", and will, in turn, solicit
the owners of the beneficial interests regarding any action to be taken upon
any event of default.
A global security may not be transferred in whole or in part except by the
depositary for the global security to a nominee of the depositary or by a
nominee of the depositary to the depositary or another nominee of the
depositary or by the depositary or any nominee to a successor depositary or a
nominee of the successor depositary. If a depositary for the senior notes of a
series is at any time unwilling or unable to continue as depositary and a
successor depositary is not appointed by us within 90 days or if at any time
the depositary ceases to be a clearing agency registered under the Exchange Act
when the depositary is required to be registered to act as the depositary and
no successor is appointed by us within 90 days or if an event of default has
occurred and is continuing, then we will issue the senior notes in definitive
registered form in exchange for the global security or global securities
representing the senior notes. In addition, we may at any time determine not to
have any senior notes represented by one or more global securities and, in that
event, will issue senior notes in definitive registered form in exchange for
the global securities representing the senior notes. In any of these instances,
an owner of a beneficial interest in a global security will be entitled to
physical delivery in definitive form of the senior notes represented by the
global security equal in principal amount to its beneficial interest and to
have the senior notes registered in its name.
Events of Default
The following will be events of default under the senior indenture with
respect to the senior notes of any series unless the particular event of
default is not applicable to the particular series or unless the particular
event of default is modified or deleted in a supplemental indenture as stated
in the applicable prospectus supplement:
. we fail to pay principal of or any premium on any senior note of that
series on its due date;
. we fail to pay any interest on any senior note of that series within 30
days from its due date; provided, however, that the date on which the
payment is due will be the date on which we are required to make payment
following any deferral of interest payments by us under the terms of the
senior notes;
. we fail to make any sinking fund payment on its due date;
. we fail to perform any of our covenants in the senior indenture,
excluding a covenant not applicable to the affected series, for 60 days
after the senior indenture trustee or the holders of at least 33% in
principal amount of the outstanding senior notes of that series give us
written notice of the default and require that we remedy the breach.
However, the 60-day period may be extended by either the senior indenture
trustee or the senior indenture trustee and the holders of at least the
same principal amount of the outstanding senior notes of that series that
had given notice of the default, and the senior indenture trustee, or the
senior indenture trustee and such holders, as the case may be, will be
deemed to have agreed to an extension if we have initiated and are
diligently pursuing corrective action;
. we default under any (1) debt for any money borrowed, including any other
series of debt securities, (2) mortgage, indenture or other instrument
under which there may be issued or may be secured or
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evidenced any indebtedness for money borrowed or (3) guarantee of payment
for money borrowed, and any default shall result in the indebtedness
becoming due prior to its stated maturity; provided, however, a default
shall exist under this clause only if the aggregate principal amount
outstanding under all of the indebtedness that has become due prior to its
stated maturity exceeds $25,000,000 and the indebtedness has not been
discharged or the acceleration of the indebtedness has not been rescinded
or annulled within 10 days after the senior indenture trustee or the
holders of at least 33% in principal amount of the senior notes give us
written notice of the default and require that we remedy the breach;
. we file for bankruptcy or other events of bankruptcy, insolvency or
reorganization occur; or
. any other event of default specified in the applicable prospectus
supplement occurs.
If an event of default with respect to the senior notes of a series occurs
and is continuing, then the senior indenture trustee or the holders of not
less than 33% in principal amount of the outstanding senior notes of that
series may, by notice to us, and to the senior indenture trustee if given by
the holders, declare to be immediately due and payable all unpaid principal
and accrued interest on all senior notes of that series. At any time after a
declaration of acceleration has been made with respect to the senior notes of
a series and before a judgment or decree for payment of the money due has been
obtained, the holders of a majority in principal amount of the outstanding
senior notes may rescind any declaration of acceleration with respect to the
senior notes and its consequences if:
. we deposit with the senior indenture trustee funds sufficient to pay all
overdue principal of and premium and interest on the senior notes and
other amounts due to the senior note trustee and, to the extent that
payment of the interest is lawful, interest on the overdue interest; and
. all existing events of default with respect to the senior notes have been
cured or waived except non-payment of principal or interest on the senior
notes that has become due solely because of the acceleration.
The holders of a majority in principal amount of the outstanding senior
notes of any series have the right to direct the time, method and place of
conducting any proceedings for any remedy available to the senior indenture
trustee or to direct the exercise of any trust or power conferred on the
senior indenture trustee with respect to the senior notes of that series.
No holder of a senior note of any series will have any right to institute a
proceeding with respect to the senior indenture for the appointment of a
receiver or for any remedy under the senior indenture unless:
. that holder has previously given the senior indenture trustee written
notice that an event of default with respect to the senior notes of that
series has occurred and is continuing;
. the holders of a majority in principal amount of the outstanding senior
notes of that series have made written request to institute the
proceeding;
. the holder or holders have offered reasonable indemnity to the senior
indenture trustee;
. the senior indenture trustee has failed to institute the proceeding for
60 days after receipt of the notice and offer of indemnity; and
. the senior indenture trustee has not received from the holders of a
majority in principal amount of the outstanding senior notes of that
series a direction inconsistent with the written request.
Notwithstanding the foregoing, the holder of any senior note will have an
absolute and unconditional right to receive payment of the principal of and
any premium and interest on that senior note on its maturity date, or, in the
case of redemption, the date of redemption, and to institute suit for the
enforcement of any payment.
Notice of Default
If any event which is, or after notice or lapse of time or both would
become, an event of default occurs with respect to the senior notes of any
series and it is known to the senior indenture trustee, the senior indenture
trustee shall mail to the holders of the senior notes of that series a notice
of default within 90 days
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after it occurs unless the default shall have been cured or waived; provided,
however, that except in the case of a default in the payment of the principal
of or any premium or interest on any senior note of any series or in the making
of any sinking fund payment payable with respect to the senior notes of any
series, the senior indenture trustee may withhold the 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 senior indenture trustee
determines in good faith that withholding the notice is in the interest of the
holders of the senior notes of that series; and provided, further, that in the
case of any default for failure by Everest Holdings to comply with or perform
any of its agreements, covenants or warranties in the senior notes and under
the senior indenture with respect to the senior notes of any series, no notice
to the holders of the senior notes shall be given until at least 30 days after
the occurrence thereof.
We are required to furnish annually to the senior indenture trustee an
officers' certificate to the effect that, to the best knowledge of the officers
providing the certificate, we are not in default under the senior indenture or,
if there has been a default, specifying the default and its status.
Consolidation, Merger, Conveyance or Transfer
The senior indenture provides that we may consolidate or merge with or into
another entity, or convey, transfer or lease our properties and assets
substantially as an entirety to any entity or permit an entity to convey,
transfer or lease its properties and assets substantially as an entirety to us;
provided, however, that:
. the successor, if any, is a corporation, partnership or trust organized
and existing under the laws of the United States of America, any State of
the United States, the District of Columbia, Bermuda or the Cayman
Islands and expressly assumes by supplemental indenture all of our
obligations under the senior indenture and the senior notes;
. immediately after giving effect to the transaction, no event or default,
or event which after notice or lapse of time or both would become an
event of default, will have occurred and be continuing; and
. we deliver an officers' certificate and an opinion of counsel to the
senior indenture trustee, each stating that the transaction complies with
the senior indenture and all conditions precedent in the senior indenture
relating to the consolidation, merger, conveyance or transfer have been
complied with.
Upon the assumption by the successor of our obligations under the senior
indenture and the senior notes, the successor will succeed to and be
substituted for Everest Holdings under the senior indenture, and we will be
relieved of all of our obligations under the senior indenture and the senior
notes.
Registration and Transfer
If the senior notes of a series are to be redeemed, we will not be required
to:
. issue, register the transfer of or exchange any senior notes of that
series during the 15 days immediately preceding the date notice is mailed
identifying the senior notes that are called for redemption; or
. register the transfer of or exchange any senior note selected for
redemption, in whole or in part, except for the unredeemed portion of a
senior note being redeemed in part.
Denominations
The senior notes will be issuable in denominations of $1,000 and any
integral multiples of $1,000, without coupons, unless the applicable prospectus
supplement states otherwise.
Payment and Paying Agent
Principal of the senior notes will be paid only against surrender of the
senior notes as specified in the senior indenture. Unless the applicable
prospectus supplement states otherwise, interest on the senior notes will be
payable, at our option, (1) by wire transfer to an account at a banking
institution in the United States that the
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person entitled to the interest designates in writing to the senior indenture
trustee at least 16 days prior to the date of payment or (2) by check mailed to
the address of the person entitled to the interest as the address appears in
the security register for the senior notes.
Unless the applicable prospectus supplement states otherwise, the senior
indenture trustee will act as paying agent for the senior notes, and the
principal corporate trust office of the senior indenture trustee will serve as
the office through which the paying agent acts. We may designate additional
paying agents, rescind the designation of any paying agents or approve a change
in the office through which any paying agent acts.
All moneys that we have paid to a paying agent for payment of principal of
or interest on the senior notes that remain unclaimed at the end of two years
after the principal or interest has become due and payable will be repaid to us
at our request. Holders will thereafter look only to us for any payments.
Modification of the Senior Indenture
Everest Holdings and the senior indenture trustee may amend or modify the
senior indenture with the consent of the holders of a majority in aggregate
principal amount of the outstanding senior notes of any series of the senior
notes affected by the amendment or modification. No amendment or modification
may, however, without the consent of the holder of each outstanding senior note
affected by the amendment or modification:
. change the stated maturity of the principal of, or any installment of
principal of or interest on, any senior note;
. reduce the principal amount of, the rate of interest on or any premium
payable upon the redemption of any senior note;
. reduce the amount of principal of any senior note due and payable upon
acceleration of the maturity of the senior note;
. change the place of payment or currency of payment of principal of or any
premium or interest on any senior note;
. impair the right to institute suit for the enforcement of any payment on
any senior note on or after the stated maturity or date of redemption; or
. reduce the percentage in principal amount of the senior notes of any
series, the consent of whose holders is required to amend or modify the
senior indenture, to waive compliance with specific provisions of the
senior indenture or to waive specific defaults.
In addition, Everest Holdings and the senior indenture trustee may, without
the consent of any of the holders of the senior notes, execute supplemental
indentures to:
. create new series of senior notes;
. cure any ambiguity, defect or inconsistency in the senior indenture; and
. make other changes that do not adversely affect the interests of the
holders of the senior notes in any material respect;
as well as for various other purposes.
Waiver of Covenants and Defaults
The holders of a majority in aggregate principal amount of the outstanding
senior notes of any series may waive, for that series, our compliance with any
restrictive covenants described in any prospectus supplement or included in any
supplemental indenture. The holders of a majority in aggregate principal amount
of the outstanding senior notes of any series with respect to which a default
has occurred and is continuing may waive that default for that series, other
than a default in the payment of principal of, or any premium or interest on,
any senior note of that series or a default with respect to a covenant or
provision that cannot be amended or modified without the consent of the holder
of each outstanding senior note affected.
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Defeasance and Covenant Defeasance
The senior indenture provides, unless the terms of the particular series of
senior notes provides otherwise, that we may cause ourselves to be:
. discharged from our obligations with respect to any senior notes or
series of senior notes, which we refer to as "defeasance"; and
. released from our obligations under any restrictive covenants described
in any prospectus supplement or included in any supplemental indenture
with respect to any senior notes or series of senior notes, which we
refer to as "covenant defeasance".
In connection with any defeasance or covenant defeasance, we must
irrevocably deposit with the senior indenture trustee, in trust, money and/or
government obligations which, through the scheduled payment of principal and
interest on those obligations, would provide sufficient moneys to pay the
principal of and any premium and interest on the senior notes on the maturity
dates or upon redemption.
The senior indenture permits defeasance with respect to any senior notes of
a series even if a prior covenant defeasance has occurred with respect to the
senior notes of that series. Following a defeasance, payment of the senior
notes defeased may not be accelerated because of an event of default. Following
a covenant defeasance, payment of the senior notes may not be accelerated by
reference to the covenants affected by the covenant defeasance. However, if an
acceleration were to occur, the realizable value at the acceleration date of
the money and government obligations in the defeasance trust could be less than
the principal and interest then due on the senior notes, since the required
deposit in the defeasance trust would be based upon scheduled cash flows rather
than market value, which would vary depending upon interest rates and other
factors.
Upon a defeasance, the following rights and obligations will continue: (1)
the rights of the holders of the senior notes of any series to receive from the
trust established in connection with the defeasance payments of the principal
of and any premium and interest on the senior notes when payments are due, (2)
our obligations regarding the registration, transfer and exchange of the senior
notes of any series, (3) our obligation to maintain an office or agency in each
place of payment and (4) the survival of the senior indenture trustee's rights,
powers, trusts, duties and immunities under the senior indenture.
As a condition to defeasance or covenant defeasance, we must deliver to the
senior indenture trustee an opinion of counsel to the effect that the holders
of the senior notes will not recognize income, gain or loss for United States
federal income tax purposes as a result of such defeasance or covenant
defeasance 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 defeasance or covenant defeasance had not occurred. This opinion, in
the case of a defeasance, must refer to and be based upon a ruling of the
Internal Revenue Service or a change in applicable federal income tax law
occurring after the date of the senior indenture.
In addition, we must satisfy the following conditions:
. our delivery to the senior indenture trustee of an officers' certificate
confirming that any senior notes then listed on any securities exchange
will not be delisted;
. no event which is, or after notice or time lapse or both would become, an
event of default has occurred and is continuing;
. any defeasance or covenant defeasance does not cause the senior indenture
trustee to have a conflicting interest under the Trust Indenture Act;
. any defeasance or covenant defeasance does not cause the trust to become
an investment company under the Investment Company Act unless it is
properly registered under that Act or exempt from registration;
. proper notice of the redemption date, if applicable, has been given; and
. our delivery to the senior indenture trustee of an officers' certificate
and an opinion of counsel, each stating that all conditions precedent
have been complied with.
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Information Concerning the Senior Indenture Trustee
In case an event of default shall occur and be continuing, the senior
indenture trustee shall exercise its rights and powers under the senior
indenture in the same manner and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the same circumstances
in the conduct of his or her own affairs. Before proceeding to exercise any
right or power under the senior indenture at the direction of the holders, the
senior indenture trustee will be entitled to receive from the holders
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in complying with any direction of the holders.
The Chase Manhattan Bank, which is the senior indenture trustee, also serves
as the subordinated note trustee under the subordinated indenture described
below and as property trustee and guarantee trustee with respect to the
preferred securities issued by the trust. Everest Holdings and certain of its
affiliates maintain banking relationships with The Chase Manhattan Bank.
Governing Law
The senior indenture and the senior notes will be governed by the laws of
the State of New York, without regard to the conflict of law provisions
thereof.
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DESCRIPTION OF THE JUNIOR SUBORDINATED NOTES
The junior subordinated notes will be issued pursuant to a subordinated
indenture, dated as of , 1999, as supplemented from time to time,
between us and The Chase Manhattan Bank, as the subordinated indenture trustee.
We have filed the base subordinated indenture as an exhibit to the registration
statement of which this prospectus is a part. You also may request a copy of
the subordinated indenture from the subordinated indenture trustee at its
corporate trust office in Edison, New Jersey. The subordinated indenture will
be qualified under the Trust Indenture Act of 1939. The terms of each series of
junior subordinated notes will include those stated in the subordinated
indenture and those made part of the subordinated indenture by reference to the
Trust Indenture Act. This section summarizes all of the material provisions of
the junior subordinated notes and the subordinated indenture. You should refer
to these documents for more detailed information.
We may issue series of junior subordinated notes from time to time by
entering into supplemental indentures with the subordinated indenture trustee
or pursuant to resolutions of our board of directors or a duly authorized
committee of our board. Any supplemental indenture or resolutions of either our
board of directors or a duly authorized committee of our board will be executed
at the time we issue any junior subordinated notes and will be filed with the
SEC on Form 8-K or by a post-effective amendment to the registration statement
of which this prospectus is a part.
General
The base subordinated indenture does not limit the aggregate principal
amount of junior subordinated notes that we may issue. The junior subordinated
notes of a series need not be issued at the same time, bear interest at the
same rate or mature on the same date.
We conduct our business through subsidiaries. Accordingly, our ability to
meet our obligations under the junior subordinated notes will be dependent on
the earnings and cash flows of our subsidiaries and the ability of our
subsidiaries to pay dividends or to advance or repay funds to us.
We will issue the junior subordinated notes under the subordinated indenture
as one or more series of unsecured junior debt securities. The junior
subordinated notes are unsecured and subordinated in right of payment to all of
our existing and future senior indebtedness and will rank equal in priority
with all of our other unsecured and subordinated indebtedness. As of September
30, 1999, we had no secured indebtedness outstanding and approximately $35
million of senior indebtedness outstanding, which would be senior to the junior
subordinated notes. The junior subordinated notes also will be effectively
subordinated to any indebtedness and other liabilities of our subsidiaries. As
of September 30, 1999, our subsidiaries had approximately $4.4 billion of
indebtedness and other liabilities, including insurance reserves. We anticipate
that from time to time we will incur additional indebtedness, including
indebtedness senior to the junior subordinated notes. We will disclose any
material changes in these amounts that may occur in any applicable prospectus
supplement.
The prospectus supplement and the supplemental indenture for a particular
series of junior subordinated notes will set forth the following terms of that
series:
. the title of the series;
. any limit on the aggregate principal amount of the junior subordinated
notes of the series;
. the date or dates on which the principal of the junior subordinated notes
of the series will be payable or the method for determining the date or
dates;
. whether we may shorten or extend the date on which the principal of any
junior subordinated notes of the series is payable and, if so, the terms
and conditions of any extension;
. the rate or rates at which the junior subordinated notes of the series
will bear interest, if any, or the method for determining the rate or
rates, and the date or dates from which any interest will accrue;
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. the interest payment dates on which any interest will be payable and the
regular record date, if any, for any interest payable on any interest
payment date;
. whether we may extend the interest payment periods and, if so, the terms
of any extension;
. the place or places where principal and any premium and interest on the
junior subordinated notes of the series will be payable, if other than
the principal corporate trust office of the subordinated indenture
trustee;
. our obligation, if any, to redeem or purchase the junior subordinated
notes of the series pursuant to any sinking fund, amortization or
analogous provision and the terms and conditions on which the junior
subordinated notes may be redeemed or purchased pursuant to any
obligation;
. the terms and conditions, if any, on which the junior subordinated notes
of the series may be redeemed at our option or at the option of the
holder;
. any index or formula for determining the amount of principal or any
premium or interest on the junior subordinated notes of the series and
the manner of determining those amounts;
. the currency, currencies or currency units in which principal and any
premium and interest on the junior subordinated notes of the series will
be payable, if other than U.S. dollars, and the manner of determining the
equivalent of those amounts in U.S. dollars for any purpose;
. if the principal of or any premium or interest on the junior subordinated
notes of the series is payable, at our option or the option of the holder
of the junior subordinated notes, in one or more currencies or currency
units other than those in which the junior subordinated notes are stated
to be payable, the currency, currencies or currency units in which the
principal and any premium and interest on the junior subordinated notes
may be payable and the terms and conditions of the option;
. the portion of the principal amount of the junior subordinated notes of
the series that will be payable upon declaration of acceleration of
maturity, if other than the entire principal amount;
. whether any of the terms of the subordinated indenture described below
under "--Defeasance and Covenant Defeasance" will not apply to the junior
subordinated notes of the series;
. whether any of the junior subordinated notes of the series will be
issuable as global securities and, if so, the depositary and any
provisions for the transfer or exchange of the global securities, if
different from those described below under "--Global Securities";
. any addition to, deletion from or change in events of default or
covenants with respect to the junior subordinated notes of the series and
any change in the right of the subordinated indenture trustee or the
holders of the junior subordinated notes to accelerate the maturity of
the junior subordinated notes;
. if the principal amount payable on the maturity date of the junior
subordinated notes of the series will not be determinable on any one or
more dates prior to the maturity date, the amount which will be deemed to
be the principal amount as of any date for any purpose, including the
principal amount which will be due and payable upon any maturity other
than the maturity date, or the manner of determining that amount; and
. any other terms of the junior subordinated notes of the series.
Unless the applicable prospectus supplement states otherwise, the junior
subordinated notes will be issued only in fully registered form, without
coupons, and there will be no service charge for any registration of transfer
or exchange of the junior subordinated notes. We may, however, require payment
to cover any tax or other governmental charge payable in connection with the
registration of transfer or exchange.
The interest rate and interest and other payment dates of each series of
junior subordinated notes issued to the trust will correspond to those of the
preferred securities of the trust.
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Subordination
The junior subordinated notes are unsecured and subordinated in right of
payment to all of our existing and future secured and senior indebtedness. As a
result, in the event of our bankruptcy, liquidation or reorganization or upon
acceleration of the junior subordinated notes due to an event of default, our
assets will be available to pay our obligations on the junior subordinated
notes only after all secured and senior indebtedness has been paid in full in
cash or other payment satisfactory to the holders of the secured and senior
indebtedness has been made. There may not be sufficient assets remaining to pay
amounts due on any or all of the junior subordinated notes then outstanding.
The junior subordinated notes are also effectively subordinated to the
indebtedness and other liabilities of our subsidiaries. The subordinated
indenture does not prohibit or limit the incurrence of secured or senior
indebtedness or the incurrence of other indebtedness and liabilities by us or
our subsidiaries. The incurrence of additional secured and senior indebtedness
and other liabilities by us or our subsidiaries could adversely affect our
ability to pay the obligations on the junior subordinated notes.
The term "senior indebtedness" is defined in the subordinated indenture to
mean, with respect to any series of junior subordinated notes, the principal
of, and any premium and interest on and any other payment in respect of,
indebtedness due pursuant to any of the following, whether outstanding at the
date of execution of the subordinated indenture or incurred after the date of
execution:
. all indebtedness of Everest Holdings for money borrowed or evidenced by
notes, debentures, bonds or other instruments;
. all indebtedness of others of the kinds described in the preceding clause
assumed by or guaranteed in any manner by us; and
. all renewals, extensions or refundings of indebtedness of the kinds
described in either of the preceding clauses;
unless the instrument creating or evidencing the same or pursuant to which the
same is outstanding provides that the indebtedness, renewal, extension or
refunding is not superior in right of payment to or is equal in right of
payment with or subordinated to the junior subordinated notes. Any senior
indebtedness will continue to be senior indebtedness and be entitled to the
benefits of the subordination provisions in the subordinated indenture
irrespective of any amendment, modification or waiver of any term of the senior
indebtedness.
Global Securities
Some or all of the junior subordinated notes of a series may be represented
in whole or in part by one or more global securities deposited with or on
behalf of one or more depositaries.
The applicable prospectus supplement will describe the terms of any
depositary arrangement. We anticipate that the following provisions will apply
to all depositary arrangements for any junior subordinated notes represented by
global securities.
Unless the applicable prospectus supplement states otherwise, junior
subordinated notes that are to be represented by a global security deposited
with or on behalf of a depositary will be represented by a global security
registered in the name of that depositary or its nominee. Upon the issuance of
a global security in registered form, the depositary for the global security
will credit, on its book-entry registration and transfer system, the respective
principal amount of the junior subordinated notes represented by the global
security to the accounts of institutions that have accounts with the depositary
or its nominee. These institutions are generally brokers, dealers, banks and
other financial institutions, and are referred to as participants. The accounts
to be credited will be designated by the underwriters or agents of the junior
subordinated notes or by Everest Holdings, if the junior subordinated notes are
offered and sold directly by Everest Holdings. Ownership of beneficial
interests in the global securities will be limited to participants or persons
that may hold interests through participants. Any person who holds a brokerage
account with a participant may purchase the junior subordinated notes through
the participant. Ownership of beneficial interests by participants in the
global
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securities will be shown on, and the transfer of any ownership interest will be
effected only through, records maintained by the depositary or its nominee for
the global security. Ownership of beneficial interests in global securities by
persons that hold through participants will be effected only through records
maintained by the applicable participant. Some insurance companies and other
institutions are required by law to hold their investment securities in
definitive form, so an investor may not be able to sell its junior subordinated
notes to those insurance companies or other institutions.
So long as the depositary for a global security or its nominee is the
registered owner of the global security, the depositary or nominee, as the case
may be, will be considered the sole owner or holder of the junior subordinated
notes represented by the global security for all purposes under the
subordinated indenture. Except as set forth below, owners of beneficial
interests in the global security will not be entitled to have the junior
subordinated notes represented by the global security registered in their
names, will not receive or be entitled to receive physical delivery of the
junior subordinated notes in definitive form and will not be considered the
owners or holders of the junior subordinated notes under the subordinated
indenture.
Payment of principal of and any premium and interest on junior subordinated
notes registered in the name of or held by a depositary or its nominee will be
made in immediately available funds to the depositary or its nominee, as the
case may be, as the registered owner or the holder of the global security
representing the junior subordinated notes. None of Everest Holdings, the
subordinated indenture trustee, any paying agent or the registrar and transfer
agent for the junior subordinated notes will have any responsibility or
liability for any aspect of the records relating to, or payments made on
account of, beneficial ownership interests in a global security for the junior
subordinated notes or for maintaining, supervising or reviewing any records
relating to the beneficial ownership interests.
We expect that a depositary for junior subordinated notes of a series, upon
receipt of any payment of principal or any premium or interest in respect of a
global security, will immediately credit participants' accounts with payment in
amounts proportionate to their respective beneficial interests in the principal
amount of the global security as shown on the records of the depositary. We
also expect that payments by participants to owners of beneficial interests in
the global security held through the participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in "street name", and will be the
responsibility of each participant.
So long as the depositary for a global security or its nominee is the
registered owner of the global security, the depositary or its nominee, as the
case may be, will be entitled to direct the actions of the subordinated
indenture trustee upon an event of default. However, we expect that a
depositary for the junior subordinated notes of a series, upon receiving notice
of an event of default, will immediately solicit the participants regarding any
action to be taken. We also expect that the participants will act in accordance
with standing instructions and customary practices, as is now the case with
securities held for the accounts of customers registered in "street name", and
will, in turn, solicit the owners of the beneficial interests regarding any
action to be taken upon any event of default.
A global security may not be transferred in whole or in part except by the
depositary for the global security to a nominee of the depositary or by a
nominee of the depositary to the depositary or another nominee of the
depositary or by the depositary or any nominee to a successor depositary or a
nominee of the successor depositary. If a depositary for the junior
subordinated notes of a series is at any time unwilling or unable to continue
as depositary and a successor depositary is not appointed by us within 90 days
or if at any time the depositary ceases to be a clearing agency registered
under the Exchange Act when the depositary is required to be registered to act
as the depositary and no successor is appointed by us within 90 days or an
event of default has occurred and is continuing, then we will issue the junior
subordinated notes in definitive registered form in exchange for the global
security or global securities representing the junior subordinated notes. In
addition, we may at any time determine not to have any junior subordinated
notes represented by one or more global securities and, in that event, will
issue junior subordinated notes in definitive registered form in exchange for
the global securities representing the junior subordinated notes. In any of
these instances, an owner of a
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beneficial interest in a global security will be entitled to physical delivery
in definitive form of the junior subordinated notes represented by the global
security equal in principal amount to its beneficial interest and to have the
junior subordinated notes registered in its name.
Events of Default
The following will be events of default under the junior subordinated
indenture with respect to each series of junior subordinated notes unless the
particular event of default is not applicable to the particular series of
junior subordinated notes or unless the particular event of default is deleted
or modified in a supplemental indenture as stated in the applicable prospectus
supplement:
. we fail to pay principal of or any premium on any junior subordinated
note of that series on its due date;
. we fail to pay any interest on any junior subordinated note of that
series within 30 days from its due date; provided, however, that the date
on which any payment is due will be the date on which we are required to
make payment following any deferral of interest payments by us under the
terms of the junior subordinated notes;
. we fail to perform any of our covenants in the subordinated indenture,
excluding a covenant not applicable to the affected series, for 60 days
after the subordinated indenture trustee or the holders of at least 33%
in principal amount of the outstanding junior subordinated notes of that
series give us written notice of the default and require that we remedy
the breach. However, the 60-day period may be extended by either the
subordinated indenture trustee or the subordinated indenture trustee and
the holders of at least the same principal amount of junior subordinated
notes of that series that had given notice of default, and the
subordinated indenture trustee, or the subordinated indenture trustee and
such holders, as the case may be, will be deemed to have agreed to an
extension if we have initiated and are diligently pursuing corrective
action;
. we file for bankruptcy or other events of bankruptcy, insolvency or
reorganization occur; and
. any other event of default specified in the applicable prospectus
supplement occurs.
If an event of default with respect to the junior subordinated notes of a
series occurs and is continuing, then the subordinated indenture trustee or the
holders of not less than 33% in principal amount of the outstanding junior
subordinated notes of that series may, by notice to us, and to the subordinated
indenture trustee if given by the holders, declare to be immediately due and
payable the principal amount of all junior subordinated notes of that series.
At any time after a declaration of acceleration has been made with respect to
the junior subordinated notes of a series and before a judgment or decree for
payment of the money due has been obtained, the holders of a majority in
principal amount of the outstanding junior subordinated notes may rescind any
declaration of acceleration with respect to the junior subordinated notes and
its consequences if:
. we deposit with the junior indenture trustee funds sufficient to pay all
overdue principal of and premium and interest on the senior notes and
other amounts due to the senior note trustee and, to the extent that
payment of the interest is lawful, interest on the overdue interest; and
. all existing events of default with respect to the junior subordinated
notes have been cured or waived except non-payment of principal or
interest on the junior subordinated notes that has become due solely
because of the acceleration.
The holders of a majority in principal amount of the outstanding junior
subordinated notes of any series have the right to direct the time, method and
place of conducting any proceedings for any remedy available to the
subordinated indenture trustee or to direct the exercise of any trust or power
conferred on the subordinated indenture trustee with respect to the junior
subordinated notes of that series.
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No holder of a junior subordinated note of any series will have any right to
institute a proceeding with respect to the subordinated indenture or for any
remedy under the subordinated indenture unless:
. that holder has previously given the subordinated indenture trustee
written notice that an event of default with respect to the junior
subordinated notes of that series has occurred and is continuing;
. the holders of a majority in principal amount of the outstanding junior
subordinated notes of that series have made written request to institute
the proceeding;
. the holder or holders have offered reasonable indemnity to the
subordinated indenture trustee;
. the subordinated indenture trustee has failed to institute the proceeding
for 60 days after receipt of the notice and offer of indemnity; and
. the subordinated indenture trustee has not received from the holders of a
majority in principal amount of the outstanding junior subordinated notes
of that series a direction inconsistent with the written request.
Notwithstanding the foregoing, the holder of any junior subordinated note
will have an absolute and unconditional right to receive payment of the
principal of and any premium and interest on that junior subordinated note on
its maturity date, or, in the case of redemption, the date of redemption, and
to institute suit for the enforcement of any payment.
Notice of Default
If any event which is, or after notice or lapse of time or both would
become, an event of default occurs with respect to the junior subordinated
notes of any series and it is known to the subordinated indenture trustee, the
subordinated indenture trustee shall mail to the holders of the junior
subordinated notes of that series a notice of default within 90 days after it
occurs unless the default shall have been cured or waived; provided, however,
that except in the case of a default in the payment of the principal of or any
premium or interest on any junior subordinated note of any series or in the
making of any sinking fund payment payable with respect to the junior
subordinated notes of any series, the subordinated indenture trustee may
withhold the 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
subordinated indenture trustee determines in good faith that withholding the
notice is in the interest of the holders of the junior subordinated notes of
that series; and provided, further, that in the case of any default for failure
by Everest Holdings to comply with or perform any of its agreements, covenants
or warranties in the junior subordinated notes and under the subordinated
indenture with respect to junior subordinated notes of any series, no notice to
the holders of the junior subordinated notes shall be given until at least 30
days after the occurrence thereof.
We are required to furnish annually to the subordinated indenture trustee an
officers' certificate to the effect that, to the best knowledge of the officers
providing the certificate, we are not in default under the subordinated
indenture or, if there has been a default, specifying the default and its
status.
Consolidation, Merger, Conveyance or Transfer
The subordinated indenture provides that we may consolidate or merge with or
into another entity, or convey, transfer or lease our properties and assets
substantially as an entirety to any entity or permit an entity to convey,
transfer or lease its properties and assets substantially as an entirety to us;
provided, however, that
. the successor, if any, is a corporation, partnership or trust organized
and existing under the laws of the United States of America, any State of
the United States, the District of Columbia, Bermuda or the Cayman
Islands and expressly assumes by supplemental indenture all of our
obligations under the subordinated indenture and the junior subordinated
notes;
. immediately after giving effect to the transaction, no event of default,
or event which after notice or lapse of time or both would become an
event of default, will have occurred and be continuing; and
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. we deliver an officers' certificate and an opinion of counsel to the
subordinated indenture trustee, each stating that the transaction
complies with the subordinated indenture and all conditions precedent in
the subordinated indenture relating to the consolidation, merger,
conveyance or transfer have been complied with.
Upon the assumption by the successor of our obligations under the
subordinated indenture and the junior subordinated notes, the successor will
succeed to and be substituted for Everest Holdings under the subordinated
indenture, and we will be relieved of all of our obligations under the
subordinated indenture and the junior subordinated notes.
Registration and Transfer
If the junior subordinated notes of a series are to be redeemed, we will not
be required to:
. issue, register the transfer of or exchange any junior subordinated notes
of that series during the 15 days immediately preceding the date notice
is mailed identifying the junior subordinated notes that are called for
redemption; or
. register the transfer of or exchange any junior subordinated note
selected for redemption, in whole or in part, except for the unredeemed
portion of any junior subordinated note being redeemed in part.
Denominations
The junior subordinated notes will be issuable in denominations of $1,000
and any integral multiples of $1,000, without coupons, unless the applicable
prospectus supplement states otherwise.
Payment and Paying Agent
Principal of the junior subordinated notes will be paid only against
surrender of the junior subordinated notes as specified in the subordinated
indenture. Unless the applicable prospectus supplement states otherwise,
interest on the junior subordinated notes will be payable, at our option, (1)
by wire transfer to an account at a banking institution in the United States
that the person entitled to the interest designates in writing to the
subordinated indenture trustee at least 16 days prior to the date of payment or
(2) by check mailed to the address of the person entitled to the interest as
the address appears in the security register for the junior subordinated notes.
Unless the applicable prospectus supplement states otherwise, the
subordinated indenture trustee will act as paying agent for the junior
subordinated notes, and the principal corporate trust office of the
subordinated indenture trustee will serve as the office through which the
paying agent acts. We may designate additional paying agents, rescind the
designation of any paying agents or approve a change in the office through
which any paying agent acts.
All moneys that we have paid to a paying agent for payment of principal of
or interest on the junior subordinated notes that remain unclaimed at the end
of two years after the principal or interest has become due and payable will be
repaid to us at our request. Holders will thereafter look only to us for any
payments.
Modification of the Subordinated Indenture
Everest Holdings and the subordinated indenture trustee may amend or modify
the subordinated indenture with the consent of the holders of a majority in
aggregate principal amount of the outstanding junior subordinated notes of any
series of the junior subordinated notes affected by the amendment or
modification. No amendment or modification may, however, without the consent of
the holder of each outstanding junior subordinated note affected by the
amendment or modification:
. change the stated maturity of the principal of, or any installment of
principal of or interest on, any junior subordinated note;
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. reduce the principal amount of, the rate of interest on or any premium
payable upon the redemption of any junior subordinated note;
. reduce the amount of principal of any junior subordinated note due and
payable upon acceleration of the maturity of the junior subordinated
note;
. change the place of payment or currency of payment of principal of, or
any premium or interest on, any junior subordinated note;
. impair the right to institute suit for the enforcement of any payment on
any junior subordinated note on or after the stated maturity or date of
redemption; or
. reduce the percentage in principal amount of the junior subordinated
notes of any series, the consent of whose holders is required to amend or
modify the subordinated indenture, to waive compliance with specific
provisions of the subordinated indenture or to waive specific defaults.
In addition, Everest Holdings and the subordinated indenture trustee may
execute supplemental indentures to:
. create new series of junior subordinated notes;
. cure any ambiguity, defect or inconsistency in the subordinated
indenture; and
. make other changes that do not adversely affect the interests of the
holders of the junior subordinated notes in any material respect;
as well as for various other purposes.
Waiver of Covenants and Defaults
The holders of a majority in aggregate principal amount of the outstanding
junior subordinated notes of any series may waive, for that series, our
compliance with any restrictive covenants described in any prospectus
supplement or included in any supplemental indenture. The holders of a majority
in aggregate principal amount of the outstanding junior subordinated notes of
any series with respect to which a default has occurred and is continuing, may
waive that default for that series, other than a default in the payment of
principal of, or any premium or interest on, any junior subordinated note of
that series or a default with respect to a covenant or provision under the
subordinated indenture that cannot be amended or modified without the consent
of the holder of each outstanding junior subordinated note affected.
The subordinated indenture may not be amended to alter the subordination of
any junior subordinated notes without the written consent of each holder of
senior indebtedness then outstanding that would be adversely affected by the
alteration.
Defeasance and Covenant Defeasance
The subordinated indenture provides, unless the terms of the particular
series of junior subordinated notes provides otherwise, that we may cause
ourselves to be:
. discharged from our obligations with respect to any junior subordinated
notes or series of junior subordinated notes, which we refer to as
"defeasance"; and
. released from our obligations under any restrictive covenants described
in any prospectus supplement or included in any supplemental indenture
with respect to any junior subordinated notes or series of junior
subordinated notes, which we refer to as "covenant defeasance".
In connection with any defeasance or covenant defeasance, we must
irrevocably deposit with the subordinated indenture trustee, in trust, money
and/or government obligations which, through the scheduled payment of principal
and interest on those obligations, would provide sufficient moneys to pay the
principal of and any premium and interest on the junior subordinated notes on
the maturity dates or upon redemption.
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The subordinated indenture permits defeasance with respect to any junior
subordinated notes of a series even if a prior covenant defeasance has occurred
with respect to the junior subordinated notes of that series. Following a
defeasance, payment of the junior subordinated notes defeased may not be
accelerated because of an event of default. Following a covenant defeasance,
payment of the junior subordinated notes defeased may not be accelerated by
reference to the covenants affected by the covenant defeasance. However, if an
acceleration were to occur, the realizable value at the acceleration date of
the money and government obligations in the defeasance trust could be less than
the principal and interest then due on the junior subordinated notes since the
required deposit in the defeasance trust would be based upon scheduled cash
flows rather than market value, which would vary depending upon interest rates
and other factors.
Upon a defeasance, the following rights and obligations will continue: (1)
the rights of the holders of the junior subordinated notes of any series to
receive from the trust established in connection with the defeasance payments
of the principal of and any premium and interest on the junior subordinated
notes when payments are due, (2) our obligations regarding the registration,
transfer and exchange of the junior subordinated notes of any series, (3) our
obligation to maintain an office or agency in each place of payment and (4) the
survival of the subordinated indenture trustee's rights, powers, trusts, duties
and immunities under the subordinated indenture.
As a condition to defeasance or covenant defeasance, we must deliver to the
subordinated indenture trustee an opinion of counsel to the effect that the
holders of the junior subordinated notes will not recognize income, gain or
loss for United States federal income tax purposes as a result of the
defeasance or covenant defeasance 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 the defeasance or covenant defeasance had not
occurred. This opinion, in the case of a defeasance, must refer to and be based
upon a ruling of the Internal Revenue Service or a change in applicable federal
income tax law occurring after the date of the subordinated indenture.
In addition, we must satisfy the following conditions:
. our delivery to the subordinated indenture trustee an officers'
certificate confirming that any junior subordinated notes then listed on
any securities exchange will not be delisted;
. no event which is, or after notice or time lapse or both would become, an
event of default has occurred and is continuing;
. any defeasance or covenant defeasance does not cause the subordinated
indenture trustee to have a conflicting interest under the Trust
Indenture Act;
. any defeasance or covenant defeasance does not cause the trust to become
an investment company under the Investment Company Act unless it is
properly registered under that Act or exempt from registration;
. proper notice of the redemption date, if applicable, has been given; and
. our delivery to the subordinated indenture trustee of an officers'
certificate and an opinion of counsel, each stating that all conditions
precedent have been complied with.
Information Concerning the Subordinated Indenture Trustee
In case an event of default shall occur and be continuing, the subordinated
indenture trustee shall exercise its rights and powers under the subordinated
indenture in the same manner and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the same circumstances
in the conduct of his or her own affairs. Before proceeding to exercise any
right or power under the subordinated indenture at the direction of the
holders, the subordinated indenture trustee will be entitled to receive from
the holders reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in complying with any direction of the
holders.
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The Chase Manhattan Bank, which is the subordinated indenture trustee, also
serves as the senior indenture trustee and as property trustee and guarantee
trustee with respect to the preferred securities issued by the trust. Everest
Holdings and certain of its affiliates maintain banking relationships with The
Chase Manhattan Bank.
Governing Law
The subordinated indenture and the junior subordinated notes will be
governed by the laws of the State of New York, without regard to the conflict
of laws provisions thereof.
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DESCRIPTION OF THE PREFERRED SECURITIES
The preferred securities will be issued pursuant to a trust agreement, dated
as of September 17, 1999, as amended and restated, between us and The Chase
Manhattan Bank, as the property trustee, Chase Manhattan Bank Delaware, as the
Delaware trustee, the three regular trustees and the holders from time to of
the trust's preferred and common securities. We have filed a copy of the trust
agreement and the form of the amended and restated trust agreement as an
exhibit to the registration statement of which this prospectus is a part. You
also may request a copy of the trust agreement from the property trustee at its
corporate trust office in Edison, New Jersey. The trust agreement will be
qualified under the Trust Indenture Act of 1939. The terms of the preferred
securities will include those stated in the trust agreement and those made part
of the trust agreement by reference to the Trust Indenture Act. This section
summarizes all of the material provisions of the preferred securities and the
trust agreement. You should refer to these documents for more detailed
information. The amended and restated trust agreement will be executed at the
time we issue any preferred securities and will be filed with the SEC on Form
8-K or by a post-effective amendment to the registration statement of which
this prospectus is a part.
General
The trust agreement authorizes the regular trustees to issue on behalf of
the trust one series of preferred securities that have the terms described in a
prospectus supplement. The proceeds from the sale of the trust's preferred and
common securities will be used by the trust to purchase a series of our junior
subordinated notes. The junior subordinated notes will be held in trust by the
property trustee for the benefit of the holders of the preferred and common
securities.
The terms of the preferred securities will mirror the terms of the junior
subordinated notes held by the trust. The assets of the trust available for
distribution to the holders of its preferred securities generally will be
limited to payments from us under the series of junior subordinated notes held
by the trust. If we fail to make a payment on the junior subordinated notes,
the trust will not have sufficient funds to make related payments, including
distributions, on its preferred securities.
Under the preferred securities guarantee, we will agree to make payments of
distributions and payments on redemption or liquidation with respect to the
trust's preferred securities, but only to the extent the trust has funds
available to make those payments and has not made the payments. See
"Description of the Preferred Securities Guarantee". The preferred securities
guarantee, when taken together with our obligations under the junior
subordinated notes, the subordinated indenture, the trust agreement and the
expense agreement described below, will provide a full and unconditional
guarantee by us of amounts due on the preferred securities issued by the trust.
The prospectus supplement relating to the preferred securities of the trust
will describe the specific terms of the preferred securities, including:
. the name of the preferred securities;
. the dollar amount and number of securities issued;
. the annual distribution rate, or method of determining the rate, of
distributions on the preferred securities, and date or dates from which
any distributions will accrue;
. the payment date and the record date used to determine the holders who
are to receive distributions;
. the right, if any, to defer distributions on the preferred securities
upon extension of the interest payment periods of the related junior
subordinated notes;
. our obligation, if any, to redeem or purchase the preferred securities
and the terms and conditions on which the preferred securities may be
redeemed or purchased pursuant to any obligation;
. the terms and conditions, if any, on which the preferred securities may
be redeemed at our option or at the option of the holder;
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. the terms and conditions, if any, upon which the applicable series of
junior subordinated notes may be distributed to holders of the preferred
securities;
. the voting rights, if any, of the holders of the preferred securities;
. whether the preferred securities are to be issued in book-entry form and
represented by one or more global certificates and, if so, the depository
for the global certificates and the specific terms of the depositary
arrangements; and
. any other relevant rights, preferences, privileges, limitations or
restrictions of the preferred securities.
The prospectus supplement will describe various United States federal income
tax considerations applicable to the purchase, holding and disposition of the
series of preferred securities.
Liquidation Distribution Upon Dissolution
Unless otherwise specified in an applicable prospectus supplement, the trust
agreement states that the trust will be dissolved:
. on the expiration of the term of the trust;
. upon our bankruptcy, dissolution or liquidation;
. upon our direction to the property trustee to dissolve the trust and
distribute the related junior subordinated notes directly to the holders
of the preferred and common securities of the trust;
. upon the redemption of all of the common and preferred securities of the
trust in connection with the redemption of all of the related junior
subordinated notes; or
. upon entry of a court order for the dissolution of the trust.
Unless otherwise specified in an applicable prospectus supplement, in the
event of a dissolution as described above other than in connection with
redemption, after the trust satisfies all liabilities to its creditors as
provided by applicable law, each holder of the preferred or common securities
will be entitled to receive:
. the related junior subordinated notes in an aggregate principal amount
equal to the aggregate liquidation amount of the preferred or common
securities held by the holder; or
. if any distribution of the related junior subordinated notes is
determined by the property trustee not to be practical, cash equal to the
aggregate liquidation amount of the preferred or common securities held
by the holder, plus accumulated and unpaid distributions to the date of
payment.
If the trust cannot pay the full amount due on its preferred and common
securities because insufficient assets are available for payment, then the
amounts payable by the trust on its preferred and common securities will be
paid on a pro rata basis. However, if an event of default under the
subordinated indenture has occurred and is continuing with respect to any
series of related junior subordinated notes, the total amounts due on the
preferred securities will be paid before any distribution on the common
securities.
Events of Default
The following will be events of default under the trust agreement:
. an event of default under the subordinated indenture occurs with respect
to any series of related junior subordinated notes; or
. any other event of default specified in the applicable prospectus
supplement occurs.
If an event of default with respect to a series of related junior
subordinated notes occurs and is continuing under the subordinated indenture,
and the subordinated indenture trustee or the holders of not less than 33% in
principal amount of the related junior subordinated notes outstanding fail to
declare the principal amount of all
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of such junior subordinated notes to be immediately due and payable, the
holders of at least 33% in aggregate liquidation amount of the outstanding
preferred securities will have the right to declare such principal amount
immediately due and payable by providing notice to us, the property trustee and
the subordinated indenture trustee.
At any time after a declaration of acceleration has been made with respect
to a series of related junior subordinated notes and before a judgment or
decree for payment of the money due has been obtained, the holders of a
majority in liquidation amount of the preferred securities may rescind any
declaration of acceleration with respect to the related junior subordinated
notes and its consequences:
. if we deposit with the trustee funds sufficient to pay all overdue
principal of and premium and interest on the related junior subordinated
notes and other amounts due to the subordinated indenture trustee and the
property trustee; and
. if all existing events of default with respect to the related junior
subordinated notes have been cured or waived except non-payment of
principal or interest on the related junior subordinated notes that has
become due solely because of the acceleration.
The holders of a majority in liquidation amount of the preferred securities
may waive any past default under the subordinated note indenture with respect
to related junior subordinated notes, other than a default in the payment of
principal of, or any premium or interest on, any related junior subordinated
note or a default with respect to a covenant or provision that cannot be
amended or modified without the consent of the holder of each outstanding
related junior subordinated note affected. In addition, the holders of at least
a majority in liquidation amount of the preferred securities may waive any past
default under the trust agreement.
The holders of a majority in liquidation amount of the preferred securities
shall have the right to direct the time, method and place of conducting any
proceedings for any remedy available to the property trustee or to direct the
exercise of any trust or power conferred on the property trustee under the
trust agreement.
A holder of preferred securities may institute a legal proceeding directly
against us, without first instituting a legal proceeding against the property
trustee or any other person or entity, for enforcement of payment to the holder
of principal and any premium or interest on the junior subordinated notes of
the related series having a principal amount equal to the aggregate liquidation
amount of the preferred securities of the holder if we fail to pay principal
and any premium or interest on the related series of junior subordinated notes
when payable.
Everest Holdings and the regular trustees are required to furnish annually
to the property trustee for the trust certificates to the effect that, to the
best knowledge of the individuals providing the certificates, Everest Holdings
and the trust are not in default under the trust agreement, or if there has
been a default, specifying the default and its status.
Consolidation, Merger or Amalgamation of the Trust
The trust may not consolidate or merge with or into, or be replaced by or
convey, transfer or lease its properties and assets substantially as an
entirety to any entity, except as described below. The trust may, without the
consent of the holders of the outstanding preferred securities, consolidate or
merge with or into, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized under
the laws of any State if:
. the successor entity either:
. expressly assumes all of the obligations of the trust relating to its
preferred securities; or
. substitutes for the trust's preferred securities other securities
having substantially the same terms as the preferred securities, so
long as the substituted successor securities rank the same as the
preferred securities for distributions and payments upon liquidation,
redemption and otherwise;
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. we appoint a trustee of the successor entity who has substantially the
same powers and duties as the property trustee of the trust;
. the preferred securities are listed or traded, or any substituted
successor securities will be listed upon notice of issuance, on the same
national securities exchange or other organization on which the preferred
securities are then listed or traded;
. the merger event does not cause the preferred securities or any
substituted successor securities to be downgraded by any national rating
agency;
. the merger event does not adversely affect the rights, preferences and
privileges of the holders of the preferred securities or any substituted
successor securities in any material respect;
. the successor entity has a purpose substantially identical to that of the
trust;
. prior to the merger event, we have received an opinion of counsel from a
nationally recognized law firm stating that:
. the merger event does not adversely affect the rights, preferences and
privileges of the holders of the trust's preferred securities or any
successor securities in any material respect; and
. following the merger event, neither the trust nor the successor entity
will be required to register as an investment company under the
Investment Company Act of 1940; and
. we or our permitted transferee own all of the common securities of the
successor entity and guarantee the obligations of the successor entity
under the substituted successor securities at least to the extent
provided under the preferred securities guarantee.
In addition, unless all of the holders of the preferred securities approve
otherwise, the trust may not consolidate, amalgamate, merge with or into, or be
replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to any other entity or permit any other entity to
consolidate, amalgamate, merge with or into or replace it if the transaction
would cause the trust or the successor entity to be taxable as a corporation or
classified other than as a grantor trust for United States federal income tax
purposes.
Voting Rights
Unless otherwise specified in the prospectus supplement, the holders of the
preferred securities will have no voting rights except as discussed below and
under "--Amendment of Trust Agreement" and "Description of the Preferred
Securities Guarantee--Amendments and Assignment", and as otherwise required by
law.
If any proposed amendment to the trust agreement provides for, or the
regular trustees of the trust otherwise propose to effect:
. any action that would adversely affect the powers, preferences or special
rights of the preferred securities in any material respect, whether by
way of amendment to the trust agreement or otherwise; or
. the dissolution, winding-up or termination of the trust other than
pursuant to the terms of the trust agreement,
then the holders of the preferred securities as a class will be entitled to
vote on the amendment or proposal. In that case, the amendment or proposal will
be effective only if approved by the holders of at least a majority in
aggregate liquidation amount of the preferred securities.
Without obtaining the prior approval of the holders of a majority in
aggregate liquidation amount of the preferred securities, the trustees of the
trust may not:
. direct the time, method and place of conducting any proceeding for any
remedy available to the subordinated indenture trustee for any related
junior subordinated notes or direct the exercise of any trust or power
conferred on the property trustee with respect to the preferred
securities;
. waive any default that is waivable under the subordinated indenture with
respect to any related junior subordinated notes;
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. cancel an acceleration of the principal of any related junior
subordinated notes; or
. consent to any amendment, modification or termination of the subordinated
indenture or any related junior subordinated notes where consent is
required.
However, if a consent under the subordinated indenture requires the consent of
each affected holder of the related junior subordinated notes, then the
property trustee must obtain the prior consent of each holder of the preferred
securities. In addition, before taking any of the foregoing actions, the
property trustee shall obtain an opinion of counsel experienced in such matters
to the effect that, as a result of such actions, the trust will not be taxable
as a corporation or classified as other than a grantor trust for United States
federal income tax purposes.
The property trustee will notify all preferred securities holders of the
trust of any notice of default received from the subordinated indenture trustee
with respect to the junior subordinated notes held by the trust.
Any required approval of the holders of the preferred securities may be
given at a meeting of the holders of the preferred securities convened for the
purpose or pursuant to written consent. The property trustee will cause a
notice of any meeting at which holders of securities are entitled to vote to be
given to each holder of record of the preferred securities at the holder's
registered address, or to any other address which has been specified in
writing, at least 15 days and not more than 90 days before the meeting.
No vote or consent of the holders of securities will be required for the
trust to redeem and cancel the securities in accordance with the trust
agreement.
Notwithstanding that the 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 Everest Holdings, the trustees of the
trust or any affiliate of Everest Holdings or any trustees of the trust, shall,
for purposes of any vote or consent, be treated as if they were not
outstanding. Preferred securities held by Everest Holdings or any of its
affiliates may be exchanged for related junior subordinated notes at the
election of the holder.
Amendment of the Trust Agreement
The trust agreement may be amended from time to time by Everest Holdings and
the property trustee and the regular trustees of the trust without the consent
of the holders of the preferred securities of the trust to:
. cure any ambiguity, correct or supplement any provision which may be
inconsistent with any other provision or make provisions not inconsistent
with any other provisions with respect to matters or questions arising
under the trust agreement, in each case to the extent that the amendment
does not adversely affect the interests of any holder of the preferred
securities in any material respect; or
. modify, eliminate or add to any provisions to the extent necessary to
ensure that the trust will not be taxable as a corporation or classified
as other than a grantor trust for United States federal income tax
purposes, to ensure that the junior subordinated notes held by the trust
are treated as indebtedness for United States federal income tax purposes
or to ensure that the trust will not be required to register as an
investment company under the Investment Company Act.
Other amendments to the trust agreement of the trust may be made by Everest
Holdings and the trustees of the trust upon approval of the holders of a
majority in aggregate liquidation amount of the outstanding preferred
securities and receipt by the trustees of an opinion of counsel to the effect
that the amendment will not cause the trust to be taxable as a corporation or
classified as other than a grantor trust for United States federal income tax
purposes, affect the treatment of the junior subordinated notes held by the
trust as indebtedness for United States federal income tax purposes or affect
the trust's exemption from the Investment Company Act.
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Notwithstanding the foregoing, without the consent of each affected holder
of common or preferred securities of the trust, the trust agreement may not be
amended to:
. change the amount or timing of any distribution on the common or
preferred securities of the trust or otherwise adversely affect the
amount of any distribution required to be made in respect of the
securities as of a specified date; or
. restrict the right of a holder of any securities to institute suit for
the enforcement of any payment on or after the distribution date.
In addition, no amendment may be made to a trust agreement if the amendment
would:
. cause the trust to be taxable as a corporation or characterized as other
than a grantor trust for United States federal income tax purposes;
. cause the junior subordinated notes held by the trust to not be treated
as indebtedness for United States federal income tax purposes;
. cause the trust to be deemed to be an investment company required to be
registered under the Investment Company Act; or
. impose any additional obligation on Everest Holdings or any trustee of
the trust without its consent.
Removal and Replacement of Trustees
The holder of the trust's common securities may remove or replace any of the
regular trustees and, unless an event of default has occurred and is continuing
under the subordinated indenture, the property and Delaware trustees of the
trust. If an event of default has occurred and is continuing under the
subordinated indenture, only the holders of the trust's preferred securities
may remove or replace the property and Delaware trustees. The resignation or
removal of any trustee will be effective only upon the acceptance of
appointment by the successor trustee in accordance with the provisions of the
trust agreement.
Merger or Consolidation of Trustees
Any entity into which the property trustee or the Delaware trustee may be
merged or converted or with which it may be consolidated, or any entity
resulting from any merger, conversion or consolidation to which the trustee
shall be a party, or any entity succeeding to all or substantially all of the
corporate trust business of the trustee, shall be the successor of the trustee
under the trust agreement; provided, however, that the entity shall be
otherwise qualified and eligible.
Information Concerning the Property Trustee
For matters relating to compliance with the Trust Indenture Act, the
property trustee will have all of the duties and responsibilities of an
indenture trustee under the Trust Indenture Act. The property trustee, other
than during the occurrence and continuance of a default under the trust
agreement, undertakes to perform only the duties as are specifically set forth
in the trust agreement and, after a default, must use 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 given it by the trust agreement at the
request of any holder of the preferred securities unless it is offered
reasonable security or indemnity against the costs, expenses and liabilities
that it might incur. If 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 the holders of the preferred
securities are entitled to vote, then the property trustee will take such
action as it deems advisable and in the best interests of the holders of the
preferred and common securities. In this event, the property trustee will have
no liability except for its own bad faith, negligence or willful misconduct.
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The Chase Manhattan Bank, which is the property trustee for the trust, also
serves as the senior indenture trustee, the subordinated indenture trustee and
the guarantee trustee under the preferred securities guarantee described below.
Everest Holdings and certain of its affiliates maintain banking relationships
with The Chase Manhattan Bank.
Miscellaneous
The regular trustees of the trust are authorized and directed to conduct the
affairs of and to operate the trust in such a way that:
. it will not be taxable as a corporation or classified as other than a
grantor trust for United States federal income tax purposes;
. the junior subordinated notes held by it will be treated as indebtedness
of Everest Holdings for United States federal income tax purposes; and
. it will not be deemed to be an investment company required to be
registered under the Investment Company Act.
Everest Holdings and the trustees of the trust are authorized to take any
action, so long as it is consistent with applicable law, the certificate of
trust or trust agreement, that Everest Holdings and the trustees of the trust
determine to be necessary or desirable for the above purposes.
Registered holders of the preferred securities have no preemptive or similar
rights.
The trust may not incur indebtedness or place a lien on any of its assets.
Governing Law
The trust agreement and the preferred securities will be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the conflict of laws provisions thereof.
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DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
The preferred securities guarantee will be issued pursuant to a guarantee
agreement, dated as of , 1999, between us and The Chase Manhattan
Bank, as the guarantee trustee. We have filed a form of the guarantee
agreement as an exhibit to the registration statement of which this prospectus
is a part. You also may request a copy of the guarantee agreement from the
guarantee trustee at its corporate trust office in Edison, New Jersey. The
guarantee agreement will be qualified under the Trust Indenture Act of 1939.
The terms of the preferred securities guarantee will include those stated in
the guarantee agreement and those made part of the guarantee agreement by
reference to the Trust Indenture Act. This section summarizes all of the
material provisions of the preferred securities guarantee. You should refer to
the guarantee agreement for more detailed information. The guarantee agreement
will be executed at the time we issue any preferred securities and will be
filed with the SEC on a Form 8-K or by a post-effective amendment to the
registration statement of which this prospectus is a part.
The guarantee agreement will be held by the guarantee trustee for the
benefit of the holders of preferred securities of the trust.
General
We will irrevocably agree to pay in full, to the holders of the preferred
securities, the guarantee payments described below, except to the extent
previously paid. We will pay the guarantee payments when and as due,
regardless of any defense, right of set-off or counterclaim that the trust may
have or assert. The following payments, to the extent not paid by the trust,
will be covered by the preferred securities guarantee:
. any accumulated and unpaid distributions required to be paid on the
preferred securities, to the extent that the trust has funds available to
make the payment;
. the redemption price, to the extent that the trust has funds available to
make the payment; and
. upon a voluntary or involuntary dissolution, termination, winding-up or
liquidation of the trust, other than in connection with a distribution of
related junior subordinated notes to holders of the preferred securities,
the lesser of:
. the aggregate of the liquidation amounts specified in the prospectus
supplement for each preferred security plus all accumulated and unpaid
distributions on the preferred security to the date of payment, to the
extent the trust has funds available to make the payment; and
. the amount of assets of the trust remaining available for distribution
to holders of its preferred securities upon liquidation of the trust.
Our obligation to make a guarantee payment may be satisfied by directly
paying the required amounts to the holders of the preferred securities or by
causing the trust to pay the amounts to the holders.
The preferred securities guarantee will be subject to the subordination
provisions described below and will not apply to the payment of distributions
and other payments on the preferred securities when the trust does not have
sufficient funds legally and immediately available to make the distributions
or other payments.
Status of the Preferred Securities Guarantee
The preferred securities guarantee will constitute an unsecured obligation
of Everest Holdings and will rank:
. subordinate and junior in right of payment to all of our other
liabilities except those that rank equally or are subordinate by their
terms; and
. equal with any other preferred securities guarantee now or hereafter
issued by Everest Holdings on behalf of the holders of the preferred
securities issued by any other trust.
The preferred securities guarantee will constitute a guarantee of payment
and not of collection. This means that the holder of the guaranteed security
may sue us to enforce its rights under the preferred securities guarantee
without first suing any other person or entity.
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Amendments and Assignment
No consent of the holders of the preferred securities will be required with
respect to any changes to the preferred securities guarantee that do not
adversely affect the rights of the holders of the preferred securities in any
material respect. Other amendments to the preferred securities guarantee may be
made only with the prior approval of the holders of at least a majority in
aggregate liquidation amount of the preferred securities. All guarantees and
agreements contained in the preferred securities guarantee will be binding on
our successors, assigns, receivers, trustees and representatives and are for
the benefit of the holders of the preferred securities.
Events of Default
An event of default under the preferred securities guarantee occurs if we
fail to make any of our required payments or fail to perform any of our other
obligations, and such failure continues for 30 days, under the preferred
securities guarantee.
The holders of at least a majority in aggregate 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
relating to the preferred securities guarantee or to direct the exercise of any
trust or power given to the guarantee trustee under the preferred securities
guarantee.
The holders of a majority in liquidation amount of preferred securities may
waive any past event of default and its consequences.
Information Concerning Guarantee Trustee
The guarantee trustee under the preferred securities guarantee, other than
during the occurrence and continuance of a default under the preferred
securities guarantee, will perform only the duties that are specifically
described in the preferred securities guarantee. After any default, the
guarantee trustee will 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, a guarantee trustee is under no obligation to exercise any
of its powers as described in the preferred securities guarantee at the request
of any holder of preferred securities unless it is offered reasonable security
and indemnity against the costs, expenses and liabilities that it might incur.
The Chase Manhattan Bank, which is the guarantee trustee, also serves as the
senior indenture trustee, the subordinated indenture trustee and the property
trustee for the trust. Everest Holdings and certain of its affiliates maintain
banking relationships with The Chase Manhattan Bank.
Termination of the Preferred Securities Guarantees
The preferred securities guarantee will terminate once the preferred
securities are paid in full or redeemed in full or upon distribution of the
related junior subordinated notes to the holders of the preferred securities in
accordance with the trust agreement. The preferred securities guarantee will
continue to be effective or will be reinstated if at any time any holder of
preferred securities must restore payment of any sums paid under the preferred
securities or the preferred securities guarantee.
Governing Law
The preferred securities guarantee will be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflict of laws provisions thereof.
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DESCRIPTION OF THE EXPENSE AGREEMENT
We will execute an expense agreement at the same time that the trust issues
the preferred securities. Under the expense agreement, we will irrevocably and
unconditionally guarantee to each creditor of the trust the full amount of the
trust's costs, expenses and liabilities, other than the amounts owed to holders
of its preferred and common securities pursuant to the terms of those
securities. Third parties will be entitled to enforce the expense agreement.
The expense agreement, once executed, will be filed with the SEC on Form 8-K or
by a post-effective amendment to the registration statement of which this
prospectus is a part.
Our obligations under the expense agreement will be subordinated in right of
payment to the same extent as the preferred securities guarantee. The expense
agreement will contain provisions regarding amendment, termination, assignment,
succession and governing law similar to those contained in the preferred
securities guarantee.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
PREFERRED SECURITIES GUARANTEE, EXPENSE AGREEMENT
AND JUNIOR SUBORDINATED NOTES HELD BY THE TRUST
Payments of distributions and redemption and liquidation payments due on the
preferred securities, to the extent the trust has funds available for the
payments, will be guaranteed by us to the extent described under "Description
of the Preferred Securities Guarantee". No single document executed by us in
connection with the issuance of the preferred securities will provide for a
full, irrevocable and unconditional guarantee of the preferred securities. It
is only the combined operation of our obligations under the preferred
securities guarantee, the trust agreement, the subordinated indenture, the
related junior subordinated notes and the expense agreement that has the effect
of providing a full, irrevocable and unconditional guarantee of the trust's
obligations under the preferred securities.
As long as we make payments of interest and other payments when due on the
junior subordinated notes held by the trust, the payments will be sufficient to
cover the payment of distributions and redemption and liquidation payments due
on the preferred securities, primarily because:
. the aggregate principal amount of the junior subordinated notes will be
equal to the sum of the aggregate liquidation amounts of the preferred
and common securities;
. the interest rate and interest and other payment dates on the junior
subordinated notes will match the distribution rate and distribution and
other payment dates for the preferred securities;
. we have agreed to pay for any and all costs, expenses and liabilities of
the trust except the trust's obligations under its preferred securities;
and
. the trust agreement provides that the trust will not engage in any
activity that is inconsistent with the limited purposes of the trust.
If and to the extent that we do not make payments on the junior subordinated
notes held by the trust, the trust will not have funds available to make
payments of distributions or other amounts due on the preferred securities. In
those circumstances, a holder of the preferred securities will not be able to
rely upon the preferred securities guarantee for payment of these amounts.
Instead, the holder may directly sue us to collect its pro rata share of
payments owed. If a holder sues us to collect payment, then we will assume the
holder's rights as a holder of preferred securities under the trust agreement
to the extent we make a payment to the holder in any legal action.
A holder of any preferred security may sue us to enforce its rights under
the preferred securities guarantee without first suing the guarantee trustee,
the trust or any other person or entity.
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PLAN OF DISTRIBUTION
We may sell the senior notes and the junior subordinated notes and the trust
may sell the preferred securities in one or more of the following ways from
time to time:
. to underwriters for resale to the public or to institutional investors;
. through agents to the public or to institutional investors; or
. directly to institutional investors.
The prospectus supplement for each series of senior notes, junior
subordinated notes or preferred securities will set forth the terms of the
offering of those senior notes, junior subordinated notes or preferred
securities, including the name or names of any underwriters or agents. The
prospectus supplement for each series of senior notes, junior subordinated
notes or preferred securities will also set forth the purchase price of the
senior notes, junior subordinated notes or preferred securities, the proceeds
to us or the trust from the sale, any underwriting discounts or agency fees and
other items constituting underwriters' or agents' compensation, the initial
public offering price, any discounts or concession allowed or reallowed or paid
to dealers and the securities exchange, if any, on which the senior notes,
junior subordinated notes or preferred securities may be listed.
If underwriters participate in the sale, the senior notes, junior
subordinated notes or preferred 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 a fixed public offering
price or at varying prices determined at the time of sale.
Unless the applicable prospectus supplement states otherwise, the
obligations of the underwriters to purchase any series of senior notes, junior
subordinated notes or preferred securities will be subject to conditions
precedent and the underwriters will be obligated to purchase all of the series
of senior notes, junior subordinated notes or preferred securities if any are
purchased.
Underwriters and agents may be entitled under agreements entered into with
us and/or the trust to indemnification against specific civil liabilities,
including liabilities under the Securities Act. Underwriters and agents may
engage in transactions with, or perform services for, us in the ordinary course
of business.
Each series of senior notes, junior subordinated notes or preferred
securities will be a new issue of securities and will have no established
trading market. Any underwriters to whom the senior notes, junior subordinated
notes or preferred securities are sold for public offering and sale may make a
market in those senior notes, junior subordinated notes or preferred
securities. However, those underwriters will not be obligated to do so and may
discontinue any market making at any time without notice.
39
<PAGE>
EXPERTS
The consolidated financial statements of Everest Holdings incorporated in
this registration statement by reference to Everest Holdings' Annual Report on
Form 10-K for the year ended December 31, 1998 have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in accounting and auditing.
VALIDITY OF THE SECURITIES
Richards, Layton & Finger, P.A., Wilmington, Delaware, special Delaware
counsel to Everest Holdings and the trust, will pass upon the validity of the
preferred securities for the trust. Mayer, Brown & Platt, Chicago, Illinois,
will pass upon the validity of the senior notes and the junior subordinated
notes for Everest Holdings and the preferred securities guarantee for the
trust.
40
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses of issuance and distribution, other than underwriting
discounts and commissions, to be borne by Everest Holdings are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............. $125,100
Trustee fees and expenses....................................... 32,500
Printing expenses............................................... *
Legal fees and expenses......................................... 150,000
Accounting fees and expenses.................................... 75,000
Blue Sky fees and expenses...................................... 10,000
Miscellaneous................................................... *
--------
Total......................................................... $ *
========
</TABLE>
- --------
* To be filed by amendment.
Item 15. Indemnification of Officers and Directors.
Under Delaware law, a corporation may indemnify a director or officer who
becomes a party to an action, suit or proceeding because of his position as a
director or officer if (1) the director or officer acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation and (2) if the action or proceeding involves a criminal
offense, the director or officer had no reasonable cause to believe his conduct
was unlawful. Article VII of the certificate of incorporation of Everest
Holdings provides that Everest Holdings shall, to the fullest extent permitted
by Delaware General Corporation Law: (x) indemnify its officers, directors,
employees and agents and (y) advance expenses incurred by its officers,
directors, employees or agents in relation to any action, suit or proceeding.
Article VII of the certificate of incorporation of Everest Holdings further
provides that Everest Holdings may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of Everest
Holdings, or who is or was serving at the request of Everest Holdings as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against him
and incurred by him arising in that capacity, whether or not Everest Holdings
would be able to indemnify him against the liability under the provisions of
the Delaware General Corporation Law. In addition, Article VII of the
certificate of incorporation of Everest Holdings provides that its directors
shall not be personally liable to Everest Holdings or its stockholders for
monetary damages for breach of fiduciary duty, except for liability (a) for any
breach of the director's duty of loyalty; (b) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(c) under Section 174 of the Delaware General Corporation Law, which relates to
dividends and repurchases of stock; and (d) for any transaction from which the
director derived an improper personal benefit.
In addition to reiterating the indemnification provisions of certificate of
incorporation of Everest Holdings, Article VI, Section 11 of the by-laws of
Everest Holdings provides that the indemnification of any director, officer,
employee or agent includes reimbursement of expenses, including attorneys' fees
and judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with the defense or settlement of any action,
suit or proceeding. Article VII, Section 11 also provides that advancements of
expenses shall be paid to the director, officer, employee or agent at
reasonable intervals in advance of the final disposition of any action, suit or
proceeding, upon receipt of an undertaking to repay any amounts advanced by
Everest Holdings if it shall ultimately be determined that the person who was
advanced any amounts is not entitled to indemnification. If an indemnification
claim is not paid in a timely manner to the director, officer, employee or
agent, the person has the right to bring suit against Everest Holdings to
recover the unpaid amount of the claim.
II-1
<PAGE>
Everest Holdings also maintains insurance on its directors and officers,
which covers liabilities under the federal securities laws, excluding losses
arising from any claim relating to any deliberately dishonest or fraudulent act
or omission, any criminal or malicious act or omission, any willful violation
of law or any accounting for profits for the purchase or sale of securities of
Everest Holdings within the meaning of Section 16(b) of the Exchange Act.
Item 16. Exhibits.
<TABLE>
<C> <S> <C>
1.1 Form of Underwriting Agreement (Senior Notes).
1.2 Form of Underwriting Agreement (Preferred Securities).
*2.1 Agreement and Plan of Merger among Everest Holdings,
Everest Group and Everest Merger, dated as of September
17, 1999.
*3.1 Certificate of Incorporation of Everest Holdings
(incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-8 (No. 333-05771)).
*3.2 Bylaws (as amended and restated) of Everest Holdings
(incorporated by reference to Exhibit 3.2 to the Annual
Report on Form 10-K for the year ended December 31, 1997).
*3.4 Certificate of Trust of the Trust.
4.1 Form of Indenture for Senior Notes.
4.2 Form of Indenture for Junior Subordinated Notes.
4.3 Form of Senior Note (included in Exhibit 4.1).
4.4 Form of Junior Subordinated Note (included in Exhibit
4.2).
*4.5 Trust Agreement of the Trust.
4.6 Form of Amended and Restated Trust Agreement for the
Trust.
4.7 Form of Preferred Security (included in Exhibit 4.6).
4.8 Form of Guarantee Agreement.
4.9 Form of Expense Agreement (included in Exhibit 4.6).
**5.1 Opinion of Richards, Layton & Finger, P.A., special
Delaware counsel for Everest Holdings and the Trust.
**5.2 Opinion of Mayer, Brown & Platt, counsel for Everest
Holdings and the Trust.
**8.1 Opinion of Mayer, Brown & Platt relating to certain United
States tax matters.
12.1 Statement regarding the computation of ratio of earnings
to fixed charges.
23.1 Consent of PricewaterhouseCoopers LLP.
**23.2 Consent of Richards, Layton & Finger, P.A., (included in
Exhibit 5.1).
**23.3 Consents of Mayer, Brown & Platt (included in Exhibit
5.2).
*24.1 Powers of Attorney (included on page II-4).
25.1 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank, as
Trustee under the Indenture (Senior Notes).
25.2 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank, as
Trustee under the Indenture (Junior Subordinated Notes).
25.3 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank, as
Property Trustee (Preferred Securities).
25.4 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank, as
Guarantee Trustee (Preferred Securities Guarantee).
</TABLE>
- --------
* Previously filed.
** To be filed by amendment.
II-2
<PAGE>
Item 17. Undertakings.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) 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 the 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 SEC pursuant to Rule 424(b) 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; and
(c) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that (a) and (b) do not apply if the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to
the SEC by the registrants pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered in the post-
effective amendment, and the offering of those securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective amendment any of
the securities being registered which remain unsold at the termination
of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of Everest Holdings' annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered in this
registration statement, and the offering of those securities at that
time shall be deemed to be the initial bona fide offering thereof.
(5) To file an application for the purpose of determining the eligibility
of the trustees to act under subsection (a) of Section 310 of the Trust
Indenture Act in accordance with the rules and regulations prescribed
by the SEC under Section 305(b)(2) of the Securities Act.
(6) To provide to the underwriter at the closing specified in the
underwriting agreements certificates in such denominations and
registered in the names as required by the underwriter to permit prompt
delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions described under Item 15 above, or
otherwise, the registrants have been advised that in the opinion of the SEC
this type of indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against these types of liabilities (other than the payment by a
registrant of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
by any 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 the asserted indemnification
by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of the issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Everest
Reinsurance Holdings, 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 amendment to registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Liberty Corner, and
State of New Jersey, on the 15th day of November, 1999.
Everest Reinsurance Holdings, Inc.
/s/ Stephen L. Limauro
By: ____________________________
Stephen L. Limauro
Senior Vice President and
Comptroller
Pursuant to the requirements of the Securities Act of 1933, this amendment
to registration statement has been signed below by the following persons in the
capacities indicated on the 15th day of November, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Joseph V. Taranto* Chairman and Chief Executive Officer and
___________________________________________ Director (Principal Executive Officer)
Joseph V. Taranto
/s/ Stephen L. Limauro Senior Vice President and Comptroller
___________________________________________ (Principal Financial and Accounting
Stephen L. Limauro Officer)
/s/ Martin Abrahams* Director
___________________________________________
Martin Abrahams
/s/ Kenneth J. Duffy* Director
___________________________________________
Kenneth J. Duffy
/s/ John R. Dunne* Director
___________________________________________
John R. Dunne
/s/ Thomas J. Gallagher* Director
___________________________________________
Thomas J. Gallagher
/s/ William F. Galtney, Jr.* Director
___________________________________________
William F. Galtney, Jr.
</TABLE>
/s/ Stephen L. Limauro
*By: ___________________________
Stephen L. Limauro
Attorney-in-fact
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
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 amendment to
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Liberty Corner, and State of New Jersey, on the
15th day of November, 1999.
Everest Re Capital Trust
By: Everest Reinsurance Holdings,
Inc.
as Depositor
/s/ Stephen L. Limauro
By: ________________________________
Stephen L. Limauro
Senior Vice President and
Comptroller
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <S> <C>
1.1 Form of Underwriting Agreement (Senior Notes).
1.2 Form of Underwriting Agreement (Preferred Securities).
*2.1 Agreement and Plan of Merger among Everest Holdings,
Everest Group and Everest Merger, dated as of September
17, 1999.
*3.1 Certificate of Incorporation of Everest Holdings
(incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-8 (No. 333-05771)).
*3.2 Bylaws (as amended and restated) of Everest Holdings
(incorporated by reference to Exhibit 3.2 to the Annual
Report on Form 10-K for the year ended December 31, 1997).
*3.4 Certificate of Trust of the Trust.
4.1 Form of Indenture for Senior Notes.
4.2 Formof Indenture for Junior Subordinated Notes.
4.3 Form of Senior Note (included in Exhibit 4.1).
4.4 Form of Junior Subordinated Note (included in Exhibit
4.2).
*4.5 Trust Agreement of the Trust.
4.6 Form of Amended and Restated Trust Agreement for the
Trust.
4.7 Form of Preferred Security (included in Exhibit 4.6).
4.8 Form of Guarantee Agreement.
4.9 Form of Expense Agreement (included in Exhibit 4.6).
**5.1 Opinion of Richards, Layton & Finger, P.A., special
Delaware counsel for Everest Holdings and the Trust.
**5.2 Opinion of Mayer, Brown & Platt, counsel for Everest
Holdings and the Trust.
**8.1 Opinion of Mayer, Brown & Platt relating to certain United
States tax matters.
12.1 Statement regarding the computation of ratio of earnings
to fixed charges.
23.1 Consent of PricewaterhouseCoopers LLP.
**23.2 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.1).
**23.3 Consents of Mayer, Brown & Platt (included in Exhibit
5.2).
*24.1 Powers of Attorney (included on page II-4).
25.1 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank, as
Trustee under the Indenture (Senior Notes).
25.2 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank, as
Trustee under the Indenture (Junior Subordinated Notes).
25.3 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank, as
Property Trustee (Preferred Securities).
25.4 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank, as
Guarantee Trustee (Preferred Securities Guarantee).
</TABLE>
- --------
*Previously filed.
** To be filed by amendment.
<PAGE>
EXHIBIT 1.1
Everest Reinsurance Holdings, Inc.
Debt Securities
----------------
Underwriting Agreement
----------------------
, 1999
---------- ---
To the Representatives of the
several Underwriters named in the
respective Pricing Agreements
hereinafter described.
Ladies and Gentlemen:
From time to time Everest Reinsurance Holdings, Inc., a Delaware
corporation (the "Company"), proposes to enter into one or more Pricing
Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such
additions and deletions as the parties thereto may determine, and, subject to
the terms and conditions stated herein and therein, to issue and sell to the
firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of its debt securities (the "Securities")
specified in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Designated Securities").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to an Underwriter or Underwriters who act without any firm
being designated as its or their representatives. This Underwriting Agreement
shall not be construed as an obligation of the Company to sell any of the
Securities or as an obligation of any of the Underwriters to purchase the
Securities. The obligation of the Company to issue and sell any of the
Securities and the obligation of any of the Underwriters to purchase any of the
Securities shall be evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing Agreement shall specify
the aggregate principal amount of such Designated Securities, the initial public
offering price of such Designated Securities, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters and the principal amount of such Designated Securities
1
<PAGE>
to be purchased by each Underwriter and shall set forth the date, time and
manner of delivery of such Designated Securities and payment therefor. The
Pricing Agreement shall also specify (to the extent not set forth in the
Indenture and the registration statement and prospectus with respect thereto)
the terms of such Designated Securities. A Pricing Agreement shall be in the
form of an executed writing (which may be in counterparts), and may be evidenced
by an exchange of telegraphic communications or any other rapid transmission
device designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-87363)
and one or more pre-effective amendments thereto (the "Initial Registration
Statement") in respect of the Securities have been filed with the
Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered or to be delivered to the Representatives
and, excluding exhibits to the Initial Registration Statement, but
including all documents incorporated by reference contained in the
prospectus, to the Representatives for each of the other Underwriters, have
been declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore been
filed or transmitted for filing with the Commission (other than
prospectuses filed pursuant to Rule 424(b) of the rules and regulations of
the Commission under the Act, each in the form heretofore delivered to the
Representatives); and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or the
Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or, to the best of the
Company's knowledge, threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement, any post-effective amendment thereto and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial
Registration Statement became effective but excluding Form T-1, each as
amended at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, are hereinafter collectively called
the "Registration Statement"; the prospectus relating to the Securities, in
the form in which it has most recently been filed, or transmitted for
filing, with the Commission on or prior to the date of this Agreement,
being hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of
2
<PAGE>
the date of such Preliminary Prospectus or Prospectus, as the case may be;
any reference to any amendment or supplement to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any documents
filed after the date of such Preliminary Prospectus or Prospectus, as the
case may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Initial Registration Statement shall be deemed to refer to
and include any annual report of the Company filed pursuant to Sections
13(a) or 15(d) of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Securities in the
form in which it is filed with the Commission pursuant to Rule 424(b) under
the Act in accordance with Section 5(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case
may be, conformed in all material respects to the requirements of the Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Securities;
(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by
3
<PAGE>
an Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to
such Securities;
(d) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material loss
or material interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree material to the
Company and its subsidiaries taken as a whole, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock or any
material change in the long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus;
(e) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing (to
the extent such concept is relevant) under the laws of the jurisdiction of
its incorporation, with corporate power and authority to own their
respective properties and conduct their respective businesses as described
in the Prospectus, and each of them has been duly qualified as a foreign
corporation for the transaction of business and is in good standing (to the
extent such concept is relevant) under the laws of each other jurisdiction
in which it owns or leases properties or conducts any business so as to
require such qualification, except where the failure to be so qualified
would not have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole; the Company has full corporate power and
authority to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it; and this Agreement has been duly
executed and delivered by the Company;
(f) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued and outstanding shares of capital
stock of the Company have been duly and validly authorized and issued and
are fully paid and non-assessable;
(g) The Securities have been duly authorized, and, when
Designated Securities are issued and delivered pursuant to this Agreement
and the Pricing Agreement with respect to such Designated Securities, such
Designated Securities will have been duly executed, authenticated, issued
and delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Indenture, which will
be substantially in the form filed as an exhibit to the Registration
Statement; the Indenture has been duly authorized and duly qualified under
the Trust Indenture Act and, at the Time of Delivery for such Designated
Securities (as defined in Section 4 hereof), the Indenture will constitute
a valid and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
4
<PAGE>
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Indenture conforms, and the Designated Securities will conform, in all
material respects, to the descriptions thereof contained in the Prospectus
as amended or supplemented with respect to such Designated Securities;
(h) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the Indenture,
this Agreement and any Pricing Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, except for any such
conflict, breach, violation or default which would not have a material
adverse effect on the financial position, stockholders' equity or results
of operations of the Company and its subsidiaries taken as a whole, nor
will such action result in any violation of the provisions of (A) the
Certificate of Incorporation or By-laws of the Company or the
organizational documents of any of its subsidiaries or (B) any statute or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of
their properties, except, in the case of this clause (B), for any such
violation which, individually or in the aggregate, would not have a
material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation by the Company of the transactions
contemplated by this Agreement or any Pricing Agreement or the Indenture,
except such as have been, or will have been prior to the Time of Delivery,
obtained under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
(i) The statements set forth in the Prospectus under the
captions "Description of the Senior Notes", insofar as it purports to
constitute a summary of the terms of the Securities, and under the caption
"Underwriting", insofar as it purports to describe the provisions of the
laws and documents referred to therein, are accurate and complete in all
material respects;
(j) Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or other
organizational document or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other material
agreement or instrument to which it is a party or by which it or any of its
properties may be bound except for such as individually or in the
aggregate, would not
5
<PAGE>
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole;
(k) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(l) The Company is not and, after giving effect to the offering
and sale of the Securities, will not be an "investment company", as such
term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(m) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its subsidiaries, are independent
public accountants as required by the Act and the rules and regulations of
the Commission thereunder;
(n) The consolidated financial statements and financial
statement schedules of the Company and its consolidated subsidiaries
included in the Registration Statement and the Prospectus fairly present in
all material respects the financial position of the Company and its
consolidated subsidiaries and the results of operations and changes in
financial condition and cash flows as of the dates and periods therein
specified. Such financial statements and financial statement schedules have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise
noted therein);
(o) Each of the Company and its subsidiaries, when necessary, is
duly licensed to conduct an insurance or a reinsurance business, as the
case may be, under the insurance statutes of each jurisdiction in which the
conduct of its business requires such licensing, except for such
jurisdictions in which the failure of the Company or any of its
subsidiaries to be so licensed would not, individually or in the aggregate,
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole. The Company and each of its subsidiaries
have made all required filings under applicable insurance holding company
statutes in each jurisdiction where such filings are required, except for
such jurisdictions in which the failure to make such filings would not,
individually or in the aggregate, have a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole. Each of
the Company and its subsidiaries has all other necessary authorizations,
approvals, orders, consents, certificates, permits, registrations and
qualifications of and from all insurance regulatory authorities necessary
to conduct their respective businesses as described in the Prospectus,
except where the failure to have such authorizations, approvals, orders,
consents, certificates, permits, registrations or
6
<PAGE>
qualifications would not, individually or in the aggregate, have a material
adverse effect on the consolidated financial position, stockholders' equity
or results of operations of the Company and its subsidiaries taken as a
whole, and neither the Company nor any of its subsidiaries has received any
notification from any insurance regulatory authority to the effect that any
additional authorization, approval, order, consent, certificate, permit,
registration and qualification needs to be obtained by either the Company
or any of its subsidiaries, in any case, where it could be reasonably
expected that (x) the Company or any of its subsidiaries would be required
either to obtain such additional authorization, approval, order, consent,
certificate, permit, registration or qualification or to cease or otherwise
limit the writing of certain business and (y) the failure to obtain such
additional authorization, approval, order, consent, certificate, permit,
registration or qualification or the limiting of the writing of such
business would have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole; and no insurance regulatory authority
having jurisdiction over the Company or any of its subsidiaries has issued
any order or decree impairing, restricting or prohibiting the payment of
dividends by or to the Company or any of its subsidiaries except as set
forth in the letter dated October 21, 1999 from the State of Delaware
Department of Insurance to Everest Reinsurance Company;
(p) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters pursuant
to this Agreement shall be deemed to be a representation and warranty by
the Company, and not by such officer in an individual capacity, to each
Underwriter as to the matters covered thereby; and
(q) The Company has reviewed its operations and that of its
subsidiaries and has made inquiries of any third parties with which the
Company or any of its subsidiaries has a material relationship to evaluate
the extent to which the business or operations of the Company or any of its
subsidiaries will be affected by the Year 2000 Problem. As a result of such
review and inquiries to which responses have been received, and except as
described in the Prospectus, the Company does not believe that the Year
2000 Problem will have a material adverse effect on the general affairs,
management, the current or future consolidated financial position, business
prospects, stockholders' equity or results of operations of the Company and
its subsidiaries or result in any material loss or material interference
with the Company's business or operations. The "Year 2000 Problem" as used
herein means any significant risk that computer hardware or software used
in the receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind will not, in the case of dates
or time periods occurring after December 31, 1999, function at least as
effectively as in the case of dates or time periods occurring prior to
January 1, 2000.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
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<PAGE>
4. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least 48 hours' prior notice to the
Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer of
Federal (same-day) funds to the account specified by the Company to the
Representatives at least forty-eight hours in advance or at such other place and
time and date as the Representatives and the Company may agree upon in writing,
such time and date being herein called the "Time of Delivery" for such
Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended or supplemented in
relation to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Securities or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further
amendment or any supplement to the Registration Statement or Prospectus as
amended or supplemented after the date of the Pricing Agreement relating to
such Securities and prior to the Time of Delivery for such Securities which
shall be disapproved by the Representatives for such Securities promptly
after reasonable notice thereof; to advise the Representatives promptly of
any such amendment or supplement after such Time of Delivery and furnish
the Representatives with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act for so long as the delivery of a prospectus is required
in connection with the offering or sale of such Securities, and during such
same period to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission, of
the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any prospectus relating to the Securities, of the
suspension of the qualification of such Securities for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop order or of
any such order preventing or suspending the use of any prospectus relating
to the Securities or suspending any such qualification, to promptly use its
best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities for
offering and sale under the securities laws of such jurisdictions in the
United States as the Representatives may request and to comply with such
laws so as to permit the continuance of sales and dealings therein
8
<PAGE>
in such jurisdictions for as long as may be necessary to complete the
distribution of such Securities, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or as a
dealer in securities or to file a general consent to service of process in
any jurisdiction or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise subject;
(c) Prior to 12:00 p.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to
time, to furnish the Underwriters with copies of the Prospectus as amended
or supplemented in New York City in such quantities as the Representatives
may reasonably request, and, if the delivery of a prospectus is required at
any time prior to the expiration of nine months after the time of issue of
the Prospectus in connection with the offering or sale of the Securities
and if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during such
same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act, the Exchange Act or the Trust Indenture Act,
to notify the Representatives and upon their request to file such document
and to prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Representatives may from time to
time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement, an earnings statement (as
defined in Rule 158(c) under the Act) of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158); and
(e) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the
date of this Agreement, and the Company shall at the time of filing either
pay to the Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
out-of-pocket expenses in connection with the preparation, printing and filing
of the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
(excluding any related legal fees)
9
<PAGE>
any Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Indenture, any Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) all expenses
in connection with the qualification of the Securities for offering and sale
under state securities laws as provided in Section 5(b) hereof, including the
reasonable fees and disbursements of counsel for the Underwriters in connection
with such qualification and in connection with the Blue Sky and Legal Investment
Surveys; (iv) any fees charged by securities rating services for rating the
Securities; (v) any filing fees incident to, and the reasonable fees and
disbursements of counsel for the Underwriters in connection with, any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Securities; (vi) the cost of preparing the Securities; (vii) the
fees and expenses of any Trustee and any agent of any Trustee and the fees and
disbursements of counsel for any Trustee in connection with any Indenture and
the Securities; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have become effective
by 10:00 P.M., Washington, D.C. time, on the date of this Agreement; no
stop order suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all requests
for additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such written opinion or opinions, dated the Time of
Delivery for such Designated Securities, with respect to the matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) Counsel for the Company satisfactory to the Representatives
shall have furnished to the Representatives their written opinion, dated
the Time of Delivery for such Designated
10
<PAGE>
Securities, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus as amended or
supplemented;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented and all of the issued shares
of capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable;
(iii) This Agreement and the Pricing Agreement with respect to
the Designated Securities have been duly authorized, executed and delivered
by the Company;
(iv) The Designated Securities have been duly authorized,
executed, issued and delivered by the Company and authenticated by the
Trustee and constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture; and the Designated
Securities and the Indenture conform in all material respects to the
descriptions thereof in the Prospectus as amended or supplemented;
(v) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
instrument of the Company, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture has been duly
qualified under the Trust Indenture Act;
(vi) No consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Designated Securities or the
consummation by the Company of the transactions contemplated by this
Agreement or such Pricing Agreement or the Indenture, except such as have
been obtained under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, orders, registrations or qualifications as may
be required under state securities or Blue Sky laws and state insurance
laws in connection with the purchase and distribution of the Designated
Securities by the Underwriters;
(vii) The statements set forth in the Prospectus under the
caption "Underwriting", insofar as it purports to describe the provisions
of the laws and documents referred to therein, are accurate and complete in
all material respects;
11
<PAGE>
(viii) The Company is not an "investment company", as such term
is defined in the Investment Company Act;
(ix) The Registration Statement and the Prospectus as amended
or supplemented and any further amendments and supplements thereto made by
the Company prior to the Time of Delivery for the Designated Securities
(other than the financial statements and related schedules and other
financial data included therein or omitted therefrom, as to which such
counsel need express no opinion) comply as to form in all material respects
with the requirements of the Act and the Trust Indenture Act and the rules
and regulations thereunder; and
(x) Such counsel shall also state that although they do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
except for those referred to in the opinion in subsections (iv) and (vii)
of this Section 7(c) no facts have come to their attention that would cause
them to believe that, as of its effective date, the Registration Statement
or any further amendment thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related schedules and
other financial data included therein or omitted therefrom, as to which
such counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that,
as of its date, the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related schedules and
other financial data included therein or omitted therefrom, as to which
such counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or that, as of the Time of Delivery, the Prospectus as
amended or supplemented or any further amendment or supplement thereto made
by the Company prior to the Time of Delivery (other than the financial
statements and related schedules and other financial data included therein
or omitted therefrom, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and of public officials. Such opinions shall be limited
to the federal laws of the United States, the laws of New York State and the
General Corporation Law of the State of Delaware. The parties acknowledge that,
in rendering such opinions, such counsel is not rendering any opinion with
respect to the insurance laws or regulations or state securities laws of any
state.
References to the Registration Statement and the Prospectus in this
paragraph (c) shall include any amendment or supplement thereto at the date of
such opinion.
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<PAGE>
(d) Janet Burak, General Counsel for the Company, shall have
furnished to you a written opinion, dated such Time of Delivery, in form
and substance reasonably satisfactory to you, to the effect that:
(i) The Company and each of its subsidiaries, where necessary,
is duly licensed to conduct an insurance or a reinsurance business, as the
case may be, under the insurance statutes of each jurisdiction in which the
conduct of its business requires such licensing, except for such
jurisdictions in which the failure of the Company or any of its
subsidiaries to be so licensed would not, individually or in the aggregate,
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole. The Company and its subsidiaries have made
all required filings under applicable insurance holding company statutes in
each jurisdiction where such filings are required, except for such
jurisdictions in which the failure to make such filings would not,
individually or in the aggregate, have a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole. Each of
the Company and its subsidiaries has all other necessary authorizations,
approvals, orders, consents, certificates, permits, registrations and
qualifications of and from all insurance regulatory authorities necessary
to conduct their respective businesses as described in the Prospectus,
except where the failure to have such authorizations, approvals, orders,
consents, certificates, permits, registrations or qualifications would not,
individually or in the aggregate, have a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, and
neither the Company nor any of its subsidiaries has received any
notification from any insurance regulatory authority to the effect that any
additional authorization, approval, order, consent, certificate, permit,
registration or qualification is needed to be obtained by either the
Company or any of its subsidiaries, in any case where it could be
reasonably expected that (x) the Company or any of its subsidiaries would
be required either to obtain such additional authorization, approval,
order, consent, certificate, permit, registration or qualification or to
cease or otherwise limit the writing of certain business and (y) the
failure to obtain such additional authorization, approval, order, consent,
certificate, permit, registration or qualification or the limiting of the
writing of such business would have a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole; and no
insurance regulatory authority having jurisdiction over the Company or any
of its subsidiaries has issued any order or decree impairing, restricting
or prohibiting the payment of dividends by or to the Company or any of its
subsidiaries except as set forth in the letter dated October 21, 1999 from
the State of Delaware Department of Insurance to Everest Reinsurance
Company;
(ii) Other than as set forth in the Prospectus or the
Registration Statement, there are no legal or governmental proceedings
pending to which the
13
<PAGE>
Company or any of its subsidiaries is a party or of which any property of
the Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually or
in the aggregate have a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole; and, to the best knowledge
of such counsel, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(iii) Such counsel does not know of any contract or document of
a character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the Prospectus
as amended or supplemented or required to be described in the Registration
Statement or the Prospectus as amended or supplemented which is not so
filed, incorporated by reference or described;
(iv) The issue and sale of the Designated Securities and the
compliance by the Company with all of the provisions of the Designated
Securities, the Indenture, this Agreement and the Pricing Agreement with
respect to the Designated Securities and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, (A) any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the property
of the Company or any of its subsidiaries is subject, or any statute or any
rule, regulation or order known to such counsel of any court or
governmental agency or body having jurisdiction over any of its
subsidiaries or any of their properties (except for such conflicts,
breaches, violations or defaults which do not or would not, individually or
in the aggregate have a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole), or (B) any provision of the
charter or by-laws of the Company or any of its subsidiaries;
(v) No consent, approval, authorization or order of, or
registration, qualification or filing with, any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties is required for the
issue and sale of the Designated Securities or the consummation by the
Company of the transactions contemplated by this Agreement or such Pricing
Agreement or the Indenture under state or foreign insurance laws in
connection with the purchase and distribution of the Designated Securities
by the Underwriters.
(vi) The documents incorporated by reference in the Prospectus
as amended or supplemented (other than the financial statements and related
14
<PAGE>
schedules and other financial data included therein or omitted therefrom,
as to which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may be, complied
as to form in all material respects with the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and such counsel has no reason to believe that any
of such documents, when they became effective or were so filed, as the case
may be, contained, in the case of a registration statement which became
effective under the Act, an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, or, in the case of other documents
which were filed under the Act or the Exchange Act with the Commission, an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so filed,
not misleading; and
(vii) Neither the Company nor any of its subsidiaries is (i) in
violation of its respective charter or by-laws or (ii) to the knowledge of
such counsel, in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other material agreement
or instrument to which it is a party or by which it or any of its
properties may be bound or affected, except, in the case of clause (ii),
for such as, individually or in the aggregate, would not have a material
adverse effect on the consolidated financial position, stockholders' equity
or result of operations of the Company and its subsidiaries taken as a
whole.
In rendering such opinion, such counsel may rely, as to matters of fact, to
the extent such counsel deems proper, on certificates or responsible officers of
the Company and its subsidiaries and of public officials and, as to matters
involving the application of the General Corporation Law of the State of
Delaware, upon the opinions of the Company counsel referred to in Section 7(c).
Such opinions shall be limited to the federal laws of the United States and the
laws of the State of New Jersey and the general corporate and insurance laws of
the State of Delaware.
(e) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement with
respect to such Designated Securities and at the Time of Delivery for such
Designated Securities, the independent accountants of the Company who have
certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement shall
have furnished to the Representatives a letter, dated the effective date of
the Registration Statement or the date of the most recent report filed with
the Commission containing financial statements and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of Delivery,
respectively, to the effect set forth in Annex II hereto, and with respect
to such letter dated such Time of Delivery, as to such other
15
<PAGE>
matters as the Representatives may reasonably request and in form and
substance satisfactory to the Representatives;
(f) (i) Neither the Company nor any of its subsidiaries taken as a
whole shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as
amended or supplemented prior to the date of the Pricing Agreement relating
to the Designated Securities any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus as
amended or supplemented prior to the date of the Pricing Agreement relating
to the Designated Securities, and (ii) since the respective dates as of
which information is given in the Prospectus as amended or supplemented
prior to the date of the Pricing Agreement relating to the Designated
Securities there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change, or
any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus as amended or supplemented prior to the
date of the Pricing Agreement relating to the Designated Securities, the
effect of which, in any such case described in clause (i) or (ii), is in
the judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Designated Securities on the terms and in the manner
contemplated in the Prospectus as amended or supplemented relating to the
Designated Securities;
(g) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities or preferred stock or the Company's
financial strength or claims paying ability by any "nationally recognized
statistical rating organization", as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's
debt securities or preferred stock or the Company's financial strength or
claims paying ability, the effect of which, in any such case described in
clause (i) or (ii), is in the judgment of the Representatives so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Designated Securities on the terms
and in the manner contemplated in the Prospectus as amended or supplemented
relating to the Designated Securities;
(h) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally
on the New York Stock Exchange; (ii) a suspension or material limitation in
trading in the Company's securities on the New York Stock Exchange (other
than in connection with the proposed restructuring of the Company as
described in the Prospectus as amended or supplemented); (iii) a general
moratorium on commercial banking activities declared by either Federal or
New York State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event
specified in this clause (iv) in the judgment of
16
<PAGE>
the Representatives makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Designated Securities on the
terms and in the manner contemplated in the Prospectus as amended or
supplemented relating to the Designated Securities;
(i) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
(j) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities a
certificate or certificates of officers of the Company reasonably
satisfactory to the Representatives as to the accuracy of the
representations and warranties of the Company herein at and as of such Time
of Delivery, as to the performance by the Company of all of its obligations
hereunder to be performed at or prior to such Time of Delivery, as to the
matters set forth in subsections (a) and (f) of this Section and as to such
other matters as the Representatives may reasonably request;
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities; and provided,
further, that the Company shall not be liable to any Underwriter under the
indemnity agreement in this subsection (a) with respect to any Preliminary
Prospectus (as supplemented by a preliminary prospectus supplement filed with
the Commission) to the extent that any such loss, claim, damage or liability of
such Underwriter results from the fact that such Underwriter sold Securities to
a person as to whom it shall be established that there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the Prospectus
(excluding documents incorporated by reference) or of the Prospectus as then
amended or supplemented (excluding documents incorporated by reference) in any
case where such delivery is required by the Act if the Company has previously
furnished copies thereof in sufficient quantity to such Underwriter and the
loss, claim, damage or liability of such Underwriter results from an untrue
statement or
17
<PAGE>
omission of a material fact contained in the Preliminary Prospectus (as so
supplemented) which was (i) identified in writing to such Underwriter at or
prior to the earlier of the filing with the Commission or the furnishing to such
Underwriter of the Prospectus and (ii) corrected in the Prospectus (excluding
documents incorporated by reference) or in the Prospectus as then amended or
supplemented (excluding documents incorporated by reference).
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through
the Representatives expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company
in connection with investigating or defending any such action or claim as
such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to
such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all
liability arising
18
<PAGE>
out of such action or claim and (ii) does not include a statement as to or
an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party. No indemnified party shall, without the written
consent of the indemnifying party (such written consent not to be
unreasonably withheld), effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending action or claim
in respect of which indemnification or contribution is sought hereunder if
the indemnifying party has assumed the defense of such action or claim.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters of the Designated Securities on the other
from the offering of the Designated Securities to which such loss, claim,
damage or liability (or action in respect thereof) relates. If, however,
the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand and the
Underwriters of the Designated Securities on the other in connection with
the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and such Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from such offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by such Underwriters. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or such Underwriters on
the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as
a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed
to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated
Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to
19
<PAGE>
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters of Designated
Securities in this subsection (d) to contribute are several in proportion
to their respective underwriting obligations with respect to such
Securities and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties reasonably satisfactory to the
Representatives to purchase such Designated Securities on such terms. In the
event that, within the respective prescribed period, the Representatives notify
the Company that they have so arranged for the purchase of such Designated
Securities, or the Company notifies the Representatives that it has so arranged
for the purchase of such Designated Securities, the Representatives or the
Company shall have the right to postpone the Time of Delivery for such
Designated Securities for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Designated Securities of a defaulting Underwriter or Underwriters by
the Representatives and the Company as provided in subsection (a) above,
the aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount
of the Designated Securities, then the Company shall have the right to
require each non-defaulting Underwriter to purchase the principal amount of
Designated Securities which such Underwriter agreed to purchase under the
Pricing Agreement relating to such Designated Securities and, in addition,
to require each non-defaulting Underwriter to purchase its pro rata share
(based on the principal amount of Designated Securities which such
Underwriter agreed to purchase under such Pricing Agreement) of the
Designated Securities of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
20
<PAGE>
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Designated Securities
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Sections 6 and 8 hereof; but, if for any other reason
Designated Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail,
overnight courier, telex or facsimile transmission to the address of the
Representatives as set forth in the Pricing Agreement; and if to the Company
shall be delivered or sent by mail, overnight courier, telex or facsimile
transmission to the address of the Company set forth in the Registration
Statement: Attention: Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters' Questionnaire, or telex constituting such Questionnaire,
21
<PAGE>
which address will be supplied to the Company by the Representatives upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used herein,
"business day" shall mean any day when the Commission's office in Washington,
D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
Very truly yours,
Everest Reinsurance Holdings, Inc.
By:
...................................
Name:
Title:
22
<PAGE>
ANNEX I
Pricing Agreement
-----------------
Goldman, Sachs & Co.,
[Names of Co-Representative(s),]
As Representatives of the several
Underwriters named in Schedule I hereto,
[c/o Goldman, Sachs & Co.,]
85 Broad Street,
New York, New York 10004.
............, 2000
Ladies and Gentlemen:
Everest Reinsurance Holdings, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated . . . . . . . . . . . ., 1999 (the "Underwriting
Agreement"), to issue and sell to the Underwriters named in Schedule I hereto
(the "Underwriters") the Securities specified in Schedule II hereto (the
"Designated Securities"). Each of the provisions of the Underwriting Agreement
is incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Securities pursuant to Section 12
of the Underwriting Agreement and the address of the Representatives referred to
in such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in
<PAGE>
Schedule II hereto, the principal amount of Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and each of the Representatives plus one for
each counsel counterparts hereof, and upon acceptance hereof by you, on behalf
of each of the Underwriters, this letter and such acceptance hereof, including
the provisions of the Underwriting Agreement incorporated herein by reference,
shall constitute a binding agreement between each of the Underwriters and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Underwriters is or will be pursuant to the authority set forth in a form
of Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
Everest Reinsurance Holdings, Inc.
By:
.......................................
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
[Name(s) of Co-Representative(s)]
By: ...................................
(Goldman, Sachs & Co.)
[[Name(s) of Co-Representative Corporation(s)]
By:....................................
Name:
Title:
....................................
](Name(s) of Co-Representative
Partnership(s))]]
On behalf of each of the Underwriters
2
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
Principal
Amount of
Designated
Securities
to be
Underwriter Purchased
- ----------- ----------
<S> <C>
Goldman, Sachs & Co.................................................... $
[Name(s) of Co-Representative(s)]......................................
[Names of other Underwriters]..........................................
-----------
Total........................................................ $
===========
</TABLE>
I-1
<PAGE>
SCHEDULE II
Title of Designated Securities:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due ,
Aggregate principal amount:
[$]
Price to Public:
% of the principal amount of the Designated Securities, plus accrued
interest[, if any,] from to [and accrued
amortization[, if any,] from to ]
Purchase Price by Underwriters:
% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued
amortization[, if any,] from to ]
Form of Designated Securities:
[Definitive form to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of [The
Depository Trust Company or its designated custodian] [the
Representatives]](13)
[Book-entry only form represented by one or more global securities deposited
with The Depository Trust Company ("DTC") or its designated custodian, to be
made available for checking by the Representatives at least twenty-four hours
prior to the Time of Delivery at the office of DTC.]
Specified funds for payment of purchase price:
Federal (same day) funds
Time of Delivery:
a.m. (New York City time), , 19
Indenture:
Indenture dated , 19 , between the Company and
, as Trustee
Maturity:
Interest Rate:
[ %] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Dates:
[months and dates, commencing ....................., 19..]
Redemption Provisions:
[No provisions for redemption]
II-1
<PAGE>
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the amount
of [$ ] or an integral multiple thereof,
[on or after , at the following redemption prices
(expressed in percentages of principal amount). If [redeemed on or before
, %, and if] redeemed during the 12-month period beginning
,
Redemption
Year Price
---- ----------
and thereafter at 100% of their principal amount, together in each case with
accrued interest to the redemption date.]
[on any interest payment date falling on or after , , at
the election of the Company, at a redemption price equal to the principal
amount thereof, plus accrued interest to the date of redemption.]]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund to
retire [$ ] principal amount of Designated Securities on in
each of the years through at 100% of their principal amount
plus accrued interest[, together with [cumulative] [noncumulative]
redemptions at the option of the Company to retire an additional [$ ]
principal amount of Designated Securities in the years through at
100% of their principal amount plus accrued interest.]
[If Designated Securities are extendable debt securities, insert--
Extendable Provisions:
Designated Securities are repayable on , [insert date and
years], at the option of the holder, at their principal amount with accrued
interest. The initial annual interest rate will be %, and thereafter
the annual interest rate will be adjusted on , and
to a rate not less than % of the effective annual interest rate on U.S.
Treasury obligations with -year maturities as of the [insert date 15
days prior to maturity date] prior to such [insert maturity date].]
II-2
<PAGE>
[If Designated Securities are floating rate debt securities, insert--
Floating rate provisions:
Initial annual interest rate will be % through [and thereafter
will be adjusted [monthly] [on each , , and
] [to an annual rate of % above the average rate for -year
[month][securities][certificates of deposit] issued by
and [insert names of banks].] [and the annual interest rate
[thereafter] [from through ] will be the interest yield
equivalent of the weekly average per annum market discount rate for
-month Treasury bills plus % of Interest Differential (the
excess, if any, of (i) the then current weekly average per annum secondary
market yield for -month certificates of deposit over (ii) the then
current interest yield equivalent of the weekly average per annum market
discount rate for -month Treasury bills); [from and thereafter
the rate will be the then current interest yield equivalent plus % of
Interest Differential].]
Defeasance provisions:
Closing location for delivery of Designated Securities:
Additional Closing Conditions:
Paragraph 7(g) of the Underwriting Agreement should be modified in the event
that the Securities are denominated in, indexed to, or principal or interest
are paid in, a currency other than the U.S. dollar, more than one currency or
in a composite currency. The country or countries issuing such currency
should be added to the banking moratorium and hostilities clauses and the
following additional clause should be added to the paragraph (the entire
paragraph should be restated, as amended):
"; ( ) the imposition of the proposal of exchange controls by any
governmental authority in [insert the country or countries issuing such
currency, currencies or composite currency]".
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
II-3
<PAGE>
[Other Terms]* :
- ---------------------------
* A description of particular tax, accounting or other unusual features (such
as the addition of event risk provisions) of the Designated Securities should
be set forth, or referenced to an attached and accompanying description, if
necessary, to ensure agreement as to the terms of the Designated Securities
to be purchased and sold. Such a description might appropriately be in the
form in which such features will be described in the Prospectus Supplement
for the offering.
II-4
<PAGE>
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable rules and regulations adopted by the Commission;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, pro forma
financial information) examined by them and included or incorporated by
reference in the Registration Statement or the Prospectus comply as to form
in all material respects with the applicable accounting requirements of the
Act or the Exchange Act, as applicable, and the related rules and
regulations; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public
Accountants of the consolidated interim financial statements, selected
financial data, pro forma financial information and/or condensed financial
statements derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports thereon,
copies of which have been furnished to the representative or
representatives of the Underwriters (the "Representatives") such term to
include an Underwriter or Underwriters who act without any firm being
designated as its or their representatives and are attached to such
letters;
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly report on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which [have been separately furnished to the Representatives][are
attached to such letters]; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and
regulations, nothing came to their attention that caused them to believe
that the unaudited condensed consolidated financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and
regulations adopted by the Commission;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form
<PAGE>
10-K for the most recent fiscal year agrees with the corresponding amounts
(after restatement where applicable) in the audited consolidated financial
statements for five such fiscal years included or incorporated by reference
in the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the published rules and regulations adopted by
the Commission, or (ii) any material modifications should be made to
the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the Prospectus for
them to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or
2
<PAGE>
incorporated by reference in the Company's Annual Report on Form 10-K
for the most recent fiscal year;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the rules and regulations
adopted by the Commission thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the compilation
of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders' equity or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in clause (E) there were any decreases
in consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified by
the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each
3
<PAGE>
case for increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are derived
from the general accounting records of the Company and its subsidiaries,
which appear in the Prospectus (excluding documents incorporated by
reference), or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives or in documents
incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.
4
<PAGE>
Exhibit 1.2
Everest Re Capital Trust
Preferred Securities
guaranteed to the extent set forth in the Guarantees by
EVEREST REINSURANCE HOLDINGS, INC.
-----------------------------
Underwriting Agreement
----------------------
____________ ___, 1999
To the Representatives of the several Underwriters
named in Schedule I to the respective
Pricing Agreements hereinafter described
Ladies and Gentlemen:
From time to time Everest Re Capital Trust, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), and Everest Reinsurance
Holdings, Inc., a Delaware corporation (the "Company"), as depositor of the
trust and as guarantor, propose to enter into one or more Pricing Agreements
(each a "Pricing Agreement") in the form of Annex I hereto, with such additions
and deletions as the parties thereto may determine, and, subject to the terms
and conditions stated herein and therein, to issue and sell to the firms named
in Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its preferred securities (the "Securities")
specified in Schedule II to such Pricing Agreement, representing undivided
beneficial interests in the assets of the Trust (with respect to such Pricing
Agreement, the "Firm Designated Securities"). If specified in such Pricing
Agreement, the Trust may grant the Underwriters the right to purchase at their
election an additional number of Securities, specified as provided in such
Pricing Agreement as provided in Section 3 hereof (the "Optional Designated
Securities"). The Firm Designated Securities and any Optional Designated
Securities are collectively called the "Designated Securities". The proceeds of
the sale of the Designated Securities to the public and of common securities of
the Trust (the "Common Securities") to the Company concurrently with the sale of
the Designated Securities are to be invested in junior subordinated deferrable
interest debentures of the Company (the "Subordinated Debentures") identified in
the Pricing Agreement with respect to such Designated Securities (with respect
to such Pricing Agreement, the "Designated Subordinated Debentures"), to be
issued pursuant to a junior subordinated indenture to be dated as of
_____________ ___, 1999 (the "Indenture") between the Company and The Chase
Manhattan Bank as trustee (the "Indenture Trustee"). The Designated Securities
may be exchangeable into Designated Subordinated Debentures, as specified in
<PAGE>
Schedule II to such Pricing Agreement. The Designated Securities will be
guaranteed by the Company to the extent set forth in the Pricing Agreement with
respect to such Designated Securities (the "Designated Guarantee") (all such
Designated Guarantees together, the "Guarantees").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the amended and restated trust agreement identified in such Pricing
Agreement (with respect to such Pricing Agreement, the "Trust Agreement").
1. Particular sales of Designated Securities may be made from time to time to
the Underwriters of such Designated Securities, for whom the firms designated
as representatives of the Underwriters of such Designated Securities in the
Pricing Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters and to an Underwriter or
Underwriters who act without any firm being designated as its or their
representatives. This Underwriting Agreement shall not be construed as an
obligation of the Trust to sell any of the Securities or as an obligation of any
of the Underwriters to purchase the Securities. The obligation of the Trust to
issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the Pricing
Agreement with respect to the Designated Securities specified therein. Each
Pricing Agreement shall specify the aggregate principal amount of such Firm
Designated Securities, the maximum principal amount of Optional Designated
Securities, if any, the initial public offering price of such Firm and Optional
Designated Securities or the manner of determining such price, the terms of the
Designated Securities, including the terms on which and terms of the securities
into which the Designated Securities will be exchangeable, the purchase price to
the Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters and the principal amount of such Designated Securities to be
purchased by each Underwriter and shall set forth the date, time and manner of
delivery of such Firm Designated Securities and such Optional Designated
Securities, if any, and payment therefor. The Pricing Agreement shall also
specify (to the extent not set forth in the Indenture and registration statement
and prospectus with respect thereto) the terms of such Designated Securities. A
Pricing Agreement shall be in the form of an executed writing (which may be in
counterparts), and may be evidenced by an exchange of telegraphic communications
or any other rapid transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters under this
Agreement and each Pricing Agreement shall be several and not joint.
2. The Trust and the Company, jointly and severally, each represents and
warrants to, and agrees with, each of the Underwriters that:
2
<PAGE>
(a) A registration statement on Form S-3 (File No. 333-87363) and one or
more pre-effective amendments thereto (the "Initial Registration Statement")
in respect of the Securities, the Subordinated Debentures and the Guarantees,
(including the Designated Securities, the Designated Subordinated Debentures
and the Designated Guarantees) have been filed with the Securities and
Exchange Commission (the "Commission"); the Initial Registration Statement
and any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to the Representatives and, excluding exhibits
to the Initial Registration Statement, but including all documents
incorporated by reference contained in the prospectus, to the Representatives
for each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration Statement"),
filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became effective upon filing, no other document with
respect to the Initial Registration Statement or document incorporated by
reference therein has heretofore been filed or transmitted for filing with
the Commission (other than prospectuses filed pursuant to Rule 424(b) of the
rules and regulations of the Commission under the Act, each in the form
heretofore delivered to the Representatives); and no stop order suspending
the effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or, to the best
of the Company's knowledge, threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) under the Act is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement, any post-effective amendment thereto and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial
Registration Statement became effective but excluding Form T-1, each as
amended at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, are hereinafter collectively called
the "Registration Statement"; the prospectus relating to the Securities, the
Subordinated Debentures and the Guarantees, in the form in which it has most
recently been filed, or transmitted for filing, with the Commission on or
prior to the date of this Agreement, being hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to the applicable form under the Act, as of the
date of such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed after
the date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and incorporated by reference in such Preliminary Prospectus or Prospectus,
as the case may be; any reference to any amendment to the Initial
Registration Statement shall be deemed to refer to and include any annual
report of the Trust, if any, and the Company filed pursuant to Sections 13(a)
or 15(d) of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the Registration
Statement; and any reference to the
3
<PAGE>
Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the applicable
Designated Securities in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof,
including any documents incorporated by reference therein as of the date of
such filing);
(b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus or
any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform
in all material respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission thereunder and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing
to the Trust or the Company by an Underwriter of Designated Securities
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities;
(c) The Registration Statement and the Prospectus conform, and any further
amendments or supplements to the Registration Statement or the Prospectus
will conform, in all material respects to the requirements of the Act and the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
rules and regulations of the Commission thereunder and do not and will not,
as of the applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Trust or the Company by an
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Securities;
(d) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or incorporated
by reference in the Prospectus any material loss or material interference
with its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or governmental
action, order or decree material to the Company and its subsidiaries taken as
a whole, otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the
4
<PAGE>
Registration Statement and the Prospectus, there has not been any change in
the capital stock or any material change in the long-term debt of the Company
or any of its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus;
(e) The Trust has been duly created and is validly existing as a business
trust in good standing under the laws of the State of Delaware, with
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus. The Company and each of
its subsidiaries have been duly incorporated and are validly existing as
corporations in good standing (to the extent such concept is relevant) under
the laws of the jurisdiction of its incorporation, with corporate power and
authority to own their respective properties and conduct their respective
businesses as described in the Prospectus, and each of them has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing (to the extent such concept is relevant) under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except where the failure to be
so qualified would not have a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole; the Company has full corporate
power and authority to enter into this Agreement and to carry out all the
terms and provisions hereof to be carried out by it; and this Agreement has
been duly executed and delivered by the Company;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued and outstanding shares of capital stock of
the Company have been duly and validly authorized and issued and are fully
paid and non-assessable; all the outstanding beneficial interests in the
Designated Trust have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the descriptions thereof contained in
the Prospectus;
(g) The Designated Securities have been duly authorized, and, when the
Firm Designated Securities are issued and delivered pursuant to this
Agreement and the Pricing Agreement with respect to such Designated
Securities and, in the case of any Optional Designated Securities, pursuant
to Over-allotment Options (as defined in Section 3 hereof) with respect to
such Securities, such Designated Securities will have been duly and validly
issued and fully paid and non-assessable beneficial interests in the Trust
entitled to the benefits provided by the applicable Trust Agreement, which
will be substantially in the form filed as an exhibit to the Registration
Statement; the Designated Securities conform to the description thereof
contained in the Registration Statement and the Designated Securities will
conform to the description thereof contained in the Prospectus as amended or
supplemented with respect to such Designated Securities;
(h) The holders of the Designated Securities (the "Securityholders") 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;
5
<PAGE>
(i) The Common Securities of the Trust have been duly authorized on behalf
of the Trust by the Company, as depositor of the Trust, and upon delivery by
the Trust to the Company against payment therefor as set forth in the Trust
Agreement, will be duly and validly issued and non-assessable beneficial
interests in the Trust and will conform to the description thereof contained
in the Prospectus; the issuance of the Common Securities of the Trust is not
subject to preemptive or other similar rights; the Common Securities conform
to the description thereof contained in the Registration Statement; and at
each Time of Delivery (as defined in Section 4 hereof), all of the issued and
outstanding Common Securities of the Trust will be directly owned by the
Company free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity;
(j) The Designated Guarantee, the Agreement as to Expenses and Liabilities
between the Company and the Trust set forth in the Pricing Agreement (the
"Designated Expense Agreement") (all such Designated Expense Agreements
together, the "Expense Agreements") the Trust Agreement for the Trust, the
Designated Subordinated Debentures and the Indenture (the Designated
Guarantee, the Designated Expense Agreement, such Trust Agreement, the
Designated Subordinated Debentures and the Indenture being collectively
referred to as the "Company Agreements") have each been duly authorized and
when validly executed and delivered by the Company and, in the case of the
Designated Guarantee, by the Guarantee Trustee (as defined in the Guarantee),
in the case of the Designated Expense Agreement, by the Trust, in the case of
the Trust Agreement, by the Trustees (as defined in the Trust Agreement) and,
in the case of the Indenture, by the Indenture Trustee, and, in the case of
the Company Subordinated Debentures, when validly issued by the Company and
duly authenticated and delivered by the Indenture Trustee, will constitute
valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; the Trust Agreement, the Indenture and the Designated
Guarantee have each been duly qualified under the Trust Indenture Act; the
Designated Subordinated Debentures are entitled to the benefits of the
Indenture; and the Company Agreements, which will be in substantially the
form filed as exhibits to the Registration Statement, will conform, in all
material respects, to the descriptions thereof contained in the Prospectus as
amended or supplemented with respect to the Designated Securities to which
they relate;
(k) The issue and sale of the Designated Securities by the Trust, the
compliance by the Trust with all of the provisions of this Agreement, any
Pricing Agreement and each Over-allotment Option, if any, the Designated
Securities, the Designated Expense Agreement and the Trust Agreement, the
purchase of the Designated Subordinated Debentures by the Trust, the
execution, delivery and performance by the Trust of the Trust Agreement and
the consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other material agreement or instrument to which
the Trust is a party or by which the Trust is bound or to which any of the
property or assets of the Trust is subject, except for any such conflict,
breach, violation or default which would not have a material
6
<PAGE>
adverse effect on consolidated financial position, stockholders' equity or
results of operations of the Trust, nor will such action result in any
violation of the provisions of (A) the Trust Agreement or (B) any statute or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Trust or any of its properties, except, in the
case of this clause (B), for any such violation which, individually or in the
aggregate, would not have a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations of the
Trust; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Designated Securities and the Common
Securities by the Trust, the purchase of the Subordinated Debentures by the
Trust or the consummation by the Trust of the transactions contemplated by
this Agreement, the Pricing Agreement or any Over-allotment Option, the
Designated Expense Agreement, the Indenture or the Trust Agreement, except
such as have been, or will have been prior to each Time of Delivery, obtained
under the Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Securities by the Underwriters;
(l) The statements set forth in the Prospectus under the captions
"Description of the Junior Subordinated Notes", "Description of the Preferred
Securities", "Description of the Preferred Securities Guarantee",
"Description of the Expense Agreement", and "Relationship Among the Preferred
Securities, Preferred Securities Guarantee, Expense Agreement and Junior
Subordinated Notes Held By the Trust", insofar as they purport to constitute
a summary of the terms of the Securities, and under the caption
"Underwriting", insofar as it purports to describe the provisions of the laws
and documents referred to therein, are accurate and complete in all material
respects;
(m) The issuance by the Company of the Guarantees and the Subordinated
Debentures, the compliance by the Company with all of the provisions of this
Agreement, any Pricing Agreement and each Over-allotment Option, if any, the
Guarantees, the Expense Agreements, the Subordinated Debentures, the Trust
Agreements and the Indenture, the execution, delivery and performance by the
Company of the Company Agreements, and the consummation of the transactions
contemplated herein and therein will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement, lease or other
material agreement or instrument to which it is a party or by which it or any
of its properties may be bound, except for such as individually or in the
aggregate would not have a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole, nor will such action result in
any violation of the provisions of the Restated Certificate of Incorporation
or By-Laws of the Company or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the Company
or any of its properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue of the Guarantees or the
Subordinated Debentures or the consummation by the Company of the other
transactions contemplated by this Agreement, any Pricing
7
<PAGE>
Agreement or the Company Agreements, except such as have been or will have
been, prior to each Time of Delivery, obtained under the Act or the Trust
Indenture Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the issuance by the Company of the Guarantees and the
Subordinated Debentures;
(n) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Trust, the Company or any of
its subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the Trust,
the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Trust, the
Company and its subsidiaries; and, to the best of the Trust's and the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(o) Neither the Company nor the Trust is and, after giving effect to the
offering and sale of the Securities, will not be, an "investment company", as
such term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(p) None of the Trust, the Company nor any of its subsidiaries, as
applicable, is in violation of the Trust Agreement for the Trust, the
Certificate of Trust for the Trust, the Restated Certificate of Incorporation
or By-Laws of the Company, or the charter or by-laws of any of its
subsidiaries, or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other material agreement or
instrument to which it is a party or by which it or any of its properties may
be bound, other than any such violation or default that would not have a
material adverse effect on the consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries taken as
a whole;
(q) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(r) The consolidated financial statements and financial statement
schedules of the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus fairly present in all material
respects the financial position of the Company and its consolidated
subsidiaries and the results of operations and changes in financial condition
and cash flows as of the dates and periods therein specified. Such financial
statements and financial statement schedules have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved (except as otherwise noted therein);
(s) Each of the Company and its subsidiaries, when necessary, is duly
licensed to conduct an insurance or a reinsurance business, as the case may
be, under the insurance
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statutes of each jurisdiction in which the conduct of its business requires
such licensing, except for such jurisdictions in which the failure of the
Company or any of its subsidiaries to be so licensed would not, individually
or in the aggregate, have a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole. The Company and each of its
subsidiaries have made all required filings under applicable insurance
holding company statutes in each jurisdiction where such filings are
required, except for such jurisdictions in which the failure to make such
filings would not, individually or in the aggregate, have a material adverse
effect on the consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries taken as a whole.
Each of the Company and its subsidiaries has all other necessary
authorizations, approvals, orders, consents, certificates, permits,
registrations and qualifications of and from all insurance regulatory
authorities necessary to conduct their respective businesses as described in
the Prospectus, except where the failure to have such authorizations,
approvals, orders, consents, certificates, permits, registrations or
qualifications would not, individually or in the aggregate, have a material
adverse effect on the consolidated financial position, stockholders' equity
or results of operations of the Company and its subsidiaries taken as a
whole, and neither the Company nor any of its subsidiaries has received any
notification from any insurance regulatory authority to the effect that any
additional authorization, approval, order, consent, certificate, permit,
registration and qualification needs to be obtained by either the Company or
any of its subsidiaries, in any case, where it could be reasonably expected
that (x) the Company or any of its subsidiaries would be required either to
obtain such additional authorization, approval, order, consent, certificate,
permit, registration or qualification or to cease or otherwise limit the
writing of certain business and (y) the failure to obtain such additional
authorization, approval, order, consent, certificate, permit, registration or
qualification or the limiting of the writing of such business would have a
material adverse effect on the consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries taken as
a whole; and no insurance regulatory authority having jurisdiction over the
Company or any of its subsidiaries has issued any order or decree impairing,
restricting or prohibiting the payment of dividends by or to the Company or
any of its subsidiaries except as set forth in the letter dated October 21,
1999 from the State of Delaware Department of Insurance to Everest
Reinsurance Company;
(t) The consolidated financial statements and financial statement
schedules of the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus fairly present in all material
respects the financial position of the Company and its consolidated
subsidiaries and the results of operations and changes in financial condition
and cash flows as of the dates and period therein specified. Such financial
statements and financial statement schedules have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved (except as otherwise noted therein);
(u) The statements set forth in the Prospectus as amended or supplemented
under the captions "Description of the Junior Subordinated Notes",
"Description of the Preferred Securities", "Description of the Preferred
Securities Guarantee", "Description of the
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Expense Agreement" and "Relationship Among the Preferred Securities,
Preferred Securities Guarantee, Expense Agreement and Junior Subordinated
Notes Held By the Trust", insofar as they constitute a summary of the terms
of the Securities, Subordinated Debentures, the Preferred Securities
Guarantee, the Expense Agreements and the Company Agreements (including the
Designated Securities, the Designated Subordinated Debentures, the Designated
Guarantee and the Designated Expense Agreement), and (x) in the Prospectus
under the caption "Plan of Distribution" and (y) in the Prospectus as amended
or supplemented under the caption "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to therein, in
each case are accurate, complete and fair;
(v) The Pricing Agreement with respect to the Designated Securities
(incorporating the provisions hereof) and this Agreement each have been duly
authorized, executed and delivered by the Company and the Trust;
(w) Each certificate signed by any officer of the Company or the Trust and
delivered to the Representatives or counsel for the Underwriters pursuant to
this Agreement shall be deemed to be a representation and warranty by the
Company or the Trust, as the case may be, and not by such officer in an
individual capacity, to each Underwriter as to the matters covered thereby;
and
(x) The Company and the Trust have reviewed their operations and, in the
case of the Company, that of its subsidiaries, and have made inquiries of any
third parties with which the Company, the Trust or any of their subsidiaries
have a material relationship to evaluate the extent to which the business or
operations of the Company, the Trust or any of their subsidiaries will be
affected by the Year 2000 Problem. As a result of such review and inquiries
to which responses have been received, and except as described in the
Prospectus, the Company and the Trust do not believe that the Year 2000
Problem will have a material adverse effect on the general affairs,
management, the current or future consolidated financial position, business
prospects, stockholders' equity or results of operations of the Company, the
Trust and their subsidiaries or result in any material loss or material
interference with the Company's or the Trust's business or operations. The
"Year 2000 Problem" as used herein means any significant risk that computer
hardware or software used in the receipt, transmission, processing,
manipulation, storage, retrieval, retransmission or other utilization of data
or in the operation of mechanical or electrical systems of any kind will not,
in the case of dates or time periods occurring after December 31, 1999,
function at least as effectively as in the case of dates or time periods
occurring prior to January 1, 2000.
3. Upon the execution of the Pricing Agreement applicable to any Designated
Securities and authorization by the Representatives of the release of the Firm
Designated Securities, the several Underwriters propose to offer the Firm
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
The Trust may specify in the Pricing Agreement applicable to any Designated
Securities that the Trust thereby grants to the Underwriters the right (an
"Over-allotment Option") to
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purchase at their election up to the number of Optional Designated Securities
set forth in such Pricing Agreement, on the terms set forth in the paragraph
above, for the sole purpose of covering over-allotments in the sale of the Firm
Designated Securities. Any such election to purchase Optional Designated
Securities may be exercised by written notice from the Representatives to the
Trust and the Company, given within a period specified in the Pricing Agreement,
setting forth the aggregate number of Optional Designated Securities to be
purchased and the date on which such Optional Designated Securities are to be
delivered, as determined by the Representatives but in no event earlier than the
First Time of Delivery (as defined in Section 4 hereof) or, unless the
Representatives, the Trust and the Company otherwise agree in writing, earlier
than or later than the respective number of business days after the date of such
notice set forth in such Pricing Agreement.
The number of Optional Designated Securities to be added to the number of
Designated Securities to be purchased by each Underwriter as set forth in
Schedule I to the Pricing Agreement applicable to such Designated Securities
shall be, in each case, the number of Optional Designated Securities which the
Trust and the Company have been advised by the Representatives have been
attributed to such Underwriter; provided, however, that, if the Trust and the
Company have not been so advised, the number of Optional Designated Securities
to be so added shall be, in each case, that proportion of Optional Designated
Securities which the number of Firm Designated Securities to be purchased by
such Underwriter under such Pricing Agreement bears to the aggregate number of
Firm Designated Securities (rounded as the Representatives may determine to the
nearest 100 securities). The total number of Designated Securities to be
purchased by all the Underwriters pursuant to such Pricing Agreement shall be
the aggregate number of Firm Designated Securities set forth in Schedule I to
such Pricing Agreement plus the aggregate number of Optional Designated
Securities which the Underwriters elect to purchase.
As compensation to the Underwriters of the Designated Securities for their
commitments hereunder and under the Pricing Agreement, and in view of the fact
that the proceeds of the sale of the Designated Securities will be used by the
Trust to purchase the Designated Subordinated Debentures of the Company, the
Company agrees to pay at each Time of Delivery to Goldman, Sachs & Co., for the
accounts of the several Underwriters, the amount set forth in the Pricing
Agreement per capital security for the Designated Securities to be delivered at
each Time of Delivery.
4. Certificates for the Firm Designated Securities and the Optional
Designated Securities to be purchased by each Underwriter pursuant to the
Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least 48 hours' prior notice to the
Trust and the Company, shall be delivered by or on behalf of the Trust to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer of
Federal (same day) Funds to an account designated by the Trust, (i) with respect
to the Firm Designated Securities, all in the manner and at the place and time
and date specified in such Pricing Agreement or at such other place and time and
date as the Representatives, the Trust and the Company may agree upon in
writing, such time and date being herein called the "First Time of Delivery" and
(ii) with respect
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<PAGE>
to the Optional Designated Securities, if any, in the manner and at the time and
date specified by the Representatives in the written notice given by the
Representatives of the Underwriters' election to purchase such Optional
Designated Securities, or at such other time and date as the Representatives,
the Trust and the Company may agree upon in writing, such time and date, if not
the First Time of Delivery, being herein called the "Second Time of Delivery".
Each such time and date for delivery is herein called a "Time of Delivery".
5. The Trust and the Company, jointly and severally, agree with each of the
Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended or supplemented in relation to
the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Act not later than the Commission's close of business on the second business
day following the execution and delivery of the Pricing Agreement relating to
the applicable Designated Securities or, if applicable, such earlier time as
may be required by Rule 424(b); to make no further amendment or any
supplement to the Registration Statement or Prospectus as amended or
supplemented after the date of the Pricing Agreement relating to such
Securities and prior to the Time of Delivery for such Securities which shall
be disapproved by the Representatives for such Securities promptly after
reasonable notice thereof; to advise the Representatives promptly of any such
amendment or supplement after such Time of Delivery for the Designated
Securities and furnish the Representatives with copies thereof; to file
promptly all reports and any definitive proxy or information statements
required to be filed by the Trust or the Company with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or sale
of the Designated Securities, and during such same period to advise the
Representatives, promptly after it receives notice thereof, of the time when
any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has
been filed with the Commission, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any prospectus
relating to the Securities, of the suspension of the qualification of the
Designated Securities or the Designated Subordinated Debentures for offering
or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such stop
order or of any such order preventing or suspending the use of any prospectus
relating to the Securities or suspending any such qualification, to promptly
use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the Representatives
may reasonably request to qualify such Designated Securities or the
Designated Subordinated Debentures for offering and sale under the securities
laws of such jurisdictions in the United States as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of such Designated Securities, provided that in
connection therewith neither the Trust nor the Company shall be required to
qualify
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<PAGE>
as a foreign corporation or as a dealer in securities or to file a general
consent to service of process in any jurisdiction or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise subject;
(c) Prior to 12:00 p.m., New York City time, on the New York Business Day
next succeeding the date of the Pricing Agreement for such Designated
Securities and from time to time thereafter, to furnish the Underwriters with
copies of the Prospectus as amended or supplemented in New York City in such
quantities as the Representatives may reasonably request, and, if the
delivery of a prospectus is required at any time prior to the expiration of
nine months after the time of issue of the Prospectus in connection with the
offering or sale of the Designated Securities or the Designated Subordinated
Debentures and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or,
if for any other reason it shall be necessary during such same period to
amend or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply with
the Act, the Exchange Act or the Trust Indenture Act, to notify the
Representatives and upon their request to file such document and to prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance;
(d) In the case of the Company, to make generally available to its
securityholders as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement, an
earnings statement (as defined in Rule 158(c) under the Act) of the Company
and its subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing Agreement for
such Designated Securities and continuing to and including the later of 180
days after the Time of Delivery for such Designated Securities, not to offer,
sell, contract to sell or otherwise dispose of, except as provided hereunder,
any Securities, any other beneficial interests in the assets of the Trust, or
any capital securities or any other securities of the Trust or the Company,
as the case may be, that are substantially similar to such Designated
Securities (including any guarantee of such securities) or any securities
that are convertible into or exchangeable for, or that represent the right to
receive, securities, capital securities or any such substantially similar
securities of the Trust or the Company without the prior written consent of
the Representatives;
(f) In the case of the Company, to issue the Guarantee concurrently with
the issue and sale of the Securities as contemplated herein or in the Pricing
Agreement; and
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(g) If the Trust and the Company elect to rely upon Rule 462(b), the Trust
and the Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C.
time, on the date of this Agreement, and the Trust and the Company shall at
the time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities, the Guarantees and the Subordinated Debentures
under the Act and all other out-of-pocket expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters and dealers; (ii)
the cost of printing or producing (excluding any related legal fees) any
Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Indenture, Company Agreement, the Securities and the Subordinated Debentures,
any Blue Sky and Legal Investment Memoranda, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities, the Guarantees and the Subordinated
Debentures for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the reasonable fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with the Blue Sky and Legal Investment Surveys; (iv) any fees charged by
securities rating services for rating the Securities and the Subordinated
Debentures; (v) any filing fees incident to, and the fees and disbursements of
counsel for the Underwriters in connection with, any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Securities and the issuance of the Guarantees and the Subordinated Debentures;
(vi) the cost of preparing the Securities and the Subordinated Debentures; (vii)
the fees and expenses of any Trustee, Indenture Trustee and Guarantee Trustee,
and any agent of any Trustee and the fees and disbursements of counsel for any
Trustee in connection with any Trust Agreement, Indenture, Guarantee and the
Securities; (viii) the cost of qualifying the Securities with The Depository
Trust Company; (ix) any fees and expenses in connection with listing the
Securities and the Subordinated Debentures and the cost of registering the
Securities under Section 12 of the Exchange Act; and (x) all other costs and
expenses incident to the performance of its obligations hereunder and under any
Over-allotment Options which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, transfer taxes on resale of
any of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters of any Designated Securities under the
Pricing Agreement relating to such Designated Securities shall be subject, in
the discretion of the Representatives, to the condition that all representations
and warranties and other statements of the Trust and the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of the Time of Delivery for such Designated
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<PAGE>
Securities, true and correct, the condition that the Trust and the Company shall
have performed all of their respective obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with
Section 5(a) hereof; if the Trust and the Company have elected to rely upon
Rule 462(b), the Rule 462(b) Registration Statement shall have become
effective by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with to the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such written opinion or opinions, dated the Time of Delivery
for such Designated Securities, with respect to the incorporation of the
Company, the validity of the Designated Subordinated Debentures and the
Designated Guarantee, the Registration Statement, the Prospectus as amended
or supplemented, as well as such other related matters as the Representatives
may reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Counsel for the Company satisfactory to the Representatives shall have
furnished to the Representatives their written opinion, dated each Time of
Delivery for such Designated Securities, respectively, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus as amended or supplemented;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus as amended or supplemented and all of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable; the Designated Securities
have been duly authorized by the Company as depositor on behalf of the
Trust; and the Designated Securities conform to the description of the
Securities contained in the Prospectus as amended or supplemented;
(iii) This Agreement and the Pricing Agreement with respect to the
Designated Securities have been duly authorized, executed and delivered by
the Trust and the Company;
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<PAGE>
(iv) The issuance by the Company of the Designated Guarantee and the
Designated Subordinated Debentures, the compliance by the Company with all
of the provisions of this Agreement and the Pricing Agreement and the
Company Agreements, the execution, delivery and performance by the Company
of the Company Agreements and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company is a
party or by which the Company is bound or to which any of the property or
assets of the Company is subject, (except for such conflicts, breaches or
violations which do not or would not have a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, nor will
such actions result in any violation of any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or
body having jurisdiction over the Trust or the Company or any of their
properties, except for such violations which, individually or in the
aggregate would not have a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries or the Trust, taken as a whole;
(v) The Designated Securities have been duly authorized, executed,
issued and delivered by the Trust and authenticated by the Trustee and
constitute valid and legally binding obligations of the Trust and the
Company entitled to the benefits provided by the Trust Agreement; and the
Designated Securities and the Trust Agreement conform in all material
respects to the descriptions thereof in the Prospectus as amended or
supplemented;
(vi) The Trust Agreement has been duly authorized, executed and
delivered by the Trust and constitutes a valid and legally binding
instrument of the Trust, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Trust Agreement has been
duly qualified under the Trust Indenture Act;
(vii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Designated Securities being
delivered at such Time of Delivery or the issuance of the Designated
Guarantee and the Designated Subordinated Debentures or the consummation
by the Trust or the Company of the transactions contemplated by this
Agreement or such Pricing Agreement and the Company Agreements, except
such as have been obtained under the Act and the Trust Indenture Act and
such consents, approvals, authorizations, orders, registrations or
qualifications as may be required under state securities or Blue Sky laws
and state insurance laws in connection with the purchase and distribution
of the Designated Securities by the Underwriters or the
16
<PAGE>
issuance of the Designated Guarantee and Designated Subordinated
Debentures by the Company;
(viii) The statements set forth in the Prospectus under the caption
"Underwriting", insofar as it purports to describe the provisions of the
laws and documents referred to therein, are accurate and complete in all
material respects;
(ix) Neither the Company nor the Trust is an "investment company", as
such term is defined in the Investment Company Act;
(x) The Registration Statement and the Prospectus as amended or
supplemented and any further amendments and supplements thereto made by
the Company prior to the Time of Delivery for the Designated Securities
(other than the financial statements and related schedules and other
financial data included therein or omitted therefrom, as to which such
counsel need express no opinion) comply, as to form in all material
respects with the requirements of the Act and the Trust Indenture Act and
the rules and regulations thereunder;
(xi) The Designated Subordinated Debentures are in the form prescribed
in or pursuant to the Indenture, have been duly and validly authorized by
the Company by all necessary corporate action and, when completed,
executed and authenticated as specified in or pursuant to the Indenture
and issued and delivered, will be valid and binding obligations of the
Company, enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles;
(xii) The Company Agreements have each been duly authorized, executed
and delivered by the parties thereto and constitute valid and legally
binding instruments, enforceable in accordance with their respective
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Indenture, the Designated Guarantee and the Trust Agreement have been duly
qualified under the Trust Indenture Act;
(xiii) The issuance by the Company of the Guarantee and the
Subordinated Debentures, the compliance by the Company with all of the
provisions of this Agreement and the Pricing Agreement and the Company
Agreements, the execution, delivery and performance by the Company of the
Company Agreements and the consummation of the transactions herein and
therein contemplated will not result in any violation of the provisions of
the Company's Certificate of Incorporation or By-Laws; and
(xiv) Such counsel shall also state that the Registration Statement and
the Prospectus as amended or supplemented, and any further amendments and
supplements thereto made by the Trust or the Company prior to such Time of
Delivery
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<PAGE>
(other than the financial statements and related schedules therein, as to
which such counsel need express no opinion), comply as to form in all
material respects with the requirements of the Act and the Trust Indenture
Act and the rules and regulations thereunder; although they do not assume
any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
except for those referred to in the opinion in subsection (v) of this
Section 7(c), no facts have come to their attention that would cause them
to believe that, as of its effective date, the Registration Statement or
any further amendment thereto made by the Trust or the Company prior to
the Time of Delivery (other than the financial statements and related
schedules and other financial data included therein or omitted therefrom,
as to which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or that, as of its date, the Prospectus as amended or
supplemented or any further amendment or supplement thereto made by the
Trust or the Company prior to the Time of Delivery (other than the
financial statements and related schedules and other financial data
included therein or omitted therefrom, as to which such counsel need
express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading or that, as of the Time of Delivery, either the Registration
Statement or the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Trust or the Company prior to
the Time of Delivery (other than the financial statements and related
schedules and other financial data included therein or omitted therefrom,
as to which such counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and they do not know of any
amendment to the Registration Statement required to be filed or any
contracts or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be incorporated by
reference into the Prospectus as amended or supplemented or required to be
described in the Registration Statement or the Prospectus as amended or
supplemented which are not filed or incorporated by reference or described
as required;
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and of public officials. Such opinions shall be
limited to the federal laws of the United States, the laws of New York State
and the General Corporation Law of the State of Delaware. The parties
acknowledge that, in rendering such opinions, such counsel is not rendering
any opinion with respect to the insurance laws or regulations or state
securities laws of any state.
References to the Registration Statement and the Prospectus in this
paragraph (c) shall include any amendment or supplement thereto at the date
of such opinion.
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(d) Special Delaware counsel to the Trust and the Company satisfactory to
the Representatives shall have furnished to the Representatives, the Company
and the Trust their written opinion, dated the respective Time of Delivery,
in form and substance satisfactory to the Representatives, to the effect that
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, and
all filings required under the laws of the State of Delaware with respect
to the creation and valid existence of the Trust as a business trust have
been made;
(ii) Under the Delaware Business Trust Act and the Trust Agreement, the
Trust has the power and authority to own property and conduct its
business, all as described in the Prospectus;
(iii) The Trust Agreement constitutes a valid and binding obligation of
the Company and the Trustees, enforceable against the Company and the
Trustees, in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, receivership, liquidation, fraudulent conveyance,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights, to
general equity principles, including applicable law relating to fiduciary
duties (regardless of whether considered and applied in a proceeding in
equity or at law), and to the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution;
(iv) Under the Delaware Business Trust Act and the Trust Agreement, the
Trust has the requisite trust power and authority to (a) execute, deliver
and perform its obligations under this Agreement and the Pricing Agreement
and (b) issue and perform its obligations under the Designated Securities
and the Common Securities of the Designated Trust;
(v) Under the Delaware Business Trust Act and the Trust Agreement, the
execution and delivery by the Trust of this Agreement and the Pricing
Agreement, and the performance by the Trust of its obligations hereunder
and thereunder, have been duly authorized by the requisite trust action on
the part of the Trust;
(vi) The Designated Securities have been duly authorized by the Trust
Agreement and are duly and validly issued and, subject to the
qualifications set forth herein, fully paid and non-assessable beneficial
interests in the Trust and are entitled to the benefits provided by the
Trust Agreement; the Securityholders, 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; provided that such
counsel may note that the Securityholders may be obligated, pursuant to
the Trust Agreement, to (a) provide indemnity and/or security in
connection with and pay taxes or governmental charges arising from
transfers or exchanges of Securities Certificates and the issuance of
replacement Securities Certificates and (b) provide security and indemnity
in
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connection with requests of or directions to the Property Trustee (as
defined in the Trust Agreement) to exercise its rights and remedies under
the Trust Agreement;
(vii) The Common Securities of the Trust have been duly authorized by
the Trust Agreement and are validly issued and represent beneficial
interests in the Trust;
(viii) Under the Delaware Business Trust Act and the Trust Agreement,
the issuance of the Designated Securities and the Common Securities of the
Trust is not subject to preemptive rights;
(ix) The issuance and sale by the Trust of Designated Securities and
the Common Securities of the Trust, the execution, delivery and
performance by the Trust of this Agreement and the Pricing Agreement, the
consummation by the Trust of the transactions contemplated thereby and
compliance by the Trust with its obligations thereunder will not violate
(a) any of the provisions of the Certificate of Trust of the Trust or the
Trust Agreement, or (b) any applicable Delaware law or administrative
regulation;
(x) Assuming that the Trust derives no income from or connected with
sources within the State of Delaware and has no assets, activities (other
than maintaining the Delaware Trustee and the filing of documents with the
Secretary of State of the State of Delaware) or employees in the State of
Delaware, no authorization, approval, consent or order of any Delaware
court or governmental authority or agency is required to be obtained by
the Trust solely in connection with the issuance and sale of the
Designated Securities and the Common Securities of the Trust. (In
rendering the opinion expressed in this paragraph (x), such counsel need
express no opinion concerning the securities laws of the State of
Delaware.);
(xi) Assuming that the Trust derives no income from or connected with
sources within the State of Delaware and has no assets, activities (other
than maintaining the Delaware Trustee and the filing of documents with the
Secretary of State of the State of Delaware) or employees in the State of
Delaware, the Securityholders (other than those holders of the Securities
who reside or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware solely as a
result of their participation in the Trust, and the Trust will not be
liable for any income tax imposed by the State of Delaware; and
(xii) Assuming that the Trust derives no income from or connected with
sources within the State of Delaware and has no assets, activities (other
than maintaining the Delaware Trustee and the filing of documents with the
Secretary of State of the State of Delaware) or employees in the State of
Delaware, there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees of the Designated Trust on behalf of the
Designated Trust) under the laws of the State of Delaware or any political
subdivision thereof in connection with the execution, delivery and
performance by either Trustee of the Trust of the Trust Agreement;
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(e) Janet Burak, General Counsel for the Company, shall have furnished to
you a written opinion, dated such Time of Delivery, in form and substance
reasonably satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware;
(ii) The Company and each of its subsidiaries, where necessary, is duly
licensed to conduct an insurance or a reinsurance business, as the case
may be, under the insurance statutes of each jurisdiction in which the
conduct of its business requires such licensing, except for such
jurisdictions in which the failure of the Company or any of its
subsidiaries to be so licensed would not, individually or in the
aggregate, have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole. The Company and its subsidiaries have
made all required filings under applicable insurance holding company
statutes in each jurisdiction where such filings are required, except for
such jurisdictions in which the failure to make such filings would not,
individually or in the aggregate, have a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole. Each of
the Company and its subsidiaries has all other necessary authorizations,
approvals, orders, consents, certificates, permits, registrations and
qualifications of and from all insurance regulatory authorities necessary
to conduct their respective businesses as described in the Prospectus,
except where the failure to have such authorizations, approvals, orders,
consents, certificates, permits, registrations or qualifications would
not, individually or in the aggregate, have a material adverse effect on
the consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, and
neither the Company nor any of its subsidiaries has received any
notification from any insurance regulatory authority to the effect that
any additional authorization, approval, order, consent, certificate,
permit, registration or qualification is needed to be obtained by either
the Company or any of its subsidiaries, in any case where it could be
reasonably expected that (x) the Company or any of its subsidiaries would
be required either to obtain such additional authorization, approval,
order, consent, certificate, permit, registration or qualification or to
cease or otherwise limit the writing of certain business and (y) the
failure to obtain such additional authorization, approval, order, consent,
certificate, permit, registration or qualification or the limiting of the
writing of such business would have a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole; and no
insurance regulatory authority having jurisdiction over the Company or any
of its subsidiaries has issued any order or decree impairing, restricting
or prohibiting the payment of dividends by or to the Company or any of its
subsidiaries except as set forth in the letter dated October 21, 1999 from
the State of Delaware Department of Insurance to Everest Reinsurance
Company;
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(iii) The Company has the corporate power to own or lease its
respective properties and conduct its business as described in the
Registration Statement and the Prospectus;
(iv) The issued and outstanding shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and non-
assessable and are owned by its holders, free and clear of any adverse
claims;
(v) Other than as set forth in the Prospectus or the Registration
Statement, there are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole; and, to
the best knowledge of such counsel, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others and other
than as set forth in the Prospectus or the Registration Statement, there
are no legal or governmental proceedings pending to which the Trust is a
party or of which any property of the Trust is the subject which, if
determined adversely to the Trust, would individually or in the aggregate
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Trust; and, to the
best knowledge of such counsel, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vi) Such counsel does not know of any contract or document of a
character required to be described or summarized in the Registration
Statement or to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration Statement or
the Prospectus as amended or supplemented which is not so filed,
incorporated by reference or described;
(vii) The issuance by the Company of the Designated Guarantee and the
Designated Subordinated Debentures, the compliance by the Company with all
of the provisions of the Designated Securities, this Agreement, the
Pricing Agreement and the Company Agreements and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, (A) any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property of the Company or any of its subsidiaries is subject, or any
statute or any rule, regulation or order known to such counsel of any
court or governmental agency or body having jurisdiction over any of its
subsidiaries or any of their properties (except for such conflicts,
breaches, violations or defaults which do not or would not, individually
or in the aggregate have a material adverse effect on the consolidated
financial position,
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stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole), or (B) any provision of the charter or by-
laws of the Company or any of its subsidiaries;
(viii) No consent, approval, authorization or order of, or
registration, qualification or filing with, any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties is required for the
issue and sale of the Designated Securities or the issuance of the
Designated Guarantee and the Designated Subordinated Debentures or the
consummation by the Trust and the Company of the transactions contemplated
by this Agreement or such Pricing Agreement or the Company Agreements,
except such as have been obtained under the Act and the Trust Indenture
Act and such consents, approvals, authorizations, orders, registrations,
qualifications or filings under state or foreign insurance laws in
connection with the purchase and distribution of the Designated Securities
by the Underwriters or the issuance of the Designated Guarantee and
Designated Subordinated Debentures by the Company;
(ix) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and related
schedules and other financial data included therein or omitted therefrom,
as to which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may be, complied
as to form in all material respects with the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and such counsel has no reason to believe that any
of such documents, when they became effective or were so filed, as the
case may be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or, in the case
of other documents which were filed under the Act or the Exchange Act with
the Commission, an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such documents
were so filed, not misleading;
(x) Neither the Company nor any of its subsidiaries is (i) in violation
of its respective charter or by-laws or (ii) to the knowledge of such
counsel, in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other material agreement
or instrument to which it is a party or by which it or any of its
properties may be bound or affected, except, in the case of clause (ii),
for such as, individually or in the aggregate, would not have a material
adverse effect on the consolidated financial position, stockholders'
equity or result of operations of the Company and its subsidiaries taken
as a whole; the Trust is not in violation of (i) its Trust Agreement or
(ii) to the knowledge of such counsel in default in the performance or
observation of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
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or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound or affected, except, in the case of
clause (ii), for such as, individually or in the aggregate, would not have
a material adverse effect on the consolidated financial position,
stockholders' equity or result of operations of the Trust; and
(xi) The Statements set forth under the headings "Description of the
Junior Subordinated Notes", "Description of the Preferred Securities",
"Description of the Preferred Securities Guarantee", "Description of the
Expense Agreement" and "Relationship Among the Preferred Securities,
Preferred Securities Guarantee, Expense Agreement and Junior Subordinated
Notes Held By the Trust", insofar as they constitute a summary of the
terms of the Securities, Subordinated Debentures, the Guarantees, the
Expense Agreements and the Company Agreements (including the Designated
Securities, the Designated Subordinated Debentures, the Designated
Guarantee and the Designated Expense Agreement), and (x) in the Prospectus
under the caption "Plan of Distribution" and (y) in the Prospectus as
amended or supplemented under the caption "Underwriting", insofar as such
statements constitute a summary of the legal matters, documents or
proceedings referred to therein, provide a fair summary of such legal
matters, documents and proceedings.
In rendering such opinion, such counsel may rely, as to matters of fact,
to the extent such counsel deems proper, on certificates or responsible
officers of the Company and its subsidiaries and of public officials and, as
to matters involving the application of the General Corporation Law of the
State of Delaware, upon the opinions of the Company counsel referred to in
Sections 7(c) and (d). Such opinions shall be limited to the federal laws of
the United States and the laws of the State of New Jersey and the general
corporate and insurance laws of the State of Delaware;
(f) Tax counsel for the Trust and the Company satisfactory to the
Representatives shall have furnished to the Representatives their written
opinion, dated the respective Time of Delivery, in form and substance
satisfactory to the Representatives, to the effect that such firm confirms
its opinion set forth in the Prospectus under the caption "Material United
States Federal Income Tax Consequences";
(g) On the date of the Pricing Agreement for such Designated Securities at
a time prior to the execution of the Pricing Agreement with respect to the
Designated Securities and at each Time of Delivery for such Designated
Securities, PricewaterhouseCoopers LLP, who have certified the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement, shall have furnished to the
Representatives a letter, dated the effective date of the Registration
Statement or the date of the most recent report filed with the Commission
containing financial statements and incorporated by reference in the
Registration Statement, if the date of such report is later than such
effective date, and a letter dated such Time of Delivery, respectively, to
the effect set forth in Annex II hereto, and with respect to such letter
dated such Time of Delivery, as to such other matters as the Representatives
may reasonably request and in form and substance satisfactory to the
Representatives;
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(h) None of the Trust, the Company or any of the Company's subsidiaries
shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as amended
or supplemented prior to the date of the Pricing Agreement relating to the
Designated Securities any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as amended or
supplemented prior to the date of the Pricing Agreement relating to the
Designated Securities, and (ii) since the respective dates as of which
information is given in the Prospectus as amended or supplemented prior to
the date of the Pricing Agreement relating to the Designated Securities there
shall not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations
of the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented prior to the date
of the Pricing Agreement relating to the Designated Securities, the effect of
which, in any such case described in clause (i) or (ii), is in the judgment
of the Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Firm
Designated Securities or Optional Designated Securities or both on the terms
and in the manner contemplated in the Prospectus as amended or supplemented
relating to the Designated Securities;
(i) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities or preferred stock or the Company's
financial strength or claims paying ability by any "nationally recognized
statistical rating organization", as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities or preferred stock or the Company's financial strength or claims
paying ability, the effect of which, in any such case described in clause (i)
or (ii), is in the judgment of the Representatives so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering
or the delivery of the Designated Securities on the terms and in the manner
contemplated in the Prospectus as amended or supplemented relating to the
Designated Securities;
(j) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following: (i)
a suspension or material limitation in trading in securities generally on the
New York Stock Exchange; (ii) a suspension or material limitation in trading
in the Company's securities on the New York Stock Exchange (other than in
connection with the proposed restructuring of the Company as described in the
Prospectus as amended or supplemented) (iii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities; or (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the
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United States of a national emergency or war, if the effect of any such event
specified in this Clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Firm Designated Securities or Optional Designated Securities
or both on the terms and in the manner contemplated in the Prospectus as
amended or supplemented relating to the Designated Securities;
(k) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of the Pricing Agreement for such
Designated Securities or some other day as agreed by the Company and the
Underwriters; and
(l) The Designated Trust and the Company shall have furnished or caused to
be furnished to the Representatives at each Time of Delivery for the
Designated Securities a certificate or certificates of officers of the
Designated Trust and the Company reasonably satisfactory to the
Representatives as to the accuracy of the representations and warranties of
the Designated Trust and the Company herein at and as of such Time of
Delivery, as to the performance by the Designated Trust and the Company of
all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (j) of this
Section and as to such other matters as the Representatives may reasonably
request.
8. (a) The Designated Trust and the Company, jointly and severally, will
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Designated Securities, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that neither the Designated Trust nor the Company
shall be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Designated Trust and the
Company by any Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to such
Securities; and provided, further, that the Company shall not be liable to any
Underwriter under the indemnity agreement in this subsection (a) with respect to
any Preliminary Prospectus (as supplemented by a preliminary prospectus
supplement filed with the Commission) to the extent that any such loss, claim,
damage or
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liability of such Underwriter results from the fact that such Underwriter sold
Securities to a person as to whom it shall be established that there was not
sent or given, at or prior to the written confirmation of such sale, a copy of
the Prospectus (excluding documents incorporated by reference) or of the
Prospectus as then amended or supplemented (excluding documents incorporated by
reference) in any case where such delivery is required by the Act if the Company
has previously furnished copies thereof in sufficient quantity to such
Underwriter and the loss, claim, damage or liability of such Underwriter results
from an untrue statement or omission of a material fact contained in the
Preliminary Prospectus (as so supplemented) which was (i) identified in writing
to such Underwriter at or prior to the earlier of the filing with the Commission
or the furnishing to such Underwriter of the Prospectus and (ii) corrected in
the Prospectus (excluding documents incorporated by reference) or in the
Prospectus as then amended or supplemented (excluding documents incorporated by
reference).
(b) Each Underwriter will indemnify and hold harmless the Designated Trust
and the Company against any losses, claims, damages or liabilities to which the
Designated Trust may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Designated Securities, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Designated Trust and
the Company by such Underwriter through the Representatives expressly for use
therein; and will reimburse the Designated Trust and the Company for any legal
or other expenses reasonably incurred by the Designated Trust in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such
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subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party. No
indemnified party shall, without the written consent of the indemnifying party
(such written consent not to be unreasonably withheld), effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending action or claim in respect of which indemnification or contribution is
sought hereunder if the indemnifying party has assumed the defense of such
action or claim.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Designated Trust and the Company on the one hand and the Underwriters of
the Designated Securities on the other from the offering of the Designated
Securities to which such loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Designated Trust and the
Company on the one hand and the Underwriters of the Designated Securities on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Designated Trust and the Company on the one hand and such Underwriters on
the other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Designated Trust
and the Company bear to the total underwriting discounts and commissions
received by such Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Designated Trust and the Company on the
one hand or such Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Designated Trust, the Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount
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paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection
(d), no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters of Designated Securities in this subsection (d)
to contribute are several in proportion to their respective underwriting
obligations with respect to such Securities and not joint.
(e) The obligations of the Designated Trust and the Company under this
Section 8 shall be in addition to any liability which the Designated Trust and
the Company may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section 8
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Designated Trust and the Company and to each person,
if any, who controls the Designated Trust and the Company within the meaning of
the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Firm Designated Securities or Optional Designated Securities which it has agreed
to purchase under the Pricing Agreement relating to such Designated Securities,
the Representatives may in their discretion arrange for themselves or another
party or other parties to purchase such Designated Securities on the terms
contained herein. If within thirty-six hours after such default by any
Underwriter the Representatives do not arrange for the purchase of such Firm
Designated Securities or Optional Designated Securities, as the case may be,
then the Designated Trust shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties reasonably
satisfactory to the Representatives to purchase such Designated Securities on
such terms. In the event that, within the respective prescribed period, the
Representatives notify the Designated Trust that they have so arranged for the
purchase of such Designated Securities, or the Designated Trust notifies the
Representatives that it has so arranged for the purchase of such Designated
Securities, the Representatives or the Designated Trust shall have the right to
postpone the Time of Delivery for such Designated Securities for a period of not
more than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Designated
Trust agrees to file promptly any amendments or supplements to the Registration
Statement or the Prospectus which in the opinion of the Representatives may
thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to the Pricing Agreement with respect to
such Designated Securities.
29
<PAGE>
(b) If, after giving effect to any arrangements for the purchase of the Firm
Designated Securities or Optional Designated Securities, as the case may be, of
a defaulting Underwriter or Underwriters by the Representatives and the
Designated Trust as provided in subsection (a) above, the aggregate principal
amount of such Designated Securities which remains unpurchased does not exceed
one-eleventh of the aggregate principal amount of the Firm Designated Securities
or Optional Designated Securities, as the case may be, to be purchased at the
respective Time of Delivery, then the Designated Trust shall have the right to
require each non-defaulting Underwriter to purchase the principal amount of Firm
Designated Securities or Optional Designated Securities, as the case may be,
which such Underwriter agreed to purchase under the Pricing Agreement relating
to such Designated Securities and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the principal amount of
Firm Designated Securities or Optional Designated Securities, as the case may
be, which such Underwriter agreed to purchase under such Pricing Agreement) of
the Firm Designated Securities or Optional Designated Securities, as the case
may be, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Firm
Designated Securities or Optional Designated Securities, as the case may be, of
a defaulting Underwriter or Underwriters by the Representatives and the
Designated Trust as provided in subsection (a) above, the aggregate principal
amount of Firm Designated Securities or Optional Designated Securities, as the
case may be, which remains unpurchased exceeds one-eleventh of the aggregate
principal amount of the Firm Designated Securities or Optional Designated
Securities, as the case may be, to be purchased at the respective Time of
Delivery, as referred to in subsection (b) above, or if the Designated Trust
shall not exercise the right described in subsection (b) above to require non-
defaulting Underwriters to purchase Firm Designated Securities or Optional
Designated Securities, as the case may be, of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Firm Designated
Securities or the Over-allotment Option relating to such Optional Designated
Securities, as the case may be, shall thereupon terminate, without liability on
the part of any non-defaulting Underwriter or the Designated Trust or the
Company, except for the expenses to be borne by the Designated Trust and the
Company and the Underwriters as provided in Section 6 hereof and the indemnity
and contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Designated Trust or the Company and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Designated Trust or the Company, or any officer or director
or controlling person of the Designated Trust or the Company, and shall survive
delivery of and payment for the Securities.
30
<PAGE>
11. If any Pricing Agreement or Over-allotment Option shall be terminated
pursuant to Section 9 hereof, neither the Designated Trust nor the Company shall
then be under any liability to any Underwriter with respect to the Firm
Designated Securities or Optional Designated Securities with respect to which
such Pricing Agreement shall have been terminated except as provided in Sections
6 and 8 hereof; but, if for any other reason Designated Securities are not
delivered by or on behalf of the Designated Trust or the Company as provided
herein, the Company will reimburse the Underwriters through the Representatives
for all out-of-pocket expenses approved in writing by the Representatives,
including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of such
Designated Securities, but the Designated Trust or the Company shall then be
under no further liability to any Underwriter with respect to such Designated
Securities except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail,
overnight courier, telex or facsimile transmission to the address of the
Representatives as set forth in the Pricing Agreement; and if to the Designated
Trust or the Company shall be delivered or sent by mail, overnight courier,
telex or facsimile transmission to the address of the Designated Trust or the
Company, respectively, set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Designated Trust and the Company by the Representatives upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, each Designated Trust, the
Company and, to the extent provided in Sections 8 and 10 hereof, the officers
and directors of each Designated Trust, the Company and each person who controls
any Designated Trust or the Company or any Underwriter, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or any such
Pricing Agreement. No purchaser of any of the Securities from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used herein,
"business day" shall mean any day when the Commission's office in Washington,
D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
31
<PAGE>
16. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
32
<PAGE>
Very truly yours,
EVEREST REINSURANCE HOLDINGS, INC.
By: _______________________
Name:
Title:
EVEREST RE CAPITAL TRUST
By: Everest Reinsurance Holdings, Inc.
as Depositor
By: ________________________
Name:
Title:
<PAGE>
ANNEX I
Pricing Agreement
-----------------
Goldman, Sachs & Co.,
[Names of Co. Representative(s)]
As Representatives of the several
Underwriters named in Schedule I hereto,
[c/o Goldman, Sachs & Co.,]
85 Broad Street,
New York, New York 10004.
______ ___, 2000
Ladies and Gentlemen:
Everest Re Capital Trust, a statutory business trust formed under the laws of
the State of Delaware (the "Trust") and Everest Reinsurance Holdings, Inc., a
Delaware corporation (the "Company"), propose, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated
......................, 1999 (the "Underwriting Agreement") to issue and sell to
the Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities" consisting of Firm
Designated Securities and any Optional Designated Securities the Underwriters
may elect to purchase). The principal asset of the Trust consists of debt
securities of the Company (the "Subordinated Debentures"), as specified in
Schedule II to this Agreement. The Designated Securities will be guaranteed by
the Company to the extent set forth in this Agreement with respect to such
Designated Securities (the "Guarantee"). Each of the provisions of the
Underwriting Agreement is incorporated herein by reference in its entirety, and
shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein; and each of the representations
and warranties set forth therein shall be deemed to have been made at and as of
the date of this Pricing Agreement, except that each representation and warranty
which refers to the Prospectus in Section 2 of the Underwriting Agreement shall
be deemed to be a representation or warranty as of the date of the Underwriting
Agreement in relation to the Prospectus (as therein defined), and also a
representation and warranty as of the date of this Pricing Agreement in relation
to the Prospectus as amended or supplemented relating to the Designated
Securities which are the subject of this Pricing Agreement. Each reference to
the Representatives herein and in the provisions of the Underwriting Agreement
so incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used herein as
therein defined. The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Securities pursuant to Section 12 of the Underwriting Agreement and the address
of the Representatives referred to in such Section 12 are set forth at the end
of Schedule II hereto.
<PAGE>
An amendment to the Registration Statement or a supplement to the Prospectus,
as the case may be, relating to the Designated Securities, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the Underwriting
Agreement incorporated herein by reference, (a) the Designated Trust agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Designated Trust, at the time
and place and at the purchase price to the Underwriters set forth in Schedule II
hereto, the number of Firm Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto and, (b) in the event and to the extent
that the Underwriters shall exercise the election to purchase Optional
Designated Securities, as provided below, the Designated Trust agrees to issue
and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Designated Trust at the purchase
price to the Underwriters set forth in Schedule II hereto that portion of the
number of Optional Designated Securities as to which such election shall have
been exercised.
The Designated Trust hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Designated Securities
set forth opposite the name of such Underwriter in Schedule I hereto on the
terms referred to in the paragraph above for the sole purpose of covering over-
allotments in the sale of the Firm Designated Securities. Any such election to
purchase Optional Designated Securities may be exercised by written notice from
the Representatives to the Designated Trust and the Company given within a
period of 30 calendar days after the date of this Pricing Agreement, setting
forth the aggregate number of Optional Designated Securities to be purchased and
the date on which such Optional Designated Securities are to be delivered, as
determined by the Representatives, but in no event earlier than the First Time
of Delivery or, unless the Representatives and the Designated Trust otherwise
agree in writing, no earlier than two or later than ten business days after the
date of such notice.
If the foregoing is in accordance with your understanding, please sign and
return to us [one for the Company and each of the Representatives plus one for
each counsel] counterparts hereof, and upon acceptance hereof by you, on behalf
of each of the Underwriters, this letter and such acceptance hereof, including
the provisions of the Underwriting Agreement incorporated herein by reference,
shall constitute a binding agreement between each of the Underwriters and the
Designated Trust and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Designated Trust and the Company for examination upon
request, but without warranty on the part of the Representatives as to the
authority of the signers thereof.
2
<PAGE>
Very truly yours,
EVEREST REINSURANCE HOLDINGS, INC.
By: __________________________________
Name:
Title:
EVEREST RE CAPITAL TRUST
By: Everest Reinsurance Holdings, Inc.
as Depositor
By: __________________________________
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
[Names of Co-Representative Corporations]
By:__________________________________
Name:
Title:
______________________________________
[Names of Co-Representative Partnership(s)]
On behalf of each of the Underwriters
3
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Maximum
Principal
Principal Amount of
Amount of Optional
Firm Designated
Designated Securities Which
Securities May be
Underwriter to be Purchased Purchased
- ----------- --------------- ----------------
<S> <C> <C>
$ $
[Names of Representatives]........
[Names of Co-Representative(s)]...
[Names of other Underwriters].....
Total.............................. $ $
</TABLE>
I-1
<PAGE>
SCHEDULE II
Designated Trust:
Everest Re Capital Trust
Title of Designated Securities:
[ %] [Floating Rate] Preferred Securities
Liquidation Amount of the Designated Securities:
$ _______ per Designated Security
Aggregate principal amount:
Aggregate liquidation amount of Designated
Securities to be sold: $ ____________
Price to Public:
___% of the liquidation amount of the Designated Securities
Purchase Price by Underwriters:
___% of the liquidation amount of the Designated Securities
Underwriters' Compensation:
As compensation to the Underwriters for their commitments hereunder, and in
view of the fact that the proceeds of the sale of the Designated Securities
will be used by the Designated Trust to purchase the Subordinated
Debentures of the Company, the Company hereby agrees to pay at each Time of
Delivery to [the Designated Representative], for the accounts of the
several Underwriters, an amount equal to $ per preferred
security for the Designated Securities to be delivered at each Time of
Delivery ($ in the aggregate).
Definitive form to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of [The
Depository Trust Company or its designated custodian] [the
Representatives]] Book entry only form represented by one or more global
securities deposited with The Depository Trust Company ("DTC") or its
designated custodian, to be made available for checking by the
Representatives at least twenty-four hours prior to the Time of Delivery at
the office of DTC.]
II-1
<PAGE>
Specified funds for payment of purchase price:
Federal (same day) Funds
Accountants' Letter to be delivered on date of Pricing Agreement:
Yes
Trust Agreement:
Amended and Restated Trust Agreement dated as of ________, ____, between
the Company, as Depositor, The Chase Manhattan Bank, as Property Trustee,
The Chase Manhattan Bank (Delaware), as Delaware Trustee, and the several
Holders of Trust Securities
Indenture:
Indenture dated as of _______, ____, between the Company and The Chase
Manhattan Bank, as Indenture Trustee (the "Indenture")
Guarantee:
Guarantee Agreement dated as of ________, ____, between Company and The
Chase Manhattan Bank, as Guarantee Trustee
Expense Agreement
Agreement as to Expenses and Liabilities, dated as of _______, ____ between
the Company and the Designated Trust
Subordinated Debentures:
[ %] [Floating Rate] Junior Subordinated Debentures.
Maturity:
_________, ____ [(subject to shortening such maturity to a date not earlier
than ______, ___)]
Interest Rate:
Interest Payment Dates:
II-2
<PAGE>
[Months and dates, commencing .................., 2000]
Extension Period:
Redemption Provisions:
[The redemption provisions set forth in Section ___ of the Trust Agreement
shall apply to the Designated Securities]
Sinking Fund Provisions:
No sinking fund provisions
Exchange for Designated Securities:
[The Subordinated Debentures may be delivered in exchange for the
Designated Securities as provided in the Prospectus Supplement]
Listing of Designated Securities:
[New York Stock Exchange][None]
Time of Delivery:
____ a.m., New York City time
_______, ____
Closing Location:
Names and addresses of Representatives:
[Names of Representatives]
[Address for Notices]
II-3
<PAGE>
[Other Terms]*:
- --------------------------
* A description of particular tax, accounting or other unusual features (such
as the addition of event risk provisions) of the Designated Securities
should be set forth, or referenced to an attached and accompanying
description, if necessary, to ensure agreement as to the terms of the
Designated Securities to be purchased and sold. Such a description might
appropriately be in the form in which such features will be described in
the Prospectus Supplement for the offering.
II-4
<PAGE>
ANNEX II
Pursuant to Section 7(g) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Designated Trust and the Company and its subsidiaries within the meaning of
the Act and the applicable published rules and regulations adopted by the
Commission thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, pro forma
financial information) examined by them and included or incorporated by
reference in the Registration Statement or the Prospectus comply as to form
in all material respects with the applicable accounting requirements of the
Act or the Exchange Act, as applicable, and the related rules and
regulations; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public
Accountants of the consolidated interim financial statements, selected
financial data, pro forma financial information and/or condensed financial
statements derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports thereon,
copies of which have been furnished to the representatives of the
Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly reports on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which [have been separately furnished to the Representatives] [are
attached to such letters]; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and
regulations, nothing came to their attention that caused them to believe
that the unaudited condensed consolidated financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and
regulations adopted by the Commission;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
<PAGE>
consolidated financial statements for five such fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the published rules and regulations adopted by
the Commission, or (ii) any material modifications should be made to
the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the Prospectus for
them to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and
2
<PAGE>
balance sheet items included in the Prospectus and referred to in
clause (B) were not determined on a basis substantially consistent
with the basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on Form 10-K
for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the rules and regulations
adopted by the Commission thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the compilation
of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders' equity or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in clause (E) there were any decreases
in consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified by
the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are derived
from the general accounting records of the Company and its subsidiaries,
which appear in the Prospectus (excluding documents incorporated by
reference), or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives
3
<PAGE>
or in documents incorporated by reference in the Prospectus specified by
the Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.
4
<PAGE>
EXHIBIT 4.1
S&C Draft of October 13, 1999
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
EVEREST REINSURANCE HOLDINGS, INC.
TO
THE CHASE MANHATTAN BANK
Trustee
--------------
Indenture
Dated as of ________ __, 1999
--------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
----------
PAGE
----
RECITALS OF THE COMPANY
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions...................................................1
Act...................................................................2
Affiliate.............................................................2
Authenticating Agent..................................................2
Board of Directors....................................................2
Board Resolution......................................................2
Business Day..........................................................2
Commission............................................................2
Company...............................................................2
Company Request" or "Company Order....................................2
Corporate Trust Office................................................3
corporation...........................................................3
Covenant Defeasance...................................................3
Defaulted Interest....................................................3
Defeasance............................................................3
Depositary............................................................3
Event of Default......................................................3
Exchange Act..........................................................3
Expiration Date.......................................................3
Global Security.......................................................3
Holder................................................................3
Indenture.............................................................3
interest..............................................................3
Interest Payment Date.................................................4
Investment Company Act................................................4
Maturity..............................................................4
Notice of Default.....................................................4
Officers' Certificate.................................................4
Opinion of Counsel....................................................4
Original Issue Discount Security......................................4
Outstanding...........................................................4
Paying Agent..........................................................5
--------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-i-
<PAGE>
Person................................................................5
Place of Payment......................................................5
Predecessor Security..................................................5
Redemption Date.......................................................6
Redemption Price......................................................6
Regular Record Date...................................................6
Responsible Officer...................................................6
Securities............................................................6
Securities Act........................................................6
Security Register" and "Security Registrar............................6
Special Record Date...................................................6
Stated Maturity.......................................................6
Subsidiary............................................................6
Trust Indenture Act...................................................7
Trustee...............................................................7
Vice President........................................................7
SECTION 102. Compliance Certificates and Opinions..........................7
SECTION 103. Form of Documents Delivered to Trustee........................8
SECTION 104. Acts of Holders; Record Dates.................................8
SECTION 105. Notices, Etc., to Trustee and Company........................10
SECTION 106. Notice to Holders; Waiver....................................11
SECTION 107. Conflict with Trust Indenture Act............................11
SECTION 108. Effect of Headings and Table of Contents.....................11
SECTION 109. Successors and Assigns.......................................12
SECTION 110. Separability Clause..........................................12
SECTION 111. Benefits of Indenture........................................12
SECTION 112. Governing Law................................................12
SECTION 113. Legal Holidays...............................................12
ARTICLE TWO SECURITY FORMS
SECTION 201. Forms Generally..............................................13
SECTION 202. Form of Face of Security.....................................14
SECTION 203. Form of Reverse of Security..................................15
SECTION 204. Form of Legend for Global Securities.........................20
SECTION 205. Form of Trustee's Certificate of Authentication..............21
ARTICLE THREE THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.........................21
SECTION 302. Denominations................................................24
SECTION 303. Execution, Authentication, Delivery and Dating...............24
SECTION 304. Temporary Securities.........................................25
--------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-ii-
<PAGE>
SECTION 305. Registration, Registration of Transfer and Exchange..........26
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.............28
SECTION 307. Payment of Interest; Interest Rights Preserved...............28
SECTION 308. Persons Deemed Owners........................................30
SECTION 309. Cancellation.................................................30
SECTION 310. Computation of Interest......................................31
SECTION 311. CUSIP Numbers................................................31
ARTICLE FOUR SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture......................31
SECTION 402. Application of Trust Money...................................32
ARTICLE FIVE REMEDIES
SECTION 501. Events of Default............................................33
SECTION 502. Acceleration of Maturity; Rescission and Annulment...........35
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee......................................................36
SECTION 504. Trustee May File Proofs of Claim.............................36
SECTION 505. Trustee May Enforce Claims Without Possession of Securities..37
SECTION 506. Application of Money Collected...............................37
SECTION 507. Limitation on Suits..........................................38
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.........................................38
SECTION 509. Restoration of Rights and Remedies...........................38
SECTION 510. Rights and Remedies Cumulative...............................39
SECTION 511. Delay or Omission Not Waiver.................................39
SECTION 512. Control by Holders...........................................39
SECTION 513. Waiver of Past Defaults......................................39
SECTION 514. Undertaking for Costs........................................40
SECTION 515. Waiver of Usury, Stay or Extension Laws......................40
ARTICLE SIX THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities..........................41
SECTION 602. Notice of Defaults...........................................41
SECTION 603. Certain Rights of Trustee....................................41
SECTION 604. Not Responsible for Recitals or Issuance of Securities.......43
SECTION 605. May Hold Securities..........................................43
SECTION 606. Money Held in Trust..........................................43
SECTION 607. Compensation and Reimbursement...............................43
SECTION 608. Conflicting Interests........................................44
SECTION 609. Corporate Trustee Required; Eligibility......................44
SECTION 610. Resignation and Removal; Appointment of Successor............45
--------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
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<PAGE>
SECTION 611. Acceptance of Appointment by Successor.......................46
SECTION 612. Merger, Conversion, Consolidation or Succession to Business..47
SECTION 613. Preferential Collection of Claims Against Company............48
SECTION 614. Appointment of Authenticating Agent..........................48
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders....49
SECTION 702. Preservation of Information; Communications to Holders.......50
SECTION 703. Reports by Trustee...........................................50
SECTION 704. Reports by Company...........................................51
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.........51
SECTION 802. Successor Substituted........................................52
ARTICLE NINE SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders...........52
SECTION 902. Supplemental Indentures With Consent of Holders..............53
SECTION 903. Execution of Supplemental Indentures.........................54
SECTION 904. Effect of Supplemental Indentures............................55
SECTION 905. Conformity with Trust Indenture Act..........................55
SECTION 906. Reference in Securities to Supplemental Indentures...........55
ARTICLE TEN COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest..................55
SECTION 1002. Maintenance of Office or Agency.............................55
SECTION 1003. Money for Securities Payments to Be Held in Trust...........56
SECTION 1004. Statement by Officers as to Default.........................57
SECTION 1005. Existence...................................................57
SECTION 1006. Maintenance of Properties...................................58
SECTION 1007. Payment of Taxes and Other Claims...........................58
SECTION 1008. Original Issue Discount.....................................58
SECTION 1009. Waiver of Certain Covenants.................................58
ARTICLE ELEVEN REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article....................................59
SECTION 1102. Election to Redeem; Notice to Trustee.......................59
SECTION 1103. Selection by Trustee of Securities to Be Redeemed...........59
--------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
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<PAGE>
SECTION 1104. Notice of Redemption........................................60
SECTION 1105. Deposit of Redemption Price.................................61
SECTION 1106. Securities Payable on Redemption Date.......................62
SECTION 1107. Securities Redeemed in Part.................................62
ARTICLE TWELVE SINKING FUNDS
SECTION 1201. Applicability of Article....................................62
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.......63
SECTION 1203. Redemption of Securities for Sinking Fund...................63
ARTICLE THIRTEEN DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant
Defeasance..................................................65
SECTION 1302. Defeasance and Discharge....................................65
SECTION 1303. Covenant Defeasance.........................................65
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.............66
SECTION 1305. Deposited Money and Government Obligations to Be
Held in Trust; Miscellaneous Provisions.....................68
SECTION 1306. Reinstatement...............................................68
SECTION 1307. Qualifying Trustee..........................................69
--------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
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<PAGE>
SIGNATURES AND SEALS.......................................................70
ACKNOWLEDGEMENTS...........................................................71
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<PAGE>
..............................................
Certain Sections of this Indenture relating to Sections 310
through 318, inclusive, of the Trust Indenture Act of 1939:
Trust Indenture
Act Section Indenture Section
Section 310(a)
(1) .......................................... 609
(a) (2) .......................................... 609
(a) (3) .......................................... Not Applicable
(a) (4) .......................................... Not Applicable
(b) .......................................... 608
610
Section 311(a) .......................................... 613
(b) .......................................... 613
Section 312(a) .......................................... 701
702
(b) .......................................... 702
(c) .......................................... 702
Section 313(a) .......................................... 703
(b) .......................................... 703
(c) .......................................... 703
(d) .......................................... 703
Section 314(a) .......................................... 704
(a) (4) .......................................... 101
1004
(b) .......................................... Not Applicable
(c) (1) .......................................... 102
(c) (2) .......................................... 102
(c) (3) .......................................... Not Applicable
(d) .......................................... Not Applicable
(e) .......................................... 102
Section 315(a) .......................................... 601
(b) .......................................... 602
(c) .......................................... 601
(d) .......................................... 601
(e) .......................................... 514
Section 316(a) .......................................... 101
(a) (1)(A) .......................................... 502
512
(a) (1)(B) .......................................... 513
(a) (2) .......................................... Not Applicable
(b) .......................................... 508
(c) .......................................... 104
Section 317(a)
(1) .......................................... 503
(a) (2) .......................................... 504
(b) .......................................... 1003
Section 318(a) .......................................... 107
--------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
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<PAGE>
INDENTURE, dated as of __________ __, 1999, between EVEREST REINSURANCE
HOLDINGS, INC., a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal office at
477 Martinsville Road, P.O. Box 830, Liberty Corner, New Jersey 07938, and THE
CHASE MANHATTAN BANK, a banking corporation duly organized and existing under
the laws of New York, 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 unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
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 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 United States generally accepted
accounting principles;
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(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 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.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means 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", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, from time to
time constituted, created under the Exchange Act, 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.
"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 Vice
Chairman of the Board, its
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President or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be administered, which office
at the date of execution of this Indenture is located at 379 Thornall Street,
12th Floor, Edison, New Jersey 08837, Attention: Capital Markets Fiduciary
Services.
"corporation" means a corporation, limited liability company, association,
company, joint-stock company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1303.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 104.
"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or such
legend as may be specified as contemplated by Section 301 for such Securities).
"Government Obligation" has the meaning specified in Section 1304.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed and as it may
from time to time be amended or supplemented by one or more amendments or
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, including, for all purposes of this instrument and any such
amendment or supplemental indenture, the provisions of the Trust Indenture Act
that are deemed to be a part of and govern this instrument and any such
amendment or supplemental indenture, respectively. The term "Indenture" shall
also include the terms of particular series of Securities established as
contemplated by Section 301.
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"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 instalment of interest on such Security.
"Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an instalment 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.
"Notice of Default" means a written notice of the kind specified in
Section 501(4) or 501(5).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, 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. One of the officers signing an
Officers' Certificate given pursuant to Section 1004 shall be the principal
executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(2) 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; provided, however, 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;
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<PAGE>
(3) Securities as to which Defeasance has been effected pursuant to
Section 1302; and
(4) 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 pre sented 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;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated
in one or more foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date in
the manner provided as contemplated by Section 301, of the principal amount of
such Security (or, in the case of a Security described in Clause (A) or (B)
above, of the amount determined as provided in such Clause), and (D) 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, waiver or other action, only Securities which a Responsible
Officer of the Trustee assigned to its Corporate Trust Office 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.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, 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 where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
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<PAGE>
"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 shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the 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, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
senior trust officer, any assistant cashier, any trust officer or assistant
trust officer, the controller or any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers 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" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
instalment of principal thereof or interest thereon, means the date specified in
such Security as the fixed date on which the principal of such Security or such
instalment of principal or interest is due and payable.
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"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; 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.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
or include each Person who is then a Trustee hereunder, and if at any time there
is more than one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities of that series.
"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".
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 individual 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;
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<PAGE>
(3) a statement that, in the opinion of each such individual, 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, in the opinion of each such individual,
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 after reasonably inquiry
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
after reasonable inquiry 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.
Whenever, subsequent to the receipt by the Trustee of any Board Resolution,
Officers' Certificate, Opinion of Counsel or other document or instrument, a
clerical, typographical or other inadvertent or unintentional error or omission
shall be discovered therein, a new document or instrument may be substituted
therefor in corrected form with the same force and effect as if originally filed
in the corrected form and, irrespective of the date or dates of the actual
execution and/or delivery thereof, such substitute document or instrument shall
be deemed to have been executed and/or delivered as of the date or dates
required with respect to the document or instrument for which it is substituted.
Without limiting the generality of the foregoing, any Securities issued under
the authority of such defective document or too tight; loosen this line
instrument shall nevertheless be the valid obligations of the Company entitled
to the benefits of this Indenture equally and ratably with all other Outstanding
Securities.
SECTION 104. Acts of Holders; Record Dates.
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Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made 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 agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent 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 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.
The ownership of Securities shall be proved by the Security Register.
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.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided, however,
that the Company may not set a record date for, and the provisions of this
paragraph shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; provided, however, that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of
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such series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided, however, that
no such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal amount of
Outstanding Securities of such series on such record date. Nothing in this
paragraph shall be construed to prevent the Trustee from setting a new record
date for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided, however, that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities of the relevant series in the manner
set forth in Section 106, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the party hereto which set such record date shall be deemed to
have initially designated the [180]th day after such record date as the
Expiration Date with respect thereto, subject to its right to change the
Expiration Date as provided in this paragraph.
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Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
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: Capital Markets
Fiduciary Services, 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 instrument, Attention: __________ or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. 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 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.
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 by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
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SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act which is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
which 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 108. 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 109. 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 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York, without regard to conflict of
laws principles.
SECTION 113. Legal Holidays.
If any Interest Payment Date, Redemption Date or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or
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the Securities) payment of interest or principal (and premium, if any) or other
amounts in respect of such Security need not be made on such date, but may be
made on the next succeeding Business Day (and no interest shall accrue in
respect of the amounts whose payment is so delayed for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be, until such next succeeding Business Day) except that, if such Business Day
falls in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day (in each case with the same force and effect
as if made on the Interest Payment Date or Redemption Date or at the Stated
Maturity).
SECTION 114. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of or any premium 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 supplemental 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 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
liability is hereby expressly waived and released as a condition of, and as
consideration for, the execution of this Indenture and the issue of the
Securities.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of 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.
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The definitive Securities 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.
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SECTION 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]
EVEREST REINSURANCE HOLDINGS, INC.
..................................
No. ......... $ ........
EVEREST REINSURANCE HOLDINGS, INC., a corporation duly organized and
existing under the laws of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to............................., or
registered assigns, the principal sum of ................. Dollars on
....................................... [if the Security is to bear interest
prior to Maturity, insert -- , and to pay interest thereon from ............. or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi- annually on ............ and ............ in each year,
commencing ........., at the rate of ....% per annum, until the principal hereof
is paid or made available for payment [if applicable, insert -- , provided,
however, that any principal and premium, and any such instalment of interest,
which is overdue shall bear interest at the rate of ...% per annum (to the
extent that the payment of such interest shall be legally enforceable), from the
dates such amounts are due until they are paid or made available for payment,
and such interest shall be payable on demand]. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the ....... or
....... (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture].
[If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of ....% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
principal or
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premium shall be payable on demand. [Any such interest on overdue principal or
premium which is not paid on demand shall bear interest at the rate of ......%
per annum (to the extent that the payment of such interest on interest shall be
legally enforceable), from the date of such demand until the amount so demanded
is paid or made available for payment. Interest on any overdue interest shall be
payable on demand.]]
Payment of the principal of (and premium, if any) and [if applicable,
insert -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in ............, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts [if applicable, insert -- ;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register].
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
EVEREST REINSURANCE HOLDINGS, INC.
By
--------------------------------
Attest:
- ------------------------------
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of _________ __, 1999 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and THE CHASE MANHATTAN BANK, as Trustee
(herein called the "Trustee", which term includes any
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successor trustee under the Indenture), and reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof [if applicable, insert -- , limited in aggregate principal
amount to $...........].
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on ........... in any year commencing with the year ...... and ending with
the year ...... through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [if
applicable, insert -- on or after ..........,], as a whole or in part, at the
election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [if applicable, insert -- on
or before ..............., ...%, and if redeemed] during the 12-month period
beginning ............. of the years indicated,
Redemption Redemption
Year Price Year Price
- ---- ---------- ---- ----------
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest instalments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ............ in
any year commencing with the year .... and ending with the year .... through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [if
applicable, insert -- on or after ............], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the
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sinking fund (expressed as percentages of the principal amount) set forth in the
table below: If redeemed during the 12-month period beginning ............ of
the years indicated,
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- ----------------- ----------------------
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest instalments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- Notwithstanding the foregoing, the Company may
not, prior to ............., redeem any Securities of this series as
contemplated by [if applicable, insert --Clause (2) of] the preceding paragraph
as a part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than .....% per annum.]
[If applicable, insert -- The sinking fund for this series provides for
the redemption on ............ in each year beginning with the year ....... and
ending with the year ...... of [if applicable, insert -- not less than
$.......... ("mandatory sinking fund") and not more than] $......... aggregate
principal amount of Securities of this series. Securities of this series
acquired or redeemed by the Company otherwise than through [if applicable,
insert -- mandatory] sinking fund payments may be credited against subsequent
[if applicable, insert -- mandatory] sinking fund payments otherwise required to
be made [if applicable, insert -- , in the inverse order in which they become
due].]
[If the Security is subject to redemption of any kind, insert -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]
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[If applicable, insert -- The Securities of this series are not redeemable
prior to Stated Maturity.]
[If applicable, insert -- This Security will be redeemable, in whole or in
part, at the option of the Company at any time at a redemption price equal to
the greater of (i) 100% of the principal amount of such Security or (ii) as
determined by a Quotation Agent, the sum of the present values of the remaining
scheduled payments of principal and interest thereon (not including any portion
of such payments of interest accrued as of the date of redemption) discounted to
the redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate, plus [__] basis points,
plus, in each case, accrued interest thereon to the date of redemption.
"Adjusted 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 Issue" means the United States Treasury security
selected by a Quotation Agent as having a maturity comparable to the remaining
term of the Notes that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of the Notes.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (ii) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Quotations.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Trustee after consultation with the Company.
"Reference Treasury Dealer" means (i) Goldman, Sachs & Co. and its
respective successors; provided, however, that if the foregoing shall cease to
be a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer; and (ii) any other Primary Treasury Dealer selected by the
Trustee after consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
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 such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such redemption date.
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Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Securities to be redeemed.]
[If applicable, insert -- The Indenture contains provisions for defeasance
at any time of [the entire indebtedness of this Security] [or] [certain
restrictive covenants and Events of Default with respect to this Security] [, in
each case] upon compliance with certain conditions set forth in the Indenture.]
[If the Security is not an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of a majority in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than a majority in principal
amount of the Securities of this series at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable indemnity, and the
Trustee shall not have
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received from the Holders of a majority in principal amount of Securities of
this series at the time Outstanding a direction inconsistent with such request,
and shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Security for the enforcement
of any payment of principal hereof or any premium or interest hereon on or after
the respective due dates expressed herein.
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 any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $....... and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Interest on the Securities of this series shall be computed on the basis
of a [360-day year of twelve 30-day months].
Prior to due presentment of this 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 this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
SECTION 204. Form of Legend for Global Securities.
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Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
SECTION 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates 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.
THE CHASE MANHATTAN BANK,
As Trustee
By
----------------------------
Authorized Officer
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. There shall be
established in or pursuant to a Board Resolution and set forth, in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series,
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(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from Securities of any other series);
(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); provided, however, that the
authorized aggregate principal amount of such series may be increased above
such amount by a Board Resolution to such effect;
(3) the date or dates on which the principal of any Securities of the
series is payable or the method for determining such date or dates;
(4) the terms and condition, if any, under which the Company can shorten
or extend the date on which the principal of any Securities of the series is
payable;
(5) the rate or rates at which any Securities of the series shall bear
interest, if any, or the method for determining such rate, or rates the date
or dates from which any such interest shall accrue, the Interest Payment
Dates on which any such interest shall be payable and the Regular Record Date
for any such interest payable on any Interest Payment Date;
(6) the terms and conditions, if any, under which the Company can extend
the date or dates on which interest should be payable;
(7) the place or places where the principal of and any premium and
interest on any Securities of the series shall be payable;
(8) the period or periods within which, the price or prices at which and
the terms and conditions upon which any Securities of the series may be
redeemed, in whole or in part, at the option of the Company and, if other
than by a Board Resolution, the manner in which any election by the Company
to redeem the Securities shall be evidenced;
(9) the obligation, if any, of the Company to redeem or purchase any
Securities of the series pursuant to any sinking fund or analogous provisions
or at the option of the Holder thereof and the period or periods within
which, the price or prices at which and the terms and conditions upon which
any Securities of the series shall be redeemed or purchased, in whole or in
part, pursuant to such obligation;
(10) if the amount of principal of or any premium or interest on any
Securities of the series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts shall be determined;
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(11) if other than the currency of the United States of America, the
currency, currencies or currency units in which the principal of or any
premium or interest on any Securities of the series shall be payable and the
manner of determining the equivalent thereof in the currency of the United
States of America for any purpose, including for purposes of the definition
of "Outstanding" in Section 101;
(12) if the principal of or any premium or interest on any Securities of
the series is to be payable, at the election of the Company or the Holder
thereof, in one or more currencies or currency units other than that or those
in which such Securities are stated to be payable, the currency, currencies
or currency units in which the principal of or any premium or interest on
such Securities as to which such election is made shall be payable, the
periods within which and the terms and conditions upon which such election is
to be made and the amount so payable (or the manner in which such amount
shall be determined);
(13) if other than the entire 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 amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more dates
prior to the Stated Maturity, the amount which shall be deemed to be the
principal amount of such Securities as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which shall
be due and payable upon any Maturity other than the Stated Maturity or which
shall be deemed to be Outstanding as of any date prior to the Stated Maturity
(or, in any such case, the manner in which such amount deemed to be the
principal amount shall be determined);
(15) if applicable, that the Securities of the series, in whole or any
specified part, shall be defeasible pursuant to Section 1302 or Section 1303
or both such Sections;
(16) if applicable, that any Securities of the series shall be issuable in
whole or in part in the form of one or more Global Securities and, in such
case, the respective Depositaries for such Global Securities, the form of any
legend or legends which shall be borne by any such Global Security in
addition to or in lieu of that set forth in Section 204 and any circumstances
in addition to or in lieu of those set forth in Clause (2) of the last
paragraph of Section 305 in which any such Global Security may be exchanged
in whole or in part for Securities registered, and any transfer of such
Global Security in whole or in part may be registered, in the name or names
of Persons other than the Depositary for such Global Security or a nominee
thereof;
(17) any addition to, deletion from or change in the Events of Default
which applies to any Securities of the series and any change in the right of
the Trustee or the requisite Holders of such Securities to declare the
principal amount thereof due and payable pursuant to Section 502;
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(18) any addition to, deletion from or change in the covenants set forth
in Article Ten which applies to Securities of the series; and
(19) the Person to whom any interest on a Security of the series shall be
payable, if other than the Person in whose name that Security (or one or more
Predecessor Securi ties) is registered at the close of business on the
Regular Record Date for such interest;
(20) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;
(21) 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 shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to the
Board Resolu tion 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, or providing the manner for determining, the terms of
the series.
SECTION 302. Denominations.
The Securities of each series shall be issuable only in registered form
without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral mul tiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, 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.
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Securities 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.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series 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. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,
(1) if the form or forms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 201, that such form or
forms have been established in conformity with the provisions of this
Indenture;
(2) if the terms of such Securities have been established by or pursuant
to Board Resolution as permitted by Section 301, that such terms have been
established in conformity with the provisions of this Indenture; and
(3) that such Securities, 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, moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
If such form or forms or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
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No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an authorized officer, 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, 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,
mimeographed or otherwise produced, 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
evidenced by their execution of such Securities.
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 in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations and of like tenor
and aggregate principal amount. Until so exchanged, the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series and tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office in any other office
or agency of the Company in a Place of Payment being herein sometimes 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
Securities and of transfers of Securities. The Trustee is hereby appointed
"Security Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided.
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Upon surrender for registration of transfer of any Security of a series at
the office or agency of the Company in a Place of Payment for that 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 Securities of
the same series, of any authorized denominations and of like tenor and aggregate
principal amount.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of like
tenor and aggre gate principal amount, upon surrender of the Securities to be
exchanged at 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.
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 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 form
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 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.
If the Securities of any series (or of any series and specified tenor) are
to be redeemed in part, the Company shall not be required (A) to issue, register
the transfer of or exchange any Securities of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of any
such Securities selected for redemption under Section 1103 and ending at the
close of business on the day of such mailing or (B) to 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 provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global Security
or a nominee thereof and delivered to such Depositary or a nominee thereof or
custodian therefor, and
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each such Global Security shall constitute a single Security for all purposes
of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and
no transfer of a Global Security in whole or in part may be registered, in
the name of any Person other than the Depositary for such Global Security or
a nominee thereof unless (A) such Depositary (i) has notified the Company
that it is unwilling or unable to continue as Depositary for such Global
Security and no successor is appointed by the Company with 90 days of such
notification or (ii) has ceased to be a clearing agency registered under the
Exchange Act and a successor Depositary is not appointed by the Company
within 90 days after its receipt of such notice or its becoming aware of such
cessation, (B) there shall have occurred and be continuing an Event of
Default with respect to such Global Security, (C) the Company elects to have
the Securities exchanged for Securities registered in the name of Person
other than the Depositary for the Global Security or a nominee thereof or (D)
there shall exist such circumstances, if any, in addition to or in lieu of
the foregoing as have been specified for this purpose as contemplated by
Section 301.
(3) Subject to Clause (2) above, any exchange of a Global Security for
other Securities may be made in whole or in part, and all Securities issued
in exchange for a Global Security or any portion thereof shall be registered
in such names as the Depositary for such Global Security shall direct.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 304, 306, 906 or
1107 or otherwise, shall be authenticated and delivered in the form of, and
shall be, a Global Security, unless such Security is registered in the name
of a Person other than the Depositary for such Global Security or a nominee
thereof.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee together with such
security or indemnity as may be required by the Corporation or the Trustee to
save each of them harmless, 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.
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 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 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, a new
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Security of the same series and of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu
of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect
to any series of Securities, interest on any 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 except that, unless otherwise provided in the Securities of
such series, interest payable on the Stated Maturity of the principal of a
Security shall be paid to the Person to whom principal is paid.
Any interest on any 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:
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(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the 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 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 given to each Holder of Securities of such series in the
manner set forth in Section 106, 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 so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
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
Securities of any series 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.
Unless otherwise provided in or pursuant to this Indenture or any
supplemental indenture, interest on the Securities of any series will be
payable, at the option of the Company, (1) by wire transfer to an account at a
banking institution in the United States that the Holder designates in writing
to the Trustee at least 16 days prior to the interest Payment Date or (2) by
check mailed to the address of the Holder as such address appears in the
Security Register for the Securities of such series.
Subject to the foregoing provisions of this Section, 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.
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SECTION 308. Persons Deemed Owners.
Prior to due presentment of a 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 Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and any premium and
(subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security 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.
No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Security, and such Depositary may be treated by the Corporation,
the Trustee and any agent of the Corporation or the Trustee as the owner of such
Global Security for all purposes whatsoever. None of the Corporation, the
Trustee nor any agent of the Corporation or the Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global Security
or maintaining, supervising or reviewing any records relating to such beneficial
ownership interests. Notwithstanding the foregoing, nothing herein shall prevent
the Corporation, the Trustee or any agent of the Corporation or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by a Depositary or impair, as between a Depositary and such holders of
beneficial interests, the operation of customary practices governing the
exercise of the rights of the Depositary (or its nominee) as Holder of any
Security.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer 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
and shall be promptly cancelled by it. 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 held by the Trustee shall be disposed of as directed by a Company
Order, or after 90 days, if not in receipt of such Company Order, shall be
disposed of in accordance with the Trustee's customary procedures.
SECTION 310. Computation of Interest.
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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 and the actual
number of days elapsed in any partial month in such period, and interest on the
Securities of each series for a full period shall be computed by dividing the
rate per annum by the number of interest periods that together constitute a full
twelve months.
SECTION 311. 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 Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of 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.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instru ments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 306 and (ii) Securities 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) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
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(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 (x) money in an amount, (y) Government Obligations which through
the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than the due date of
any payment, money in an amount or (z) a combination thereof, in each case
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 the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and any premium and 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
(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 Company to any Authen ticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the 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 Outstanding Securities.
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 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 with the Trustee.
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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 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) except
as may be specified in Section 301:
(1) default in the payment of the principal of or any premium on any
Security of that series at its Maturity; or
(2) 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, provided, however, that if the Company is permitted by the
terms of the Securities of such series to defer the payment in question, the
date on which such payment is due and payable shall be the date on which the
Company is required to make payment following such deferral, if such deferral
has been elected pursuant to the terms of the Securities of such series; 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) 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 perfor mance 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 60 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 33% 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, unless the Trustee, or the Trustee
and the Holders of a principal amount of Securities of such series not less
than the principal amount of Securities that gave such notice, as the case
may be, shall agree in writing to an extension of such period prior to its
expiration; provided, however, that the Trustee, or the Trustee and the
Holders of such principal amount of Securities of such series, as the case
may be, shall be deemed to have agreed to an extension of such period if
corrective action is initiated by the Company with such period and is being
diligently pursued; or
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(5) a default under any (i) debt for any money borrowed by the Company
(including a default with respect to Securities of any series other than that
series), (ii) mortgage, indenture or instrument (including this Indenture)
under which there may be issued or by which there may be secured or evidenced
any indebtedness for money borrowed by the Company, whether such indebtedness
now exists or shall hereafter be created, or (iii) guarantee of payment for
money borrowed, which default shall have resulted in such indebtedness
becoming or being declared due and payable prior to the date on which it
would otherwise have become due and payable, without such indebtedness having
been discharged, or such acceleration having been rescinded or annulled,
within a period of 10 days after there shall have 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 33% in prin cipal amount of the
Outstanding Securities of that series a written notice specifying such
default and requiring the Company to cause such indebtedness to be discharged
or cause such acceleration to be rescinded or annulled, as the case may be,
and stating that such notice is a "Notice of Default" hereunder; provided,
however, that, subject to the provisions of Sections 601 and 602, the Trustee
shall not be deemed to have knowledge of such default unless either (A) a
Responsible Officer of the Trustee assigned to its Corporate Trust Office
shall have actual knowledge of such default or (B) the Trustee shall have
received written notice thereof from the Company, from any Holder, from the
holder of any such indebtedness or from the trustee under any such mortgage,
indenture or other instrument, provided, further, a default shall exist under
this clause only if the aggregate principal amount outstanding under all such
indebtedness that has become due prior to the date on which it would
otherwise become due and payable exceeds $25,000,000; or
(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 a 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 its
property, 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 60 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 to the commencement of any bankruptcy or insolvency
case or proceeding against it, 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 it to the filing of such petition or
to the
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appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or
of any substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the authorization
of any such action by the Board of Directors; 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 33% in principal amount of the Outstanding
Securities of that series may declare the principal amount of all the Securities
of that series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) 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 major ity 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 all Securities of that series,
(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,
(C) all overdue sinking fund payments with respect to Securities of
that series and interest thereon at the rate or rates prescribed therefor
in such Securities,
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest 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;
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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 53. 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, or
(3) default is made in the deposit of any sinking fund payment, when and
as due by the terms of a Security of any series,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally en forceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, 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 Security 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 Security, 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 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.
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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), its property or its creditors, 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, 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 the Holders, vote for the election of a
trustee in 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.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
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 the reasonable compensation, expenses, disburse ments and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities 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 and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
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FIRST: To the payment of all amounts due the Trustee under Section 607;
SECOND: To the payment of the amounts then due and unpaid for principal of
and any premium and interest on the Securities 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 for principal and any premium and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver 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 a majority 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 has failed to institute any such proceeding for 60 days
after its receipt of such notice, request and offer of indemnity; 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 of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
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Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, 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 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 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 in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or 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 Securities 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 may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
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
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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, however, that
(1) such direction shall not be in conflict with any rule of law or with
this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than 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 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 (unless such default has been cured and the
Corporation has paid to and deposited with the Trustee a sum sufficient to
pay all matured installments of interest and all principal of and any premium
on all Securities of that series due otherwise than by acceleration),
(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, and
(3) subject to the provision of Section 601, the Trustee shall have the
right to decline to follow any such direction if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee, determine that
the proceeding so directed would involve the Trustee in personal liability.
Any such waiver shall be deemed to be on behalf of the Holder of all the
Securities of such series.
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.
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
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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, 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, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Company, to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities of any series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of or premium or interest on
any Security on or after the Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date).
SECTION 515. Waiver of Usury, 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 or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and 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.
SECTION 602. Notice of Defaults.
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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 with 90 day after it occurs unless such default shall have been cured or
waived; provided, however, that except in the case of a default in the payment
of the principal of or any premium or interest on any Securities of any series
or in the making of any sinking fund payment payable with respect to Securities
of any series, the Trustee may withhold the 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 withholding
the notice in the interest of holders of Securities of that series; and
provided, however, that in the case of any default of the character specified in
Section 501(4) 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 (whether original
or in facsimile form) 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 shall be sufficiently evidenced by a
Board Resolution;
(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;
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(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;
(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;
(8) in the event that the Trustee is also acting as Paying Agent,
Authenticating Agent or Transfer Agent and Registrar hereunder, the rights
and protections afforded to the Trustee pursuant to this Article VI shall
also be afforded such Paying Agent or Transfer Agent and Registrar;
(9) the Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Indenture; and
(10) the Trustee shall not be charged with knowledge of any Event of
Default unless either (1) a Responsible Officer of the Trustee shall have
actual knowledge or (2) the Trustee shall have received notice thereof from
the Company or a Holder.
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, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by 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, 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.
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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 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 for, and to hold it harmless against, any
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 of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
The Trustee shall have a lien prior to the Securities upon all property
and funds held by it hereunder for any amount owing it or any precedessor
Trustee pursuant to this Section 607, except with respect to funds held in trust
for the benefit of the Holders of particular Securities.
Without limiting any rights available to the Trustee under applicable law,
when the Trustee incurs expenses or renders services in connection with an Event
of Default specified in Section 501(6) or Section 501(7), the expenses
(including the reasonable charges and expenses of its agents and 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.
Without prejudice to any other rights available to the Trustee under
applicable law, the Trustee incurs expenses or renders services after an Event
of Default specified in Section 501(6) or 501(7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Reform Act of 1978 or any successor statute.
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The provisions of this Section shall survive the satisfaction and
discharge of this Indenture, the defeasance of the Securities and the
resignation or removal of the Trustee.
SECTION 608. 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. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series or under any other indenture with respect to
securities issued by the Company of any of its Affiliates.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person 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 with respect to the Securities of any series 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.
SECTION 610. Resignation and Removal; Appointment of Successor.
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.
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.
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.
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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 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 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, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities or (B) subject to Section 514, any Holder
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.
If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of 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 of such 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 and accepted appointment in the manner required by Section 611, any
Holder 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.
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 to all Holders of
Securities of such series in the
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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.
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 any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of 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.
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, 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 facili tate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall, upon payment
of its charges, 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.
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Upon request of any such 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 the
first or second preceding paragraph, as the case may be.
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 appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
(in accordance with procedures acceptable to the Trustee) and 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
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be
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acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conver sion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenti cating 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 the Authenticating Agent.
An Authenticating Agent may 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 a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authen ticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment of an Authenticating Agent with respect to one or more
series is made pursuant to this Section, the Securities of such series may have
endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
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This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
As Trustee
By
----------------------------
As Authenticating Agent
By
----------------------------
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(1) 15 days after each Regular Record Date, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
Securities of each series as of such Regular Record Date; and
(2) 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;
in each case to the extent information is in the possession of the Corporation
and has not otherwise been received by the Trustee in its capacity as Security
Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
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
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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.
The rights of 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.
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
agent of either 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.
SECTION 703. Reports by Trustee.
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.
If required by Section 313(a) of the Trust Indenture Act, the Trustee
shall, within sixty days after each September 15 following the date of this
Indenture deliver to the Holders a brief report, dated as of such September 15,
which complies with the provisions of such Section 313(a).
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 on any stock exchange.
SECTION 704. Reports by Company.
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, however, that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act 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
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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 Person, and the Company shall not permit any Person to consolidate with
or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or into
which 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
of America, any State thereof, the District of Columbia or Bermuda or the
Cayman Islands 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 on all the Securities and the performance or observance of every
covenant of this Indenture on the part of the Company to be performed or
observed;
(2) immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Company or any Subsidiary as
a result of such transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing; 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, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with; and the Trustee, subject to
Section 601, may rely upon such Officers' Certificate and Opinion of Counsel
as conclusive evidence that such transaction complies with Section 801.
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
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as if such successor Person had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities.
Such successor Person may cause to be executed, and may issue either in
its own name or in the name of the Corporation, any or all of the Securities
issuable hereunder that theretofore shall not have been signed by the
Corporation and delivered to the Trustee; and, upon the order of such successor
Person instead of the Corporation and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities that previously shall have been signed and
delivered by the officers of the Corporation to the Trustee for authentication
pursuant to such provisions and any Securities that such successor Person
thereafter shall cause to be executed and delivered to the Trustee on its behalf
for the purpose pursuant to such provisions. All the Securities so issued shall
in all respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form may be made in the Securities thereafter to be
issued as may be appropriate.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, 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; or
(2) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Securities (and if such covenants are to be for the
benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default for the benefit of the Holders
of all or any series of Securities (and if such additional Events of Default
are to be for the benefit of less than all series of Securities, stating that
such additional Events of Default are expressly being included solely for the
benefit of such series); or
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(4) to add to or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the issuance
of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this Indenture
provided, however, that any such addition, change or elimination (A) shall
become effective only when there is no such Security Outstanding or (B) not
apply to any Outstanding Securities; or
(6) to secure the Securities; or
(7) to establish the form or forms or terms of Securities of any series 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;
(9) to cure any ambiguity, to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising under
this Indenture, provided, however, that such action pursuant to this Clause
(9) shall not adversely affect the interests of the Holders of Securities of
any series in any material respect; or
(10) to comply with the requirements of the Commission in order to effect
or maintain qualifications of this Indenture under the Trust Indenture Act.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in aggregate
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 a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any instalment of
principal of or interest on, any Security, or reduce the principal amount
thereof or the rate of interest
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thereon or any premium payable upon the redemption thereof, or reduce the
amount of the principal of an Original Issue Discount Security or any other
Security which would be due and payable upon a declaration of acceleration of
the Maturity thereof pursuant to Section 502, or change any Place of Payment
where, or the coin or currency in which, any Security or any premium or
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof (or,
in the case of redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required to enter
into any such supplemental indenture, or the consent of whose Holders is
required for any waiver of compliance with any provisions of this Indenture
or any default hereunder and their consequences provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or Section
1011, 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 Out standing Security affected thereby; provided,
however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section and Section 1008, or the deletion of this
proviso, in accordance with the requirements of Sections 611 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.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 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 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.
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Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
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.
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 and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for pay ment, 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 Securi ties of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency
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or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other offices
or agencies where the 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 each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any 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, it will, on or before each due date of the
principal of or 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 and 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 so to
act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than 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 (1) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (2) 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, 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
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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 or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall 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 such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The Borough of
Manhattan, The City of New York, 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. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1006. Maintenance of Properties.
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The Company will cause all properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
SECTION 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1008. Original Issue Discount.
For each year during which any Securities that were issued with original
issue discount are Outstanding, the Corporation shall furnish to each Paying
Agent in a timely fashion such information as may be reasonably requested by
each Paying Agent in order that each Paying Agent may prepare the information
which it is required to report for such year on Internal Revenue Service Forms
1096 and 1099 pursuant to Section 6049 of the Internal Revenue Code of 1986, as
amended. Such information shall include the amount of original issue discount
includible in income for each $25 of principal amount at Stated Maturity of
outstanding Securities during such year.
SECTION 1009. Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301 for
Securities of such series, the Company may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 301(18),
901(2) or 901(7) for the benefit of the Holders of such series if before the
time for such compliance the Holders of at least a majority in principal amount
of the Outstanding Securities of such series shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such 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
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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 such Securities) 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 or in another manner specified as contemplated by Section 301
for such Securities. In case of any redemption at the election of the Company of
less than all the Securities of any series (including any such redemption
affecting only a single Security), the Company shall, at least 60 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 to be redeemed. In the case of any redemption of
Securities (1) prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture or (2)
pursuant to an election of the Company which is subject to a condition specified
in the terms of such Securities or elsewhere in this Indenture, the Company
shall furnish the Trustee with an Officers' Certificate evidencing compliance
with such restriction or condition.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of a
por tion of the principal amount of any Security of such series, provided,
however, that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be
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redeemed (unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee from the Outstanding Securities of such series
and specified tenor not previously called for redemption in accordance with the
preceding sentence.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption as aforesaid and, in case of any Securities selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
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.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price or if the Redemption Price cannot be calculated
prior to the time the notice is required to be sent, the estimate of the
Redemption Price together with a statement that it is an estimate and that
the actual Redemption Price will be calculated on the third Business Day
prior to the Redemption Date (and if an estimate is provided, a further
notice shall be sent of the actual Redemption Price on the date that such
Redemption Price is calculated);
(3) if less than all the Outstanding Securities of any series consisting
of more than a single Security are to be redeemed, the identification (and,
in the case of partial redemption of any such Securities, the principal
amounts) of the particular Securities to be redeemed and, if less than all
the Outstanding Securities of any series consisting of a single Security are
to be redeemed, the principal amount of the particular Security to be
redeemed,
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(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 each such Security is to be surrendered for
payment of the Redemption Price,
(6) that the redemption is for a sinking fund, if such is the case, and
(7) such other matters as the Company deems desirable or appropriate.
Unless otherwise specified with respect to any Securities in accordance
with Section 301, with respect to any redemption of Securities at the election
of the Company, unless, upon the giving of notice of such redemption, Defeasance
shall have been effected with respect to such Securities pursuant to Section
1302, such notice may state that such redemption shall be conditional upon the
receipt by the Trustee or the Paying Agent for such Securities, on or prior to
the date fixed for such redemption, of money sufficient to pay the principal of
and any premium and interest on such Securities and that if such money shall not
have been so received such notice shall be of no force or effect and the Company
shall not be required to redeem such Securities. In the event that such notice
of redemption contains such a condition and such money is not so received, the
redemption shall not be made and within a reasonable time thereafter notice
shall be given, in the same manner in which the notice of redemption was given,
that such money was not so received and such redemption was not required to be
made, and the Trustee or Paying Agent for the Securities otherwise to have been
redeemed shall promptly return to the Holders thereof any of such Securities
that had been surrendered for payment upon such redemption.
The Company is issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall indicate the "CUSIP" numbers of
the Securities in notices of redemption and related materials as a convenience
to Holders; provided, however, 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 redemption and related
materials.
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 and shall be irrevocable.
The notice if mailed in the manner provided above shall be conclusively presumed
to have been duly given, whether or not the Holder receives such notice. In any
case, a failure to give such notice by mail or any defect in the notice to the
Holder of any Security designated for redemption as a whole or in part shall not
affect the validity of the proceedings for the redemption of any other Security.
SECTION 1105. Deposit of Redemption Price.
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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.
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. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, instalments of interest whose Stated Maturity is on
or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
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.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at
a Place of Payment therefor (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 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.
If a Global Security is so surrendered, such new Security shall be a new
Global Security.
ARTICLE TWELVE
SINKING FUNDS
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SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series except as otherwise specified as
contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by the terms
of any Securities 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
such Securities is herein referred to as an "optional sinking fund payment". If
provided for by the terms of any Securities, 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 as provided for by
the terms of such Securities.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
In lieu of making all or any part of a mandatory sinking fund payment with
respect to any Securities of a series in cash, the Corporation may at its
option, at any time no more than 16 months and no less than 45 days prior to the
date on which such sinking fund payment is due, deliver to the Trustee
Securities of such series theretofore purchased or otherwise acquired by the
Corporation, except Securities of such series that have been redeemed through
the application of mandatory or optional sinking fund payments pursuant to the
terms of the Securities of such series, accompanied by a Corporation Order
instructing the Trustee to credit such obligations and stating that the
Securities of such series were originally issued by the Corporation by way of
bona fide sale or other negotiation for value; provided that the Securities to
be so credited have not been previously so credited. The Securities to be so
credited shall be received and credited for such purpose by the Trustee at the
redemption price for such Securities, as specified in the Securities so to be
redeemed, for redemption through operation of the sinking fund and the amount of
such sinking fund payment shall be reduced accordingly.
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 Corporation will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash in the currency in which the
Securities of such series are payable (except as provided pursuant to Section
301) and the portion thereof, if any, that is to be satisfied by delivering and
crediting Securities pursuant to Section 1202 and will also deliver to the
Trustee any Securities to be so delivered. Such Officers' Certificate shall be
irrevocable and upon its
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delivery the Corporation shall be obligated to make the cash payment or payments
therein referred to, if any, on or before the succeeding sinking fund payment
date. In the case of the failure of the Corporation to deliver such Officers'
Certificate (or, as required by this Indenture, the Securities and coupons, if
any, specified in such Officers' Certificate) by the due date therefor, the
sinking fund payment due on the succeeding sinking fund payment date for such
series shall be paid entirely in cash and shall be sufficient to redeem the
principal amount of the Securities of such series subject to a mandatory sinking
fund payment without the right to deliver or credit securities as provided in
Section 1202 and without the right to make the optional sinking fund payment
with respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional) made in cash
plus any unused balance of any preceding sinking fund payments made with respect
to the Securities of any particular series shall be applied by the Trustee (or
by the Corporation if the Corporation is acting as its own Paying Agent) on the
sinking fund payment date on which such payment is made (or, if such payment is
made before a sinking fund payment date, on the sinking fund payment date
immediately following the date of such payment) to the redemption of Securities
of such series at the Redemption Price specified in such Securities with respect
to the sinking fund. Any sinking fund moneys not so applied or allocated by the
Trustee (or, if the Corporation is acting as its own Paying Agent, segregated
and held in trust by the Corporation as provided in Section 1003) for such
series and together with such payment (or such amount so segregated) shall be
applied in accordance with the provisions of this Section 1203. Any and all
sinking fund moneys with respect to the Securities of any particular series held
by the Trustee (or if the Corporation is acting as its own Paying Agent,
segregated and held in trust as provided in Section 1003) on the last sinking
fund payment date with respect to Securities of such series and not held for the
payment or redemption of particular Securities of such series shall be applied
by the Trustee (or by the Corporation if the Corporation is acting as its own
Paying Agent), together with other moneys, if necessary, to be deposited (or
segregated) sufficient for the purpose, to the payment of the principal of the
Securities of such series at Maturity. The Trustee shall select the Securities
to be redeemed upon such sinking fund payment date in the manner specified in
Section 1103 and cause notice of the redemption thereof to be given in the name
of and at the expense of the Corporation 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 Section 1106. On or before each
sinking fund payment date, the Corporation shall pay to the Trustee (or, if the
Corporation is acting as its own Paying Agent, the Corporation shall segregate
and hold in trust as provided in Section 1003) in cash a sum in the currency in
which Securities of such series are payable (except as provided pursuant to
Section 301) equal to the principal and any premium and interest (including any
Additional Interest) accrued to the Redemption Date for Securities or portions
thereof to be redeemed on such sinking fund payment date pursuant to this
Section 1203.
Neither the Trustee nor the Corporation shall redeem any Securities of a
series with sinking fund moneys or mail any notice of redemption of Securities
of such series by operation of the sinking fund for such series during the
continuance of a default in payment
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of interest, if any, on any Securities of such series or of any Event of Default
(other than an Event of Default occurring as a consequence of this paragraph)
with respect to the Securities of such series, except that if the notice of
redemption shall have been provided in accordance with the provisions hereof,
the Trustee (or the Corporation, if the Corporation is then acting as its own
Paying Agent) shall redeem such Securities if cash sufficient for that purpose
shall be deposited with the Trustee (or segregated by the Corporation) for that
purpose in accordance with the terms of this Article XII. Except as aforesaid,
any moneys in the sinking fund for such series at the time when any such default
or Event of Default shall occur and any moneys thereafter paid into such sinking
fund shall, during the continuance of such default or Event of Default, be held
as security for the payment of the Securities and coupons, if any, of such
series; provided, however, that in case such default or Event of Default shall
have been cured or waived herein, such moneys shall thereafter be applied on the
next sinking fund payment date for the Securities of such series on which such
moneys may be applied pursuant to the provisions of this Section 1203.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option at any time, to have Section 1302 or
Section 1303 applied to any Securities or any series of Securities, as the case
may be, designated pursuant to Section 301 as being defeasible pursuant to such
Section 1302 or 1303, in accordance with any applicable requirements provided
pursuant to Section 301 and upon compliance with the conditions set forth below
in this Article. Any such election shall be evidenced by a Board Resolution.
SECTION 1302. Defeasance and Discharge.
Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, the
Company shall be deemed to have been discharged from its obligations with
respect to such Securities as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called
"Defeasance"). For this purpose, such Defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by such
Securities and to have satisfied all its other obligations under such Securities
and this Indenture insofar as such Securities are concerned (and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder: (1) the rights of Holders of such Securities 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
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principal of and any premium and interest on such Securities when payments are
due, (2) the Company's obligations with respect to such Securities under
Sections 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (4) this Article. Subject to compliance
with this Article, the Company may exercise its option (if any) to have this
Section applied to any Securities notwithstanding the prior exercise of its
option (if any) to have Section 1303 applied to such Securities.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, (1)
the Company shall be released from its obligations under Section 801(3) and any
covenants provided pursuant to Section 301(18), 901(2), 901(6) or 901(7) for the
benefit of the Holders of such Securities and (2) the occurrence of any event
specified in Sections 501(4) (with respect to any of Section 801(3) and any such
covenants provided pursuant to Section 301(18), 901(2), 901(6) or 901(7)),
501(5) and 501(8) shall be deemed not to be or result in an Event of Default, in
each case with respect to such Securities as provided in this Section on and
after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that, with respect to such Securities, 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 specified Section (to the extent so specified
in the case of Section 501(4)), whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or by reason of any reference in
any such Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section 1302
or Section 1303 to any Securities or any series of Securities, as the case may
be:
(1) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee which satisfies the requirements
contemplated by Section 609 and agrees to comply with the provisions of this
Article 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 benefits of the Holders of such Securities, (A) money in an
amount or (B) 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, in each case 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 any such other
qualifying trustee) to pay and discharge, the
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principal of and any premium and interest on such Securities on the
respective Stated Maturities or Redemption Dates in accordance with the terms
of this Indenture and such Securities. As used herein, "Government
Obligation" means (x) any security which is (i) a direct obligation of the
United States of America or the government that issued the foreign currency
in which such Securities are or may be payable for the payment of which the
full faith and credit of the United States of America or such foreign
government is pledged or (ii) an obligation of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America or such foreign government the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America or such foreign government, which, in either case (i) or (ii), is not
callable or redeemable at the option of the issuer thereof, and (y) any
depositary receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any Government Obligation which
is specified in Clause (x) above and held by such bank for the account of the
holder of such depositary receipt, or with respect to any specific payment of
principal of or interest on any Government Obligation which is so specified
and held, provided, however, that (except as required by law) such custodian
is not authorized to make any deduction from the amount payable to the holder
of such depositary receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of principal or
interest evidenced by such depositary receipt.
(2) In the event of an election to have Section 1302 apply to any
Securities or any series of Securities, as the case may be, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (A) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this instrument, there has
been a change in the applicable Federal income tax law, in either case (A) or
(B) to the effect that, and based thereon such opinion shall confirm that,
the Holders of such Securities will not recognize gain or loss for Federal
income tax purposes as a result of the deposit, Defeasance and discharge to
be effected with respect to such Securities and will be subject to Federal
income tax on the same amounts, in the same manner and at the same times as
would be the case if such deposit, Defeasance and discharge were not to
occur.
(3) In the event of an election to have Section 1303 apply to any
Securities or any series of Securities, as the case may be, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Securities will not recognize gain or loss for Federal income
tax purposes as a result of the deposit and Covenant Defeasance to be
effected with respect to such Securities and will be subject to Federal
income tax on the same amounts, in the same manner and at the same times as
would be the case if such deposit and Covenant Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities exchange,
will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities shall have
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occurred and be continuing at the time of such deposit or, with regard to any
such event specified in Sections 501(6) and (7), at any time on or prior to
the 90th day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee to
have a conflicting interest within the meaning of the Trust Indenture Act
(assuming all Securities are in default within the meaning of such Act).
(7) Such Defeasance or Covenant Defeasance shall not result in the trust
arising from such deposit constituting an investment company within the
meaning of the Investment Company Act unless such trust shall be registered
under such Act or exempt from registration thereunder.
(8) If the money and/or Government Obligations deposited in trust pursuant
to this Section are sufficient to pay and discharge such Securities on a
Redemption Date, then at or prior to the time of such deposit, either notice
of such redemption shall have been given in accordance with Section 1104 or
the Company shall have irrevocably instructed the Trustee to give such notice
of redemption and arrangements satisfactory to the Trustee for the giving of
such notice by the Trustee in the name, and at the expense, of the Company
shall have been made.
(9) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 1305. Deposited Money and Government Obligations to Be Held in Trust;
Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all money
and Government Obligations (including the proceeds thereof) deposited with the
Trustee or other qualifying trustee (solely for purposes of this Section and
Section 1306, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 1304 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal
and any premium and interest, but money so held in trust need not be segregated
from other funds except to the extent required by law.
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The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the 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 Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations held by it as provided in Section 1304 with
respect to any Securities 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 the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.
SECTION 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1302 or 1303 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1305 with respect to such Securities
in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.
SECTION 1307. Qualifying Trustee.
Any trustee appointed pursuant to Section 1304 for the purpose of holding
trust funds deposited pursuant to that Section shall be appointed under an
agreement in form acceptable to the Trustee and shall provide to the Trustee a
certificate of such trustee, upon which certificate the Trustee shall be
entitled to conclusively rely, that all conditions precedent provided for herein
to the related Defeasance or Covenant Defeasance have been complied with. In no
event shall the Trustee be liable for any acts or omissions of said trustee.
-----------------------------
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.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
EVEREST REINSURANCE HOLDINGS, INC.
By
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Attest:
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THE CHASE MANHATTAN BANK
By
----------------------------------
Attest:
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STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the .... day of ..........., ...., before me personally came
..........................., to me known, who, being by me duly sworn, did
depose and say that he is .................... of ...................., one of
the corporations described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
............................
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the .... day of ..........., ...., before me personally came
..........................., to me known, who, being by me duly sworn, did
depose and say that he is .................... of ......................., one
of the corporations described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation; and that he signed his name thereto by
like authority.
............................
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EXHIBIT 4.2
S&C Draft of October 13, 1999
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EVEREST REINSURANCE HOLDINGS, INC.
to
THE CHASE MANHATTAN BANK
as Trustee
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JUNIOR SUBORDINATED INDENTURE
Dated as of ________ __, 1999
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<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions.....................................................1
SECTION 1.2. Compliance Certificate and Opinions.............................9
SECTION 1.3. Forms of Documents Delivered to Trustee........................10
SECTION 1.4. Acts of Holders................................................11
SECTION 1.5. Notices, Etc. to Trustee and Corporation.......................13
SECTION 1.6. Notice to Holders; Waiver......................................13
SECTION 1.7. Conflict with Trust Indenture Act..............................13
SECTION 1.8. Effect of Headings and Table of Contents.......................13
SECTION 1.9. Successors and Assigns.........................................14
SECTION 1.10. Separability Clause...........................................14
SECTION 1.11. Benefits of Indenture.........................................14
SECTION 1.12. Governing Law.................................................14
SECTION 1.13. Non-Business Days.............................................14
SECTION 1.14. Indenture and Securities Solely Corporate Obligations.........14
ARTICLE II SECURITY FORMS
SECTION 2.1. Forms Generally................................................15
SECTION 2.2. Form of Face of Security.......................................15
SECTION 2.3. Form of Reverse of Security....................................18
SECTION 2.4. Additional Provisions Required in Global Security..............21
SECTION 2.5. Form of Trustee's Certificate of Authentication................21
ARTICLE III THE SECURITIES
SECTION 3.1. Title and Terms................................................21
SECTION 3.2. Denominations..................................................24
SECTION 3.3. Execution, Authentication, Delivery and Dating.................24
SECTION 3.4. Temporary Securities...........................................26
SECTION 3.5. Global Securities..............................................26
SECTION 3.6. Registration, Transfer and Exchange Generally..................27
SECTION 3.7. Mutilated, Destroyed, Lost and Stolen Securities...............28
SECTION 3.8. Payment of Interest and Additional Interest; Interest Rights
Preserved.................................................29
SECTION 3.9. Persons Deemed Owners.........................................30
SECTION 3.10. Cancellation..................................................31
SECTION 3.11. Computation of Interest.......................................31
SECTION 3.12. Deferrals of Interest Payment Dates...........................31
SECTION 3.13. Right of Set-Off..............................................32
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SECTION 3.14. Agreed Tax Treatment..........................................33
SECTION 3.15. Shortening of Stated Maturity.................................33
SECTION 3.16. CUSIP Numbers.................................................33
ARTICLE IV SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture........................33
SECTION 4.2. Application of Trust Money.....................................35
ARTICLE V REMEDIES
SECTION 5.1. Events of Default..............................................35
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.............36
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee...................................................37
SECTION 5.4. Trustee May File Proofs of Claim...............................38
SECTION 5.5. Trustee May Enforce Claim Without Possession of Securities.....39
SECTION 5.6. Application of Money Collected.................................39
SECTION 5.7. Limitation on Suits............................................39
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium
and Interest; Direct Action by Holders of Preferred
Securities................................................40
SECTION 5.9. Restoration of Rights and Remedies.............................40
SECTION 5.10. Rights and Remedies Cumulative................................41
SECTION 5.11. Delay or Omission Not Waiver..................................41
SECTION 5.12. Control by Holders............................................41
SECTION 5.13. Waiver of Past Defaults.......................................41
SECTION 5.14. Undertaking for Costs.........................................42
SECTION 5.15. Waiver of Usury, Stay or Extension Laws.......................42
ARTICLE VI THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities............................43
SECTION 6.2. Notice of Defaults.............................................43
SECTION 6.3. Certain Rights of Trustee......................................43
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.........44
SECTION 6.5. May Hold Securities............................................45
SECTION 6.6. Money Held in Trust............................................45
SECTION 6.7. Compensation and Reimbursement.................................45
SECTION 6.8. Disqualification; Conflicting Interests........................46
SECTION 6.9. Corporate Trustee Required; Eligibility........................46
SECTION 6.10. Resignation and Removal; Appointment of Successor.............46
SECTION 6.11. Acceptance of Appointment by Successor........................47
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business...48
SECTION 6.13. Preferential Collection of Claims Against Corporation.........49
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SECTION 6.14. Appointment of Authenticating Agent...........................49
ARTICLE VII HOLDER'S LISTS AND REPORTS BY TRUSTEE AND CORPORATION
SECTION 7.1. Corporation to Furnish Trustee Names and Addresses of Holders..50
SECTION 7.2. Preservation of Information, Communications to Holders.........51
SECTION 7.3. Reports by Trustee.............................................51
SECTION 7.4. Reports by Corporation.........................................51
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Corporation May Consolidate, Etc., Only on Certain Terms.......52
SECTION 8.2. Successor Corporation Substituted..............................52
ARTICLE IX SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures without Consent of Holders.............53
SECTION 9.2. Supplemental Indentures with Consent of Holders................54
SECTION 9.3. Execution of Supplemental Indentures...........................55
SECTION 9.4. Effect of Supplemental Indentures..............................55
SECTION 9.5. Conformity with Trust Indenture Act............................56
SECTION 9.6. Reference in Securities to Supplemental Indentures.............56
ARTICLE X COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest....................56
SECTION 10.2. Maintenance of Office or Agency...............................56
SECTION 10.3. Money for Security Payments to be Held in Trust...............57
SECTION 10.4. Statement as to Compliance....................................58
SECTION 10.5. Waiver of Certain Covenants...................................58
SECTION 10.6. Additional Sums...............................................58
SECTION 10.7. Additional Covenants..........................................59
SECTION 10.8. Original Issue Discount.......................................59
ARTICLE XI REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of This Article.................................60
SECTION 11.2. Election to Redeem; Notice to Trustee.........................60
SECTION 11.3. Selection of Securities to be Redeemed........................60
SECTION 11.4. Notice of Redemption..........................................61
SECTION 11.5. Deposit of Redemption Price...................................62
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SECTION 11.6. Payment of Securities Called for Redemption...................62
SECTION 11.7. Right of Redemption of Securities Initially Issued to an
Issuer Trust..............................................63
ARTICLE XII SINKING FUNDS
SECTION 12.1. Applicability of Article......................................63
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities.........63
SECTION 12.3. Redemption of Securities for Sinking Fund.....................64
ARTICLE XIII DEFEASANCE AND COVENANT DEFEASANCE
SECTION 13.1. Company's Option to Effect Defeasance or Covenant
Defeasance................................................65
SECTION 13.2. Defeasance and Discharge......................................65
SECTION 13.3. Covenant Defeasance...........................................66
SECTION 13.4. Conditions to Defeasance or Covenant Defeasance...............66
SECTION 13.5. Deposited Money and Government Obligations to Be Held in
Trust; Miscellaneous Provisions...........................68
SECTION 13.6. Reinstatement.................................................69
SECTION 13.7. Qualifying Trustee............................................69
ARTICLE XIV SUBORDINATION OF SECURITIES
SECTION 14.1. Securities Subordinate to Senior Indebtedness.................69
SECTION 14.2. No Payment When Senior Indebtedness in Default; Payment
Over of Proceeds Upon Dissolution, Etc....................69
SECTION 14.3. Payment Permitted If No Default...............................71
SECTION 14.4. Subrogation to Rights of Holders of Senior Indebtedness.......71
SECTION 14.5. Provisions Solely to Define Relative Rights...................72
SECTION 14.6. Trustee to Effectuate Subordination...........................72
SECTION 14.7. No Waiver of Subordination Provisions.........................72
SECTION 14.8. Notice to Trustee.............................................73
SECTION 14.9. Reliance on Judicial Order or Certificate of Liquidating
Agent.....................................................73
SECTION 14.10. Trustee Not Fiduciary for Holders of Senior Indebtedness.....73
SECTION 14.11. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights..........................74
SECTION 14.12. Article Applicable to Paying Agents..........................74
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JUNIOR SUBORDINATED INDENTURE, dated as of ________ __, 1999, between
EVEREST REINSURANCE HOLDINGS, INC., a Delaware corporation (the "Corporation"),
having its principal office at 477 Martinsville Road, P.O. Box 830, Liberty
Corner, New Jersey 07938, and THE CHASE MANHATTAN BANK, a New York banking
corporation, as Trustee (the "Trustee").
RECITALS OF THE CORPORATION
WHEREAS, the Corporation has duly authorized the execution and delivery
of this Indenture to provide for the issuance from time to time of its unsecured
junior subordinated debt securities in series (hereinafter called the
"Securities") of substantially the tenor hereinafter provided, including
Securities issued to evidence loans made to the Corporation of the proceeds from
the issuance from time to time by one or more business trusts (each an "Issuer
Trust") of undivided preferred beneficial interests in the assets of such Issuer
Trusts (the "Preferred Securities") and undivided common beneficial interests in
the assets of such Issuer Trusts (the "Common Securities" and, collectively with
the Preferred Securities, the "Trust Securities"), and to provide the terms and
conditions upon which the Securities are to be authenticated, issued and
delivered; and
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Corporation, 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 covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of any
series thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(2) All other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
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(3) The words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation";
(4) All accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with United States generally
accepted accounting principles;
(5) Whenever the context may require, any gender shall be
deemed to include the others;
(6) Unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Indenture; and
(7) The words "hereby", "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision.
"Act" when used with respect to any Holder has the meaning specified in
Section 1.4.
"Additional Interest" means the interest, if any, that shall accrue on
any interest on the Securities of any series the payment of which has not been
made on the applicable Interest Payment Date and which shall accrue at the rate
per annum specified or determined as specified in such Security.
"Additional Sums" has the meaning specified in Section 10.6.
"Additional Taxes" means, in the case of Securities of a series
initially issued to an Issuer Trust, taxes, duties or other governmental charges
imposed on the Issuer Trust as a result of a Tax Event (which, for the sake of
clarity, does not include amounts required to be deducted or withheld by the
Issuer Trust from payments made by the Issuer Trust to or for the benefit of the
Holder of, or any Person that acquires a beneficial interest in, the
Securities).
"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.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.
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"Bankruptcy Code" means Title 11 of the United States Code or any
successor statute thereto, in each case as amended from time to time.
"Board of Directors" means the board of directors of the Corporation or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Corporation 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" means any day other than (i) a Saturday or Sunday, (ii)
a day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed, or (iii) a day on which the
Corporate Trust Office of the Trustee, or, with respect to the Securities of a
series initially issued to an Issuer Trust for so long as such Securities are
held by such Issuer Trust, the "Corporate Trust Office" (as defined in the
related Trust Agreement) of the Property Trustee or the Delaware Trustee under
the related Trust Agreement, is closed for business.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this 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 on such date.
"Common Securities" has the meaning specified in the first recital of
this Indenture.
"Common Stock" means the common stock, par value $0.01 per share, of
the Corporation.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of this Indenture is located at 379 Thornall Street,
12th Floor, Edison, New Jersey 08837, Attention: Capital Markets Fiduciary
Services.
"corporation" includes a corporation, association, company, limited
liability company, joint-stock company or business trust.
"Corporation" means the Person named as the "Corporation" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Corporation" shall mean such successor corporation.
"Corporation Request" and "Corporation Order" mean, respectively, the
written request or order signed in the name of the Corporation by its Chairman
of the Board of Directors, its Vice Chairman of the Board of Directors, its
President or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Debt" means, with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent and without
duplication, (i) every obligation of such Person for money borrowed; (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other
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similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses; (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person; (iv)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business); (v) every capital lease
obligation of such Person; (vi) all indebtedness of the Corporation, whether
incurred on or prior to the date of this 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; (vii) every obligation of the type referred to in clauses (i)
through (vi) of another Person and all dividends of another Person the payment
of which, in either case, such Person has guaranteed or is responsible or liable
for, directly or indirectly, as obligor or otherwise; and (viii) any renewals,
extensions, refundings, amendments or modifications of any obligation of the
type referred to in clauses (i) through (vii).
"Defaulted Interest" has the meaning specified in Section 3.8.
"Delaware Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Delaware Trustee" in the related Trust Agreement, solely in
its capacity as Delaware Trustee of such Issuer Trust under such Trust Agreement
and not in its individual capacity, or its successor in interest in such
capacity, or any successor Delaware trustee appointed as therein provided.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, a clearing agency registered under the Exchange Act that is
designated as Depositary by the Corporation pursuant to Section 3.1 with respect
to such Securities (or any successor thereto).
"Discount Security" means any security that provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.
"Distributions," with respect to the Trust Securities issued by an
Issuer Trust, means amounts payable in respect of such Trust Securities as
provided in the related Trust Agreement and referred to therein as
"Distributions."
"Dollar" or "$" means the currency of the United States of America
that, as at the time of payment, is legal tender for the payment of public and
private debts.
"Event of Default", unless otherwise specified with respect to a series
of Securities as contemplated by Section 3.1, has the meaning specified in
Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934 or any statute
successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.4.
"Extension Period" has the meaning specified in Section 3.12.
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"Global Security" means a Security that evidences all or part of a
series of Securities and that bears the legend set forth in Section 2.4 (or such
legend as may be specified as contemplated by Section 3.1), issued to the
Depositary or its nominee for such series, and registered in the name of such
Depositary or its nominee.
"Guarantee Agreement" means, with respect to any Issuer Trust, the
Guarantee Agreement executed by the Corporation for the benefit of the Holders
of the Preferred Securities issued by such Issuer Trust as modified, amended or
supplemented from time to time.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be amended or supplemented by one or more amendments
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof including, for all purposes of this instrument and any such
amendment or supplemental indenture, the provisions of the Trust Indenture Act
that are deemed to be a part of and govern this instrument any such amendment or
supplemental indenture, respectively. The term "Indenture" shall also include
the terms of each particular series of Securities established as contemplated by
Section 3.1.
"Interest Payment Date" means, as to each series of Securities, the
Stated Maturity of an installment of interest on such Securities.
"Investment Company Act" means the Investment Company Act of 1940 or
any successor statute thereto, in each case as amended from time to time.
"Investment Company Event" means the receipt by an Issuer Trust 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, there is more than an insubstantial risk that such Issuer
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 issuance of the Preferred Securities of such Issuer Trust.
"Issuer Trust" has the meaning specified in the first recital of this
Indenture.
"Maturity" when used with respect to any Security means the date on
which the principal of such Security or any 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.
"Notice of Default" means a written notice of the kind specified in
Section 5.1(3).
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, 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 Corporation and delivered to the Trustee.
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"Opinion of Counsel" means a written opinion of counsel who may be
counsel for or an employee of the Corporation or any Affiliate of the
Corporation.
"Original Issue Date" means the date of issuance specified as such in
each Security.
"Outstanding" means, when used in reference to any Securities, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption 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; provided, however,
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; and
(iii) Securities in substitution for or in lieu of which other
Securities have been authenticated and delivered or that have been paid
pursuant to Section 3.7, unless proof satisfactory to the Trustee is
presented that any such Securities are held by Holders in whose hands
such Securities are valid, binding and legal obligations of the
Corporation;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Corporation or any other obligor upon the Securities or any Affiliate of
the Corporation or 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, only Securities that a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Securities so owned that
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 Corporation or
any other obligor upon the Securities or any Affiliate of the Corporation or
such other obligor. Upon the written request of the Trustee, the Corporation
shall furnish to the Trustee promptly an Officers' Certificate listing and
identifying all Securities, if any, known by the Corporation to be owned or held
by or for the account of the Corporation, or any other obligor on the Securities
or any Affiliate of the Corporation or such obligor, and subject to the
provisions of Section 6.1, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Securities not listed therein are Outstanding for the
purpose of any such determination. Notwithstanding anything herein to the
contrary, Securities of any series initially issued to an Issuer Trust that are
owned by such Issuer Trust shall be deemed to be Outstanding notwithstanding the
ownership by the Corporation or an Affiliate of any beneficial interest in such
Issuer Trust.
"Paying Agent" means the Trustee or any Person authorized by the
Corporation to pay the principal of or any premium or interest on, or other
amounts in respect of, any Securities on behalf of the Corporation.
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"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Place of Payment" means, with respect to the Securities of any series,
the place or places where the principal of and any premium and interest on the
Securities of such series are payable pursuant to Section 3.1.
"Preferred Securities" has the meaning specified in the first recital
of this Indenture.
"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. For the purposes of this definition, any security
authenticated and delivered under Section 3.7 in lieu of a mutilated, destroyed,
lost or stolen Security shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Security.
"Proceeding" has the meaning specified in Section 14.2.
"Property Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Property Trustee" in the related Trust Agreement, solely in
its capacity as Property Trustee of such Issuer Trust under such Trust Agreement
and not in its individual capacity, or its successor in interest in such
capacity, or any successor property trustee appointed as therein provided.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of such series, the date that
is fifteen days next preceding such Interest Payment Date (whether or not a
Business Day).
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
senior trust officer, any assistant cashier, any trust officer or assistant
trust officer, the controller or any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers 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.
"Rights Plan" means a plan of the Corporation providing for the
issuance by the Corporation to all holders of its Common Stock, par value $0.01
per share, of rights entitling the holders thereof to
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subscribe for or purchase shares of any class or series of capital stock of the
Corporation which rights (i) are deemed to be transferred with such shares of
such Common Stock, and (ii) are also issued in respect of future issuances of
such Common Stock, in each case until the occurrence of a specified event or
events.
"Securities" or "Security" means any debt securities or debt security,
as the case may be, authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933 or any successor
statute thereto, in each case as amended from time to time.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.6.
"Senior Indebtedness" means the principal of and any premium and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Corporation whether
or not such claim for post-petition interest is allowed in such proceeding) on
all Debt of the Corporation, whether incurred on or prior to the date of this
Indenture or thereafter incurred, unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are not superior in right of payment to the Securities or
to other Debt that is pari passu with, or subordinated to, the Securities,
provided, however, that Senior Indebtedness shall not be deemed to include (a)
any Debt of the Corporation that, when incurred and without respect to any
election under Section 1111(b) of the Bankruptcy Reform Act of 1978, was without
recourse to the Corporation, (b) any Debt of the Corporation to any of its
Subsidiaries, (c) any Debt of the Corporation to any employee of the
Corporation, (d) any Securities, (e) trade accounts payable of the Corporation,
and (f) accrued liabilities arising in the ordinary course of business of the
Corporation.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.8.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or any premium or interest (including any
Additional Interest) thereon, means the date specified pursuant to the terms of
such Security as the fixed date on which the principal of such Security or such
installment of principal or any premium or interest (including any Additional
Interest) is due and payable, as such date may, in the case of the stated
maturity of the principal on any security, be shortened or extended as provided
pursuant to the terms of such Security and this Indenture and, in the case of
any installment of interest, subject to the deferral of any such date in the
case of any Extension Period.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Corporation or by
one or more other Subsidiaries, or by the Corporation and one or more other
Subsidiaries. For purposes of this definition, "voting stock" means stock that
ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of
any contingency.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the
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purposes of this definition, any Security authenticated and delivered under
Section 3.7 in exchange for or in lieu of a mutilated, destroyed, lost or stolen
Security shall be deemed to evidence the same debt as the mutilated, destroyed,
lost or stolen Security.
"Tax Event" means the receipt by an Issuer Trust of an Opinion of
Counsel experienced in such matters to the effect that, as a result of (a) 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 (b) any judicial decision or any
official administrative pronouncement (including any private letter ruling,
technical advice memorandum or field service advice) or regulatory procedure (an
"Administrative Action"), regardless of whether such judicial decision or
Administrative Action is issued to or in connection with a proceeding involving
the Corporation or such Issuer Trust and whether or not subject to review or
appeal, which amendment, change, Administrative Action or decision is enacted,
promulgated or announced, in each case, on or after the date hereof, there is
more than an insubstantial risk that (i) such Issuer 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 held by such Issuer
Trust, (ii) interest payable by the Corporation or original issue discount
accruing on such securities is not, or within 90 days of the date of such
opinion, will not be, deductible by the Corporation, in whole or in part, for
United States Federal income tax purposes, or (iii) such Issuer 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.
"Trust Agreement" means, with respect to any Issuer Trust, the trust
agreement or other governing instrument of such Issuer Trust.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument, solely in its capacity as such and not in its
individual capacity, 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 (15 U.S.C.
Sections 77aaa-77bbb), as amended and as in effect on the date as of this
Indenture, except as provided in Section 9.5.
"Trust Securities" has the meaning specified in the first recital of
this Indenture.
"Vice President," when used with respect to the Corporation, means any
duly appointed vice president, whether or not designated by a number or a word
or words added before or after the title "vice president."
SECTION 1.2. Compliance Certificate and Opinions.
Upon any application or request by the Corporation to the Trustee to
take any action under any provision of this Indenture, the Corporation shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent (including covenants compliance with which constitutes a condition
precedent), if any, provided for in this Indenture relating to the proposed
action have been complied with
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and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent (including covenants compliance with which constitutes a
condition precedent), if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 10.4) shall include:
(1) a statement by each individual signing such certificate or opinion
that such individual 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 of such individual contained
in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he or she has
made such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether, in the opinion of such individual, such
condition or covenant has been complied with.
SECTION 1.3. Forms of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Corporation 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 after reasonable
inquiry should know, that the certificate or opinion or representations with
respect to matters upon which his or her 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 Corporation stating that the
information with respect to such factual matters is in the possession of the
Corporation, unless such counsel knows, or after reasonable inquiry 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.
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Whenever, subsequent to the receipt by the Trustee of any Board
Resolution, Officers' Certificate, Opinion of Counsel or other document or
instrument, a clerical, typographical or other inadvertent or unintentional
error or omission shall be discovered therein, a new document or instrument may
be substituted therefor in corrected form with the same force and effect as if
originally filed in the corrected form and, irrespective of the date or dates of
the actual execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered as of the date
or dates required with respect to the document or instrument for which it is
substituted. Without limiting the generality of the foregoing, any Securities
issued under the authority of such defective document or instrument shall
nevertheless be the valid obligations of the Corporation entitled to the
benefits of this Indenture equally and ratably with all other Outstanding
Securities.
SECTION 1.4. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given to or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments is or are
delivered to the Trustee, and, where it is hereby expressly required, to the
Corporation. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.1) conclusive in favor of
the Trustee and the Corporation, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him or her the execution thereof.
Where such execution is by a Person acting in other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner that the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the Securities
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done or suffered to be done by the Trustee or the
Corporation in reliance thereon, whether or not notation of such action is made
upon such Security.
(f) The Corporation may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given,
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made or taken by Holders of Securities of such series, provided, however, that
the Corporation may not set a record date for, and the provisions of this
paragraph shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next succeeding paragraph.
If any record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date, provided, however, that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date (as defined below) by Holders of the requisite principal amount
of Outstanding Securities of such series on such record date. Nothing in this
paragraph shall be construed to prevent the Corporation from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Corporation, at its
own expense, shall cause notice of such record date, the proposed action by
Holders and the applicable Expiration Date to be given to the Trustee in writing
and to each Holder of Securities of the relevant series in the manner set forth
in Section 1.6.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2), or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date, provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Corporation's expense, shall
cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Corporation in writing and to each
Holder of Securities of the relevant series in the manner set forth in Section
1.6.
With respect to any record date set pursuant to this Section, the party
hereto that sets such record date may designate any day as the "Expiration Date"
and from time to time may change the Expiration Date to any earlier or later
day, provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 1.6, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto that set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change
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the Expiration Date as provided in this paragraph. Notwithstanding the
foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.
(g) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 1.5. Notices, Etc. to Trustee and Corporation.
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, any holder of Preferred Securities or
the Corporation 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, or
(2) the Corporation by the Trustee, any Holder or any holder of
Preferred Securities shall be sufficient for every purpose (except as otherwise
provided in Section 5.1) hereunder if in writing and mailed, first class,
postage prepaid, to the Corporation addressed to it at the address of its
principal office specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by the Corporation.
SECTION 1.6. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class postage prepaid, to each Holder affected
by such event, at the address of such Holder as it appears in the Securities
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. If, by reason of the suspension
of or irregularities in regular mail service or for any other reason, it shall
be impossible or impracticable to mail notice of any event to Holders when said
notice is required to be given pursuant to any provision of this Indenture or of
the relevant Securities, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. 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 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 1.7. Conflict with Trust Indenture Act.
If any provision of this Indenture 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, the latter provision
shall control. If any provision of this Indenture modifies or excludes any
provision of the
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Trust Indenture Act which 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 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by the Corporation shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause.
If any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors and
assigns, the holders of Senior Indebtedness, the Holders of the Securities and,
to the extent expressly provided in Sections 5.2, 5.8, 5.9, 5.11, 5.13, 9.1 and
9.2, the holders of Preferred Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAWS PROVISIONS THEREOF.
SECTION 1.13. Non-Business Days.
If any Interest Payment Date, Redemption Date or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or the Securities) payment of interest or principal (and
premium, if any) or other amounts in respect of such Security need not be made
on such date, but may be made on the next succeeding Business Day (and no
interest shall accrue in respect of the amounts whose payment is so delayed for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, until such next succeeding Business Day) except
that, if such Business Day falls in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day (in each case
with the same force and effect as if made on the Interest Payment Date or
Redemption Date or at the Stated Maturity).
SECTION 1.14. Indenture and Securities Solely Corporate Obligations.
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No recourse for the payment of the principal of or any premium 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 Corporation in this Indenture or in any supplemental 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 Corporation or of any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as consideration for, the execution of this Indenture and the
issue of the Securities.
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article, or
in such other form or forms as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with applicable tax laws or the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Corporation and delivered to the Trustee at or prior to the delivery of the
Corporation Order contemplated by Section 3.3 with respect to the authentication
and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such securities.
SECTION 2.2. Form of Face of Security.
EVEREST REINSURANCE HOLDINGS, INC.
[Title of Security]
No. $
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EVEREST REINSURANCE HOLDINGS, INC., a corporation organized and
existing under the laws of Delaware (hereinafter called the "Corporation", which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to _______________, or registered
assigns, the principal sum of __________ Dollars on __________ __, ___ [if the
Security is a Global Security, then insert, if applicable--, or such other
principal amount represented hereby as may be set forth in the records of the
Securities Registrar hereinafter referred to in accordance with the Indenture,]
[; provided, however, that the Corporation may shorten the Stated Maturity of
the principal of this Security to a date not earlier than ________ at any time
on one or more occasions, subject to certain conditions specified in Section
3.15 of the Indenture. The Corporation further promises to pay interest on said
principal sum from , or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, [quarterly] [semi-annually] [if
applicable, insert--(subject to deferral as set forth herein)] in arrears on
[insert applicable Interest Payment Dates] of each year, commencing , , at the
rate of % per annum, [if applicable insert--together with Additional Sums, if
any, as provided in Section 10.6 of the Indenture] until the principal hereof is
paid or duly provided for or made available for payment [if applicable, insert--
; provided, however, that any overdue principal, premium or Additional Sums and
any overdue installment of interest shall bear Additional Interest at the rate
of % per annum (to the extent that the payment of such interest shall be legally
enforceable), compounded [quarterly] [semi-annually], from the dates such
amounts are due until they are paid or made available for payment, and such
interest shall be payable on demand]. The amount of interest payable for any
period less than a full interest period shall be computed on the basis of a
360-day year of twelve 30-day months and the actual days elapsed in a partial
month in such period. The amount of interest payable for any full interest
period shall be computed by dividing the applicable rate per annum by
[four/two]. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
installment [if applicable insert--, which shall be the [____________ or
____________] (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date]. Any such interest not so punctually paid
or duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
[If applicable, insert--So long as no Event of Default has occurred and
is continuing, the Corporation shall have the right, at any time during the term
of this Security, from time to time to defer the payment of interest on this
Security for up to consecutive [quarterly] [semi-annual] interest payment
periods with respect to each deferral period (each an "Extension Period") [If
applicable, insert--, during which Extension Periods the Corporation shall have
the right to make partial payments of interest on any Interest Payment Date,
and] at the end of which the Corporation shall pay all interest then accrued and
unpaid including any Additional Interest, as provided below; provided, however,
that no Extension Period shall extend beyond the Stated Maturity of the
principal of this Security [If Stated Maturity can be shortened or extended,
insert--, as then in effect,] and no such Extension Period may
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end on a date other than an Interest Payment Date; and provided, further,
however, that during any such Extension Period, the Corporation shall 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 Corporation's capital
stock, or (ii) make any payment of principal of or interest or premium, if any,
on or repay, repurchase or redeem any debt securities of the Corporation that
rank pari passu in all respects with or junior in interest to this Security
(other than (a) repurchases, redemptions or other acquisitions of shares of
capital stock of the Corporation in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of any one or
more employees, officers, directors or consultants, in connection with a
dividend reinvestment or stockholder stock purchase plan or in connection with
the issuance of capital stock of the Corporation (or securities convertible into
or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Corporation's
capital stock (or any capital stock of a Subsidiary of the Corporation) for any
class or series of the Corporation's capital stock or of any class or series of
the Corporation's indebtedness for any class or series of the Corporation's
capital stock, (c) the purchase of fractional interests in shares of the
Corporation's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any Rights Plan, or the issuance of
rights, stock or other property under any Rights Plan, or the redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same stock as
that on which the dividend is being paid or ranks pari passu with or junior to
such stock). Prior to the termination of any such Extension Period, the
Corporation may further defer the payment of interest, provided, however, that
no Extension Period shall exceed consecutive [quarterly] [semi-annual] interest
payment periods, extend beyond the Stated Maturity of the principal of this
Security or end on a date other than an Interest Payment Date. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due on any Interest Payment
Date, the Corporation may elect to begin a new Extension Period, subject to the
above conditions. No interest shall be due and payable during an Extension
Period, except at the end thereof, but each installment of interest that would
otherwise have been due and payable during such Extension shall bear Additional
Interest (to the extent that the payment of such interest shall be legally
enforceable) at the rate of ____% per annum, compounded [monthly] [quarterly]
[semi-annually] and calculated as set forth in the first paragraph of this
Security, from the dates on which amounts would otherwise have been due and
payable until paid or made available for payment. The Corporation shall give the
Holder of this Security and the Trustee notice of its election to begin any
Extension Period at least one Business Day prior to the next succeeding Interest
Payment Date on which interest on this Security would be payable but for such
deferral [if applicable, insert--or so long as such Securities are held by
[insert name of applicable Issuer Trust], at least one Business Day prior to the
earlier of (i) the next succeeding date on which Distributions on the Preferred
Securities of such Issuer Trust would be payable but for such deferral, and (ii)
the date on which the Administrative Trustee of such Issuer Trust is required to
give notice to holders of such Preferred Securities of the record date or the
date such Distributions are payable].
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Corporation maintained for
that purpose in the [insert Place of Payment], in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts [if applicable, insert--; provided, however, that at
the option of the
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Corporation payment of interest may be made (i) by check mailed to the address
of the Person entitled thereto as such address shall appear in the Securities
Register, or (ii) by wire transfer in immediately available funds at such place
and to such account as may be designated by the Person entitled thereto as
specified in the Securities Register; provided that the Paying Agent shall have
received satisfactory wire transfer instructions at least ___ Business Days
prior to the applicable payment date].
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 actions as may be necessary or appropriate to 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,
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be
duly executed under its corporate seal.
EVEREST REINSURANCE HOLDINGS, INC.
By:
----------------------------------
Name:
Title:
Attest:
- ----------------------------------
[Secretary or Assistant Secretary]
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SECTION 2.3. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Corporation (herein called the "Securities"), issued and to be issued in one or
more series under the Junior Subordinated Indenture, dated as of , 1999 (herein
called the "Indenture"), between the Corporation and THE CHASE MANHATTAN BANK as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Corporation, the Trustee, the
holders of Senior Indebtedness and the Holders of the Securities, and of the
terms upon which the Securities are, and are to be, authenticated and delivered.
This Security is one of the series designated on the face hereof [if applicable,
insert--, limited in aggregate principal amount to $ ].
All terms used in this Security that are defined in the Indenture [if
applicable, insert--or in the Amended and Restated Trust Agreement, dated as of
_________, 199_ (as modified, amended or supplemented from time to time, the
"Trust Agreement"), relating to [insert name of Issuer Trust] (the "Issuer
Trust") among the Corporation, as Depositor, the Trustees named therein and the
Holders from time to time of the Trust Securities issued pursuant thereto,]
shall have the meanings assigned to them in the Indenture [if applicable,
insert--or the Trust Agreement, as the case may be].
[If applicable, insert--The Corporation may at any time, at its option,
on or after _________, ____, and subject to the terms and conditions of Article
XI of the Indenture, redeem this Security in whole at any time or in part from
time to time, at [if applicable, insert-- the following Redemption Prices
(expressed as percentages of the principal amount hereof): If redeemed during
the 12-month period beginning _____________,
Redemption
Year Price
---- ----------
and thereafter at a Redemption Price equal to 100% of the principal amount
hereof, together, in the case of any such redemption, with accrued interest [if
applicable, insert--, including any Additional Interest,] to but excluding the
date fixed for redemption,] [a Redemption Price equal to 100% of the principal
amount hereof, together, in the case of any such redemption, with accrued
interest [if applicable, insert--, including any Additional Interest,] to but
excluding the date fixed for redemption.]
[If applicable, insert--In addition, upon the occurrence and during the
continuation of a Tax Event or an Investment Company Event in respect of the
Issuer Trust, the Corporation may, at its option, at any time within 90 days of
the occurrence and during the continuation of such Tax Event or Investment
Company Event, as the case may be redeem this Security, in whole but not in
part, subject to the terms and conditions of Article XI of the Indenture, at a
redemption price equal to [insert formula].
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[If the Security is subject to redemption of any kind, insert--In the
event of redemption of this Security in part only, a new Security or Securities
of this series for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.]
[If applicable, insert - The Securities of this series are not
redeemable prior to Stated Maturity.]
[The Indenture contains provisions for satisfaction and discharge of
[the entire indebtedness of] [or] [certain restrictive covenants and Events of
Default with respect to] this Security [, in each case] this Security upon
compliance by the Corporation with certain conditions set forth in the
Indenture.]
The Indenture permits, with certain exceptions as therein provided, the
Corporation and the Trustee at any time to enter into a supplemental indenture
or indentures for the purpose of modifying in any manner the rights and
obligations of the Corporation and of the Holders of the Securities, with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series to be affected by such supplemental
indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Corporation with certain provisions of the Indenture
and certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
[If the Security is not a Discount Security, insert--As provided in and
subject to the provisions of the Indenture, if an Event of Default with respect
to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 33% in aggregate principal amount of the Outstanding Securities of this
series may declare the principal amount of all the Securities of this series to
be due and payable immediately, by a notice in writing to the Corporation (and
to the Trustee if given by Holders) [if applicable, insert--, provided, however,
that, if upon an Event of Default, the Trustee or such Holders fail to declare
the principal of all the Outstanding Securities of this series to be immediately
due and payable, the holders of at least 33% in aggregate Liquidation Amount of
the Preferred Securities then Outstanding shall have the right to make such
declaration by a notice in writing to the Corporation and the Trustee]; and upon
any such declaration the principal amount of and the accrued interest (including
any Additional Interest) on all the Securities of this series shall become
immediately due and payable, provided, however, that the payment of principal
and interest (including any Additional Interest) on such Securities shall remain
subordinated to the extent provided in Article XIII of the Indenture.]
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Corporation,
which is absolute and unconditional, to pay the principal of and any premium and
interest [insert if applicable--including any Additional Interest)] on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Corporation maintained under Section 10.2 of the
Indenture for
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such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Corporation and the Securities Registrar
duly executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Securities of this series, of like tenor,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $ and any integral multiple of $____________
in excess thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Corporation may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Corporation, the Trustee and any agent of the Corporation or the
Trustee may treat the Person in whose name this Security is registered as the
owner hereof for all purposes, whether or not this Security be overdue, and
neither the Corporation, the Trustee nor any such agent shall be affected by
notice to the contrary.
The Corporation and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that for United States Federal, state and local
tax purposes it is intended that this Security constitute indebtedness.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
SECTION 2.4. Additional Provisions Required in Global Security.
Unless otherwise specified as contemplated by Section 3.1, any Global
Security issued hereunder shall, in addition to the provisions contained in
Sections 2.2 and 2.3, bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY
OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
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SECTION 2.5. Form of Trustee's Certificate of Authentication.
The Trustee's certificates 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.
Dated:
THE CHASE MANHATTAN BANK,
as Trustee
By:
---------------------------
Authorized officer
ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 3.3,
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 a series:
(a) the title of the securities of such series, which shall
distinguish the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of
the Securities of such series that may be authenticated and delivered
under this Indenture (except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of,
other Securities of the series pursuant to Section 3.4, 3.5, 3.6, 3.7,
9.6 or 11.6 and except for any Securities that, pursuant to Section
3.3, are deemed never to have been authenticated and delivered
hereunder); provided, however, that the authorized aggregate principal
amount of such series may be increased above such amount by a Board
Resolution to such effect;
(c) the Person to whom any interest on a 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;
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<PAGE>
(d) the Stated Maturity or Maturities on which the principal
of the Securities of such series is payable or the method of
determination thereof, and any dates on which or circumstances under
which, the Corporation shall have the right to extend or shorten such
Stated Maturity or Maturities;
(e) the rate or rates at which the Securities of such series
shall bear interest, if any, the rate or rates and extent to which
Additional Interest, if any, shall be payable in respect of any
Securities of such series, the date or dates from which any such
interest or Additional Interest shall accrue, the Interest Payment
Dates on which such interest shall be payable, the right, pursuant to
Section 3.12 or as otherwise set forth therein, of the Corporation to
defer or extend an Interest Payment Date, and the Regular Record Date
for the interest payable on any Interest Payment Date or the method by
which any of the foregoing shall be determined;
(f) the place or places where the principal of and any premium
and interest (including any Additional Interest) on the Securities of
such series shall be payable, the place or places where the Securities
of such series may be presented for registration of transfer or
exchange, any restrictions that may be applicable to any such transfer
or exchange in addition to or in lieu of those set forth herein, and
the place or places where notices and demands to or upon the
Corporation in respect of the Securities of such series may be made;
(g) the period or periods within or the date or dates on
which, if any, the price or prices at which and the terms and
conditions upon which the Securities of such series may be redeemed, in
whole or in part;
(h) the obligation or the right, if any, of the Corporation to
redeem, repay or purchase the Securities of such series pursuant to any
sinking fund, amortization or analogous provisions, or at the option of
a Holder thereof, and the period or periods within which, the price or
prices at which, the currency or currencies (including currency unit or
units) in which and the other terms and conditions upon which
Securities of the series shall be redeemed, repaid or purchased, in
whole or in part, pursuant to such obligation;
(i) the denominations in which any Securities of such series
shall be issuable, if other than denominations of $25 and any integral
multiple thereof;
(j) if other than Dollars, the currency or currencies
(including any currency unit or units) in which the principal of and
any premium and interest and Additional Interest, if any, on the
Securities of the series shall be payable, or in which the Securities
of the series shall be denominated and the manner of determining the
equivalent thereof in Dollars for any purpose including for purposes of
the definition of Outstanding;
(k) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the
Company or the Holder thereof, in one or more currencies or currency
units other than that or those in which such Securities are stated to
be payable, the currency, currencies or currency units in which the
principal of or any premium or interest on such Securities as to which
such election is made shall be payable, the periods within which and
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the terms and conditions upon which such election is to be made and the
amount so payable (or the manner in which such amount shall be
determined);
(l) the additions, modifications or deletions, if any, in the
Events of Default or covenants of the Corporation set forth herein with
respect to the Securities of such series;
(m) if other than the principal amount thereof, the portion of
the principal amount of Securities of such series that shall be payable
upon declaration of acceleration of the Maturity thereof;
(n) if the principal amount payable at the Stated Maturity of
any Securities of the series will not be determinable as of any one or
more dates prior to the Stated Maturity, the amount which shall be
deemed to be the principal amount of such Securities as of any such
date for any purpose thereunder or hereunder, including the principal
amount thereof which shall be due and payable upon any Maturity other
than the Stated Maturity or which shall be deemed to be Outstanding as
of any date prior to the Stated Maturity (or, in any such case, the
manner in which such amount deemed to be the principal amount shall be
determined);
(o) the additions or changes, if any, to this Indenture with
respect to the Securities of such series as shall be necessary to
permit or facilitate the issuance of the Securities of such series in
bearer form, registrable or not registrable as to principal, and with
or without interest coupons;
(p) any index or indices used to determine the amount of
payments of principal of and any premium on the Securities of such
series or the manner in which such amounts will be determined;
(q) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global
Securities and, in such case, the respective Depositaries for such
Global Securities, the form of any legend or legends that shall be
borne by any such Global Security in addition to or in lieu of that set
forth in Section 2.4 and any circumstances in addition to or in lieu of
those set forth in Section 3.5 in which any such Global Security may be
exchanged in whole or in part for Securities registered, and any
transfer of such Global Security in whole or in part may be registered,
in the name or names of Persons other than the Depositary for such
Global Security or a nominee thereof;
(r) the appointment of any Paying Agent or agents for the
Securities of such series;
(s) the terms of any right to convert or exchange Securities
of such series into any other securities or property of the
Corporation, and the additions or changes, if any, to this Indenture
with respect to the Securities of such series to permit or facilitate
such conversion or exchange;
(t) if such Securities are to be issued to an Issuer Trust,
the form or forms of the Trust Agreement, Guarantee Agreement and
Expense Agreement relating thereto;
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(u) if other than as set forth herein, the relative degree, if
any, to which the Securities of the series shall be senior to or be
subordinated to other series of Securities in right of payment, whether
such other series of Securities are Outstanding or not; and
(v) any other terms of the Securities of such series (which
terms shall not be inconsistent with the provisions of this Indenture,
except as permitted by Section 9.1(6)).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided herein or in
or pursuant to such Board Resolution and set forth, or determined in the manner
provided, in such Officers' Certificate or in any 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 Corporation
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms, or the manner of determining the terms, of
the series.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article XIII.
SECTION 3.2. Denominations.
The Securities of each series shall be in registered form without
coupons and shall be issuable in denominations of $25 and any integral multiple
of $25 in excess thereof, unless otherwise specified as contemplated by Section
3.1.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Corporation by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced or impressed thereon
and attested by its Secretary or one of its Assistant Secretaries. The signature
of any of these officers on the Securities may be manual or facsimile.
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<PAGE>
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Corporation shall bind the
Corporation, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities. At any time and from
time to time after the exe cution and delivery of this Indenture, the
Corporation may deliver Securities of any series executed by the Corporation to
the Trustee for authentication, together with a Corporation Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Corporation Order shall authenticate and deliver such Securities. If
the form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 6.1) shall be fully protected in
relying upon, an Opinion of Counsel stating:
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 2.1, that such
form has been established in conformity with the provisions of this
Indenture;
(2) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 3.1, that such
terms have been established in conformity with the provisions of this
Indenture; and
(3) that such Securities, when authenticated and delivered by
the Trustee and issued by the Corporation in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Corporation, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties,
indemnities or immunities under the Securities and this Indenture or otherwise
in a manner that is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Corporation Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers, 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
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shall have been authenticated and delivered hereunder but never issued and sold
by the Corporation, and the Corporation shall deliver such Security to the
Trustee for cancellation as provided in Section 3.10, 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 3.4. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Corporation may execute, and upon Corporation Order the Trustee shall
authenticate and deliver, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any denomination,
substantially of the tenor of the definitive Securities of such series in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Corporation will
cause definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Securities, the temporary Securities
shall be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Corporation designated for that
purpose without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities, the Corporation shall execute and the Trustee
shall authenticate and deliver in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations having the same
Original Issue Date and Stated Maturity and having the same terms as such
temporary Securities. Until so exchanged, the temporary Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series.
SECTION 3.5. Global Securities.
(a) Each Global Security issued under this Indenture shall be
registered in the name of the Depositary designated by the Corporation for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary advises the Trustee and the Corporation in
writing that such Depositary is no longer willing or able to properly discharge
its responsibilities as Depositary with respect to such Global Security, and no
successor is appointed within [90] days of receipt by the Corporation of such
notice, (ii) such Depositary has ceased to be a clearing agency registered under
the Exchange Act and no successor is appointed by the Corporation within 90 days
after such termination, (iii) the Corporation executes and delivers to the
Trustee a Corporation Order stating that the Corporation elects to terminate the
book-entry system through the Depositary, or (iv) there shall have occurred and
be continuing an Event of Default with respect to such Global Security.
(c) If any Global Security is to be exchanged for other Securities or
cancelled in whole, it shall be surrendered by or on behalf of the Depositary or
its nominee to the Securities Registrar for exchange
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or cancellation as provided in this Article III. If any Global Security is to be
exchanged for other Securities or cancelled in part, or if another Security is
to be exchanged in whole or in part for a beneficial interest in any Global
Security, then either (i) such Global Security shall be so surrendered for
exchange or cancellation as provided in this Article III or (ii) the principal
amount thereof shall be reduced or increased by an amount equal to the portion
thereof to be so exchanged or cancelled, or equal to the principal amount of
such other Security to be so exchanged for a beneficial interest therein, as the
case may be, by means of an appropriate adjustment made on the records of the
Securities Registrar, whereupon the Trustee, in accordance with the Applicable
Procedures, shall instruct the Depositary or its authorized representative to
make a corresponding adjustment to its records. Upon any such surrender or
adjustment of a Global Security by the Depositary, accompanied by registration
instructions, the Trustee shall, subject to Section 3.5(b) and as otherwise
provided in this Article III, authenticate and deliver any Securities issuable
in exchange for such Global Security (or any portion thereof) in accordance with
the instructions of the Depositary. The Trustee shall not be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be fully protected in relying on, such instructions.
(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article III, Section 9.6 or 11.6 or otherwise,
shall be authenticated and delivered in the form of, and shall be, a Global
Security, unless such Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof.
(e) Securities distributed to holders of Book-Entry Preferred
Securities (as defined in the applicable Trust Agreement) upon the dissolution
of an Issuer Trust shall be distributed in the form of one or more Global
Securities registered in the name of a Depositary or its nominee, and deposited
with the Securities Registrar, as custodian for such Depositary, or with such
Depositary, for credit by the Depositary to the respective accounts of the
beneficial owners of the Securities represented thereby (or such other accounts
as they may direct). Securities distributed to holders of Preferred Securities
other than Book-Entry Preferred Securities upon the dissolution of an Issuer
Trust shall not be issued in the form of a Global Security or any other form
intended to facilitate book-entry trading in beneficial interests in such
Securities.
(f) The Depositary or its nominee, as the registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security shall be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its Agent Members.
Neither the Trustee nor the Securities Registrar shall have any liability in
respect of any transfers effected by the Depositary.
(g) The rights of owners of beneficial interests in a Global Security
shall be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its Agent Members.
SECTION 3.6. Registration, Transfer and Exchange Generally.
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The Corporation shall cause to be kept at the Corporate Trust Office of
the Trustee a register in which, subject to such reasonable regulations as it
may prescribe, the Corporation shall provide for the registration of Securities
and of transfers of Securities. Such register is herein sometimes referred to as
the "Securities Register". The Trustee is hereby appointed "Securities
Registrar" for the purpose of registering Securities and transfers of Securities
as herein provided.
Upon surrender for registration of transfer of any Security at the
offices or agencies of the Corporation designated for that purpose the
Corporation shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Securities
of the same series of any authorized denominations of like tenor and aggregate
principal amount.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of like tenor and
aggregate principal amount, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any securities are so surrendered for exchange,
the Corporation shall execute, and the Trustee shall authenticate and deliver,
the Securities that the Holder making the exchange is entitled to receive.
All Securities issued upon any transfer or exchange of Securities shall
be the valid obligations of the Corporation, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall
(if so required by the Corporation or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Corporation and the Securities Registrar, duly executed by the Holder thereof or
such Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or
exchange of Securities, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Securities.
Neither the Corporation nor the Trustee shall be required, pursuant to
the provisions of this Section, (i) to issue, register the transfer of or
exchange any Security of any series during a period beginning at the opening of
business 15 days before the day of selection for redemption of Securities of
that series pursuant to Article XI and ending at the close of business on the
day of mailing of the notice of redemption, or (ii) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except,
in the case of any such Security to be redeemed in part, any portion thereof not
to be redeemed.
SECTION 3.7. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee together with
such security or indemnity as may be required by the Corporation or the Trustee
to save each of them harmless, the Corporation shall execute and the Trustee
shall authenticate and deliver in exchange therefor a new Security of the same
series, of like tenor and aggregate principal amount and bearing a number not
contemporaneously outstanding.
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If there shall be delivered to the Corporation and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Corporation or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Corporation shall execute and upon its written request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series, of like tenor and aggregate
principal amount as such destroyed, lost or stolen Security, and bearing a
number not contemporaneously outstanding.
If any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, the Corporation in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Corporation may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Corporation, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of the same series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.8. Payment of Interest and Additional Interest; Interest
Rights Preserved.
Interest and Additional Interest on any Security of any series that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date, shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest in respect of Securities of such series, except
that, unless otherwise provided in the Securities of such series, interest and
any Additional Interest payable on the Stated Maturity of the principal of a
Security shall be paid to the Person to whom principal is paid. The initial
payment of interest on any Security of any series that is issued between a
Regular Record Date and the related Interest Payment Date shall be payable as
provided in such Security or in the Board Resolution pursuant to Section 3.1
with respect to the related series of Securities.
Any interest on any Security that is due and payable, but is not timely
paid or duly provided for, on any Interest Payment Date for Securities of such
series (herein called "Defaulted Interest"), shall forthwith cease to be payable
to the registered Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Corporation, at
its election in each case, as provided in Clause (1) or (2) below:
(1) The Corporation may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series in respect of which
interest is in default (or their respective
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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 Corporation shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security and the date
of the proposed payment, and at the same time the Corporation 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 Corporation of such Special Record Date and, in the name and at the expense
of the Corporation, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first class, postage
prepaid, to each Holder of a Security of such series at the address of such
Holder as it appears in the Securities Register not less than 10 days prior to
such Special Record Date. 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 Securities of
such series (or their respective Predecessor Securities) are registered on such
Special Record Date and shall no longer be payable pursuant to the following
Clause (2).
(2) The Corporation may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of the series in respect of which interest is
in default may be listed and, upon such notice as may be required by such
exchange (or by the Trustee if the Securities are not listed), if, after notice
given by the Corporation to the Trustee of the proposed payment pursuant to this
Clause, such payment shall be deemed practicable by the Trustee.
Unless otherwise provided in or pursuant to this Indenture or any
supplemental indenture, interest on the Securities of any series will be
payable, at the option of the Corporation, (1) by wire transfer to an account at
a banking institution in the United States that the Holder designates in writing
to the Trustee at least 16 days prior to the Interest Payment Date or (2) by
check mailed to the address of the Holder as such address appears in the
Security Register for the Securities of such series.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, that were carried by such other Security.
SECTION 3.9. Persons Deemed Owners.
The Corporation, the Trustee and any agent of the Corporation or the
Trustee shall treat the Person in whose name any Security is registered as the
owner of such Security for the purpose of receiving payment of principal of and
(subject to Section 3.8) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Corporation, the Trustee nor any agent of the Corporation or the Trustee shall
be affected by notice to the contrary.
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No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Security, and such Depositary may be treated by the Corporation,
the Trustee and any agent of the Corporation or the Trustee as the owner of such
Global Security for all purposes whatsoever. None of the Corporation, the
Trustee nor any agent of the Corporation or the Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global Security
or maintaining, supervising or reviewing any records relating to such beneficial
ownership interests. Notwithstanding the foregoing, nothing herein shall prevent
the Corporation, the Trustee or any agent of the Corporation or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by a Depositary or impair, as between a Depositary and such holders of
beneficial interests, the operation of customary practices governing the
exercise of the rights of the Depositary (or its nominee) as Holder of any
Security.
SECTION 3.10. Cancellation.
All Securities surrendered for payment, redemption, transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Securities and Securities surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it.
The Corporation may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder that the Corporation
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Indenture. All canceled
Securities shall be disposed of by the Trustee in accordance with its customary
practices and the Trustee shall deliver to the Corporation a certificate of such
disposition.
SECTION 3.11. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series for any
partial period shall be computed on the basis of a 360-day year of twelve 30-day
months and the actual number of days elapsed in any partial month in such
period, and interest on the Securities of each series for a full period shall be
computed by dividing the rate per annum by the number of interest periods that
together constitute a full twelve months.
SECTION 3.12. Deferrals of Interest Payment Dates.
If specified as contemplated by Section 2.1 or Section 3.1 with respect
to the Securities of a particular series, so long as no Event of Default has
occurred and is continuing, the Corporation shall have the right, at any time
during the term of such series, from time to time to defer the payment of
interest on such Securities for such period or periods as may be specified as
contemplated by Section 3.1 (each, an "Extension Period"), during which
Extension Periods the Corporation shall, if so specified as contemplated by
Section 3.1, have the right to make no or partial payments of interest on any
Interest Payment Date. No Extension Period shall end on a date other than an
Interest Payment Date. At the end of any such Extension Period the Corporation
shall pay all interest then accrued and unpaid on the Securities (together with
Additional Interest thereon, if any, at the rate specified for the Securities of
such series to the extent permitted by applicable law); provided, however, that
no Extension Period shall
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extend beyond the Stated Maturity of the principal of the Securities of such
series; and provided further, however that during any such Extension Period, the
Corporation shall 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 Corporation's capital stock, or (ii) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Corporation that rank pari passu in all respects with or
junior in interest to the Securities of such series (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Corporation
in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Corporation (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange or conversion
of any class or series of the Corporation's capital stock (or any capital stock
of a Subsidiary of the Corporation) for any class or series of the Corporation's
capital stock or of any class or series of the Corporation's indebtedness for
any class or series of the Corporation's capital stock, (c) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (d) any declaration of a dividend in connection
with any Rights Plan, or the issuance of rights, stock or other property under
any Rights Plan, or the redemption or repurchase of rights pursuant thereto, or
(e) any dividend in the form of stock, warrants, options or other rights where
the dividend stock or the stock issuable upon exercise of such warrants, options
or other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock). Prior to the termination of any
such Extension Period, the Corporation may further defer the payment of
interest, provided, however, that no Extension Period shall exceed the period or
periods specified in such Securities, extend beyond the Stated Maturity of the
principal of such Securities or end on a date other than an Interest Payment
Date. Upon the termination of any such Extension Period and upon the payment of
all accrued and unpaid interest and any Additional Interest then due on any
Interest Payment Date, the Corporation may elect to begin a new Extension
Period, subject to the above conditions. No interest or Additional Interest
shall be due and payable during an Extension Period, except at the end thereof,
but each installment of interest that would otherwise have been due and payable
during such Extension Period shall bear Additional Interest as and to the extent
as may be specified as contemplated by Section 3.1. The Corporation shall give
the Holders of the Securities of such series and the Trustee written notice of
its election to begin any such Extension Period at least one Business Day prior
to the next succeeding Interest Payment Date on which interest on Securities of
such series would be payable but for such deferral or, with respect to any
Securities of a series issued to an Issuer Trust, so long as any such Securities
are held by such Issuer Trust, at least one Business Day prior to the earlier of
(i) the next succeeding date on which Distributions on the Preferred Securities
of such Issuer Trust would be payable but for such deferral, and (ii) the date
on which the Property Trustee of such Issuer Trust is required to give notice to
any securities exchange or other applicable self-regulatory organization or to
holders of such Preferred Securities of the record date or the date such
Distributions are payable.
The Trustee shall promptly give notice of the Corporation's election to
begin any such Extension Period to the Holders of the Outstanding Securities of
such series.
SECTION 3.13. Right of Set-Off.
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With respect to the Securities of a series initially issued to an
Issuer Trust, notwithstanding anything to the contrary herein, the Corporation
shall have the right to set off any payment it is otherwise required to make in
respect of any such Security to the extent the Corporation has theretofore made,
or is concurrently on the date of such payment making, a payment under the
Guarantee Agreement relating to such Security or to a holder of Preferred
Securities pursuant to an action undertaken under Section 5.8 of this Indenture.
SECTION 3.14. Agreed Tax Treatment.
Each Security issued hereunder shall provide that the Corporation and,
by its acceptance or acquisition of a Security or a beneficial interest therein,
the Holder of, and any Person that acquires a direct or indirect beneficial
interest in, such Security, intend and agree to treat such Security as
indebtedness of the Corporation for United States Federal, state and local tax
purposes and, with respect to Securities of a series issued to an Issuer Trust,
to treat Preferred Securities of such Issuer Trust (including but not limited to
all payments and proceeds with respect to such Preferred Securities) as an
undivided beneficial ownership interest in the Securities (and payments and
proceeds therefrom, respectively) for United States Federal, state and local tax
purposes. The provisions of this Indenture shall be interpreted to further this
intention and agreement of the parties.
SECTION 3.15. Shortening of Stated Maturity.
If specified as contemplated by Section 2.1 or Section 3.1 with respect
to the Securities of a particular series, the Corporation shall have the right
to shorten the Stated Maturity of the principal of the Securities of such series
at any time to any date not earlier than the first date on which the Corporation
has the right to redeem the Securities of such series. In the event that the
Corporation elects to shorten the Stated Maturity of the Securities of such
series, it shall give written notice to the Trustee.
SECTION 3.16. CUSIP Numbers.
The Corporation 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 and other similar or related materials as a convenience to
Holders; provided, however, that any such notice or other materials 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 redemption or other
materials 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.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall, upon Corporation Request, cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for and as otherwise provided
in this Section 4.1) and the Trustee, on demand of and at the expense of the
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Corporation, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities that have been destroyed, lost or stolen and
that have been replaced or paid as provided in Section 3.7 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Corporation and thereafter
repaid to the Corporation or discharged from such trust, as provided in
Section 10.3) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year of the date of deposit, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the
name, and at the expense, of the Corporation,
and the Corporation, in the case of subclause (B)(i), (ii) or (iii)
above, has deposited or caused to be deposited with the Trustee as
trust funds in trust for such purpose (x) an amount in the currency or
currencies in which the Securities of such series are payable, (y)
Government Obligations which through the scheduled payment of principal
and interest in respect thereof in accordance with their terms will
provide, not later than the due date of any payment, money in an amount
or (z) a combination thereof, in each case sufficient in the opinion of
a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee,
sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation,
for principal and any premium and interest (including any Additional
Interest) to the date of such deposit (in the case of Securities that
have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(2) the Corporation has paid or caused to be paid all other sums
payable hereunder by the Corporation; and
(3) the Corporation 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 Corporation to the Trustee under Section 6.7, the obligations
of the Corporation to any Authenticating Agent under Section 6.14 and, if money
shall have been deposited with the Trustee pursuant to subclause (B) of
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Clause (1) of this Section, the obligations of the Trustee under Section 4.2 and
the last paragraph of Section 10.3 shall survive.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by the Trustee, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Corporation acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal any premium and
interest (including any Additional Interest) for the payment of which such money
or obligations have been deposited with or received by the Trustee.
Moneys held by the Trustee under this Section shall not be subject to
the claims of holders of Senior Indebtedness under Article XIII.
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default", wherever used herein with respect to the Securities
of any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body) except as may be specified pursuant to Section 3.1:
(1) default in the payment of any interest upon any Security of that
series, including any Additional Interest in respect thereof, when it becomes
due and payable, and continuance of such default for a period of 30 days
(subject to the deferral of any due date in the case of an Extension Period); or
(2) default in the payment of the principal of or any premium on any
Security of that series at its Maturity; or
(3) default in the performance, or breach, of any covenant or warranty
of the Corporation 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 60 days after there has
been given, by registered or certified mail, to the Corporation by the Trustee
or to the Corporation and the Trustee by the Holders of at least 33% 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, unless the Trustee, or the
Trustee and the Holders of a principal amount of Securities of such series not
less than the principal amount of Securities that gave such notice, as the case
may be, shall agree in writing to an extension of such period prior to its
expiration; provided, however, that the Trustee, or the Trustee and the Holders
of such principal amount of Securities of such series, as the case may be, shall
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be deemed to have agreed to an extension of such period if corrective action is
initiated by the Company within such period and is being diligently pursued;
(4) 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 bank ruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a 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 its property, 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 60 consecutive days; or
(5) 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 to the commencement of any bankruptcy or insolvency case or
proceeding against it, 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 it to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial part
of its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due, or the authorization of any such action by the
Board of Directors; or
(6) any other Event of Default provided with respect to Securities of
that series.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 33% in aggregate principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Securities of that series are Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Securities of that series to be due and payable immediately, by a notice in
writing to the Corporation (and to the Trustee if given by Holders), provided,
however, that in the case of the Securities of a series issued to an Issuer
Trust, if, upon an Event of Default, the Trustee or the Holders of not less than
33% in principal amount of the Outstanding Securities of such series fail to
declare the principal of all the Outstanding Securities of such series to be
immediately due and payable, the holders of at least 33% in aggregate
Liquidation Amount (as defined in the related Trust Agreement) of the related
series of Preferred Securities issued by such Issuer Trust then outstanding
shall have the right to make such declaration by a notice in writing to the
Corporation and the Trustee; and upon any such declaration such principal amount
(or specified portion thereof) of and the accrued interest (including any
Additional Interest) on all the Securities of such series shall become
immediately due and payable.
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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 aggregate principal amount of the
Outstanding Securities of that series, by written notice to the Corporation and
the Trustee, may rescind and annul such declaration and its consequences if:
(1) the Corporation has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue installments of interest on all Securities of such
series,
(B) any accrued Additional Interest on all Securities of such series,
(C) the principal of (and premium, if any, on) any Securities of such
series that have become due otherwise than by such declaration of acceleration
and interest and Additional Interest thereon at the rate borne by the
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 that
has become due solely by such acceleration, have been cured or waived as
provided in Section 5.13.
In the case of Securities of a series initially issued to an Issuer
Trust, if the Holders of such Securities fail to annul such declaration and
waive such default, the holders of not less than 33% in aggregate Liquidation
Amount (as defined in the related Trust Agreement) of the related series of
Preferred Securities issued by such Issuer Trust then outstanding shall also
have the right to rescind and annul such declaration and its consequences by
written notice to the Corporation and the Trustee, subject to the satisfaction
of the conditions set forth in Clauses (1) and (2) above of this Section 5.2.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Corporation covenants that if:
(1) default is made in the payment of any installment of interest
(including any Additional Interest) on any Security of any series 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 and any premium
on any Security at the Maturity thereof,
the Corporation will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal and any
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premium and interest (including any Additional Interest), and, in addition
thereto, all amounts owing the Trustee under Section 6.7.
If the Corporation 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, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Corporation 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 Corporation or any other
obligor upon the 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 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 5.4. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, 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, 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 6.7.
SECTION 5.5. Trustee May Enforce Claim Without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any 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, subject to
Article XIII and after provision for the payment of all the amounts owing the
Trustee and any predecessor Trustee under Section 6.7, its agents and counsel,
be for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money or property on account of principal or any
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premium or interest (including any Additional Interest), upon presentation of
the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.7;
SECOND: Subject to Article XIII, to the payment of the amounts then due
and unpaid upon Securities of such series for principal and any premium and
interest (including any Additional Interest) in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such series of
Securities for principal and any premium and interest (including any Additional
Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 5.7. Limitation on Suits.
Subject to Section 5.8, no Holder of any Securities of any series shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture or for the appointment of a receiver, assignee, trustee,
liquidator, sequestrator (or other similar official) or for any other remedy
hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than a majority in aggregate 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 after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding for 60 days; 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
aggregate principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest; Direct Action by Holders of Preferred Securities.
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Notwithstanding any other provision in this Indenture, the Holder of
any Security of any series shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Sections 3.8 and 3.12) interest (including any Additional Interest)
on such Security on the respective Stated Maturities expressed in such Security
(or, in the case of redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder. In the case of Securities of a series issued
to an Issuer Trust, any registered holder of the series of Preferred Securities
issued by such Issuer Trust shall have the right, upon the occurrence of an
Event of Default described in Section 5.1(1) or 5.1(2), to institute a suit
directly against the Corporation for enforcement of payment to such holder of
principal of and any premium and (subject to Sections 3.8 and 3.12) interest
(including any Additional Interest) on the Securities having a principal amount
equal to the aggregate Liquidation Amount (as defined in the related Trust
Agreement) of such Preferred Securities held by such holder.
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee, any Holder or any holder of Preferred Securities issued
by any Issuer Trust has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee, such Holder or such
holder of Preferred Securities, then and in every such case the Corporation, the
Trustee, such Holders and such holder of Preferred Securities shall, subject to
any determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee, such Holder and such holder of Preferred Securities shall continue as
though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided in the last paragraph of Section 3.7, no
right or remedy herein conferred upon or reserved to the Trustee or the Holders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee, any Holder of any Securities or
any holder of any Preferred Security to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee
or to the Holders and the right and remedy given to the holders of Preferred
Securities by Section 5.8 may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee, the Holders or the holders of Preferred
Securities, as the case may be.
SECTION 5.12. Control by Holders.
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The Holders of not less than 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 Trustee or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided, however, 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
that is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.1, the Trustee shall have
the right to decline to follow such direction if a Responsible Officer or
Officers of the Trustee shall, in good faith, determine that the proceeding so
directed would be unjustly prejudicial to the Holders not joining in any such
direction or would involve the Trustee in personal liability.
SECTION 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any series affected thereby and, in the case of
any Securities of a series initially issued to an Issuer Trust, the holders of a
majority in aggregate Liquidation Amount (as defined in the related Trust
Agreement) of the Preferred Securities issued by such Issuer Trust may waive any
past default hereunder and its consequences with respect to such series except a
default:
(1) in the payment of the principal of or any premium or interest
(including any Additional Interest) on any Security of such series (unless such
default has been cured and the Corporation has paid to or deposited with the
Trustee a sum sufficient to pay all matured installments of interest (including
any Additional Interest) and all principal of and any premium on all Securities
of that series due otherwise than by acceleration), or
(2) in respect of a covenant or provision hereof that under Article IX
cannot be modified or amended without the consent of each Holder of any
Outstanding Security of such series affected.
Any such waiver shall be deemed to be on behalf of the Holders of all
the Securities of such series or, in the case of a waiver by holders of
Preferred Securities issued by such Issuer Trust, by all holders of Preferred
Securities issued by such Issuer Trust.
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 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the
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costs of such suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in aggregate principal amount of the Outstanding Securities of any
series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of or any premium or interest (including any Additional
Interest) on any Security on or after the respective Stated Maturities expressed
in such Security.
SECTION 5.15. Waiver of Usury, Stay or Extension Laws.
The Corporation covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any usury, stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Corporation (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
ARTICLE VI
THE TRUSTEE
SECTION 6.1. 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.
SECTION 6.2. 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 within 90 days after it occurs unless such default shall have been cured
or waived; provided, however, that except in the case of a default in the
payment of the principal of or any premium or interest on any Securities of any
series or in the making of any sinking fund payment payable with respect to
Securities of any series, the Trustee may withhold the 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 withholding the notice is in the interest of holders of Securities of that
series; and provided, however, that in the case of any default of
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the character specified in Section 5.1(3) 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 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the 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, Security or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(b) any request or direction of the Corporation mentioned herein shall
be sufficiently evidenced by a Corporation Request or Corporation Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity reasonably satisfactory to it
against the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, indenture,
Security or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Corporation,
personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, attorneys,
custodians or nominees and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent, attorney, custodian or
nominee appointed with due care by it hereunder.
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(h) in the event that the Trustee is also acting as Paying Agent,
Authenticating Agent or Transfer Agent and Registrar hereunder, the rights and
protections afforded to the Trustee pursuant to this Article VI shall also be
afforded such Paying Agent or Transfer Agent and Registrar.
(i) the Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Indenture.
(j) the Trustee shall not be charged with knowledge of any Event of
Default unless either (1) a Responsible Officer of the Trustee shall have actual
knowledge or (2) the Trustee shall have received notice thereof from the Company
or a Holder.
(k) no permissive power or authority available to the Trustee shall be
construed as a duty.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Corporation, and neither the Trustee nor any Authenticating Agent assumes
any responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Corporation of the Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Securities
Registrar or any other agent of the Corporation, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Corporation with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent,
Securities Registrar or such other agent.
SECTION 6.6. Money Held in 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 Corporation.
SECTION 6.7. Compensation and Reimbursement.
The Corporation agrees
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder in such amounts as the Corporation and the
Trustee shall agree 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);
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(2) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee and its officers, directors, agents and
employees for, and to hold it harmless against, any loss, liability or expense
(including the reasonable compensation and the expenses and disbursements of its
agents and counsel) incurred without negligence or bad faith, arising out of or
in connection with the acceptance or administration of this trust or the
performance of its duties hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
[The Trustee shall have a lien prior to the Securities as to all
property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 6.7, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.]
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services after an
Event of Default specified in Section 5.1(4) or 5.1(5) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Reform Act of 1978 or any successor statute.
The obligations of the Corporation under this Section 6.7 shall survive
the satisfaction and discharge of this Indenture and the earlier resignation or
removal of the Trustee.
SECTION 6.8. Disqualification; Conflicting Interests.
(a) The Trustee for the Securities of any series issued hereunder shall
be subject to the provisions of Section 310(b) of the Trust Indenture Act.
Nothing herein shall prevent the Trustee from filing with the Commission the
application referred to in the second to last paragraph of said Section 310(b).
(b) The Trust Agreement and the Guarantee Agreement with respect to
each Issuer Trust shall be deemed to be specifically described in this Indenture
for the purposes of clause (i) of the first proviso contained in Section 310(b)
of the Trust Indenture Act.
SECTION 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be the Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person 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 with respect to the Securities of any series 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.
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SECTION 6.10. 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 VI shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(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 Corporation. If an
instrument of acceptance by a successor Trustee 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 aggregate
principal amount of the Outstanding Securities of such series, delivered to the
Trustee and to the Corporation.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Corporation or by any Holder 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 6.9 and shall
fail to resign after written request therefor by the Corporation 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 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, (i) the Corporation, acting pursuant to the authority of
a Board Resolution, may remove the Trustee with respect to the Securities of all
series issued hereunder, or (ii) subject to Section 5.14, any Holder who has
been a bona fide Holder of a Security for at least six months may, on behalf of
such Holder and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to the Securities of
all series issued hereunder 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 Trustee for any cause with
respect to the Securities of one or more series, the Corporation, by a Board
Resolution, shall promptly appoint a successor Trustee with respect to the
Securities of that or those series. 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 aggregate principal amount of the Outstanding
Securities of such series delivered to the Corporation and the retiring Trustee,
the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee with respect to the Securities of such
series and supersede the successor Trustee appointed by the Corporation.
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If no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Corporation or the Holders and accepted appointment in
the manner hereinafter provided, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, subject to Section 5.14, on
behalf of such Holder 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.
(f) The Corporation 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
by mailing written notice of such event by first-class mail, postage prepaid, to
the Holders of Securities of such series as their names and addresses appear in
the Securities Register. 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 6.11. 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 Corporation and to the retiring Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Corporation or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Corporation,
the retiring Trustee and each successor Trustee with respect to the Securities
of one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts, and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Corporation or any successor Trustee,
such retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by
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such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Corporation shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts referred to
in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated, and in case any
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or in
the name of such successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall have.
SECTION 6.13. Preferential Collection of Claims Against Corporation.
If and when the Trustee shall be or become a creditor of the
Corporation (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 Corporation (or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities, which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue (in accordance with procedures acceptable to the Trustee) and upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 3.7, 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
Corporation and shall at all times be a corporation organized and doing business
under the laws of the United States of America, or of any State or Territory
thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports
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of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Corporation. 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 Corporation. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent, which shall be acceptable to the Corporation and shall give notice of
such appointment in the manner provided in Section 1.6 to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provision of this Section.
The Corporation agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment of an Authenticating Agent with respect to one or
more series is made pursuant to this Section, the Securities of such series may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
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This is one of the Securities of the series designated therein referred
to in the within mentioned Indenture.
Dated:
THE CHASE MANHATTAN BANK,
As Trustee
By: ,
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As Authenticating Agent
By:
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Authorized Officer
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND CORPORATION
SECTION 7.1. Corporation to Furnish Trustee Names and Addresses of
Holders.
The Corporation will furnish or cause to be furnished to the Trustee:
(a) semi-annually, on or before June 30 and December 31 of
each year, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of a date not more than 15
days prior to the delivery thereof, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Corporation 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,
in each case to the extent such information is in the possession or control of
the Corporation and has not otherwise been received by the Trustee in its
capacity as Securities Registrar.
SECTION 7.2. 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 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
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(b) The rights of 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 in the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Corporation and the Trustee that neither the Corporation nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.3. Reports by Trustee.
(a) 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.
(b) If required by Section 313(a) of the Trust Indenture Act, the
Trustee shall, within sixty days after each September 15 following the date of
this Indenture deliver to the Holders a brief report, dated as of such September
15, which complies with the provisions of such Section 313(a).
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each securities exchange upon which any
Securities are listed and also with the Commission. The Corporation will notify
the Trustee when any Securities are listed on any securities exchange.
SECTION 7.4. Reports by Corporation.
The Corporation shall file with the Trustee and with 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 in the Trust Indenture Act; provided, however,
that any such information, documents or reports required to be filed with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act shall be
filed with the Trustee within 15 days after the same is required to be filed
with the Commission.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Corporation May Consolidate, Etc., Only on Certain Terms.
The Corporation shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and no Person shall consolidate with or merge into
the Corporation or convey, transfer or lease its properties and assets
substantially as an entirety to the Corporation, unless:
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(1) if the Corporation shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, the corporation formed by such consolidation or into
which the Corporation is merged or the Person that acquires by conveyance or
transfer, or that leases, the properties and assets of the Corporation
substantially as an entirety shall be a corporation, partnership or trust
organized and existing under the laws of the United States of America or any
State thereof, the District of Columbia, Bermuda or the Cayman Islands 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 any Additional
Interest) on all the Securities of every series and the performance of every
covenant of this Indenture on the part of the Corporation to be performed or
observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event that, after notice or lapse of time, or both, would
constitute an Event of Default, shall have happened and be continuing; and
(3) the Corporation has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and if a supplemental indenture is
required in connection with such transaction, any such supplemental indenture
comply with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with; and the Trustee, subject
to Section 6.1, may rely upon such Officers' Certificate and Opinion of Counsel
as conclusive evidence that such transaction complies with this Section 8.1.
SECTION 8.2. Successor Corporation Substituted.
Upon any consolidation or merger by the Corporation with or into any
other Person, or any conveyance, transfer or lease by the Corporation of its
properties and assets substantially as an entirety to any Person in accordance
with Section 8.1, the successor corporation formed by such consolidation or into
which the Corporation 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 Corporation under this Indenture with the same effect as if
such successor Person had been named as the Corporation herein; and in the event
of any such conveyance or transfer the Corporation shall be discharged from all
obligations and covenants under the Indenture and the Securities.
Such successor Person may cause to be executed, and may issue either in
its own name or in the name of the Corporation, any or all of the Securities
issuable hereunder that theretofore shall not have been signed by the
Corporation and delivered to the Trustee; and, upon the order of such successor
Person instead of the Corporation and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities that previously shall have been signed and
delivered by the officers of the Corporation to the Trustee for authentication
pursuant to such provisions and any Securities that such successor Person
thereafter shall cause to be executed and delivered to the Trustee on its behalf
for the purpose pursuant to such provisions. All the Securities so issued shall
in all respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture.
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In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Corporation, 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
Corporation, and the assumption by any such successor of the covenants
of the Corporation herein and in the Securities; or
(2) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee or to surrender any right or power
herein conferred upon the Corporation; or
(3) to establish the form or terms of Securities of any series
as permitted by Sections 2.1 or 3.1; or
(4) to add to the covenants of the Corporation for the benefit
of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included
solely for the benefit of the series specified) or to surrender any
right or power herein conferred upon the Corporation; or
(5) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such additional
Events of Default are to be for the benefit of less than all series of
Securities, stating that such additional Events of Default are
expressly being included solely for the benefit of the series
specified); or
(6) to add to, change or eliminate any of the provisions of
this Indenture, provided. however, that any such additional change or
elimination shall (a) become effective only when there is no Security
Outstanding of any series created prior to the execution of such
supplemental indenture that is entitled to the benefit of such
provision or (b) not apply to any Outstanding Securities; or
(7) to cure any ambiguity, to correct or supplement any
provision herein that may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided, however,
that such action pursuant to this clause (7) shall not adversely affect
the interest of the Holders of Securities of any series in any material
respect or, in the case of the Securities of a series issued to an
Issuer Trust and for so long as any of the corresponding series of
Preferred Securities issued by such Issuer Trust shall remain
outstanding, the holders of such Preferred Securities; or
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(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 6.11(b); or
(9) to comply with the requirements of the Commission in order
to effect or maintain qualification of this Indenture under the Trust
Indenture Act.
SECTION 9.2. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series affected
by such supplemental indenture, by Act of said Holders delivered to the
Corporation and the Trustee, the Corporation, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security of each
series affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of interest (including any Additional Interest) on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, or reduce the amount of principal of a Discount
Security that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 5.2, or change the place of payment where,
or the coin or currency in which, any Security or interest thereon is payable,
or impair the right to institute suit for the enforcement of any such payment on
or after the Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date), or
(2) reduce the percentage in aggregate principal amount of the
Outstanding Securities of any series, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 5.13 or
Section 10.5, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Security affected thereby;
provided, further, that, in the case of the Securities of a series issued to an
Issuer Trust, so long as any of the corresponding series of Preferred Securities
issued by such Issuer Trust remains outstanding, (i) no such amendment shall be
made that adversely affects the holders of such Preferred Securities in any
material respect, and no termination of this Indenture shall occur, and no
waiver of any Event of Default or compliance with any covenant under this
Indenture shall be effective, without the prior consent of the holders of at
least a majority of the aggregate Liquidation Amount (as defined in the related
Trust Agreement) of such Preferred Securities then outstanding unless and until
the principal of and any
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premium on the Securities of such series and all accrued and (subject to Section
3.12) unpaid interest (including any Additional Interest) thereon have been paid
in full, and (ii) no amendment shall be made to Section 5.8 of this Indenture
that would impair the rights of the holders of Preferred Securities issued by
any Issuer Trust provided therein without the prior consent of the holders of
each such Preferred Security then outstanding unless and until the principal of
and any premium on the Securities of such series and all accrued and (subject to
Section 3.12) unpaid interest (including any Additional Interest) thereon have
been paid in full.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Securities or any corresponding
series of Preferred Securities of an Issuer Trust that holds the Securities of
any series, or that modifies the rights of the Holders of Securities of such
series or holders of such Preferred Securities of such corresponding 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 or
holders of Preferred Securities of any other such corresponding series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in conclusively relying
upon, an Officers' Certificate and an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture, and that all conditions precedent herein provided for relating to
such action have been complied with. The Trustee may, but shall not be obligated
to, enter into any such supplemental indenture that affects the Trustee's own
rights, duties, indemnities or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6. Reference in Securities to Supplemental Indentures.
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Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Corporation, bear a notation in form approved by the Corporation as to any
matter provided for in such supplemental indenture. If the Corporation shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Corporation, to any such supplemental indenture may be prepared
and executed by the Corporation and authenticated and delivered by the Trustee
in exchange for Outstanding Securities of such series.
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Corporation 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 (including any Additional Interest) on the Securities of that
series in accordance with the terms of such Securities and this Indenture.
SECTION 10.2. Maintenance of Office or Agency.
The Corporation will maintain in each Place of Payment for any series
of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Corporation in respect of the Securities of that series
and this Indenture may be served. The Corporation initially appoints the
Trustee, acting through its Corporate Trust Office, as its agent for said
purposes. The Corporation will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the
Corporation shall fail to maintain such office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Corporation hereby appoints the Trustee as its agent to receive
all such presentations, surrenders, notices and demands.
The Corporation may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all of such purposes, and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Corporation of its obligation to maintain an office or agency in
each Place of Payment for Securities of any series for such purposes. The
Corporation will give prompt written notice to the Trustee of any such
designation and any change in the location of any such office or agency.
SECTION 10.3. Money for Security Payments to be Held in Trust.
If the Corporation shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of and any premium or interest on any of the Securities of such
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 in writing of its
failure so to act.
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Whenever the Corporation shall have one or more Paying Agents, it will,
prior to 10:00 a.m., New York City time, on each due date of the principal of or
any premium or interest (including any Additional Interest) on any Securities,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided in the Trust Indenture Act and (unless such Paying Agent is the
Trustee) the Corporation will promptly notify the Trustee of its failure so to
act.
The Company will cause each Paying Agent for any series of Securities
other than 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 (1) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (2) 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, 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 Corporation may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Corporation Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Corporation 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
Corporation 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 Corporation in trust for the payment of the principal of and any premium
or interest (including any Additional Interest) on any Security and remaining
unclaimed for two years after such principal and any premium or interest has
become due and payable shall (unless otherwise required by mandatory provision
of applicable escheat or abandoned or unclaimed property law) be paid on
Corporation Request to the Corporation, or (if then held by the Corporation)
shall (unless otherwise required by mandatory provision of applicable escheat or
abandoned or unclaimed property law) be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor, look
only to the Corporation for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Corporation as trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Corporation cause to be published once, in
a newspaper published in the English language, customarily published on each
Business Day and of general circulation in the Borough of Manhattan, The City of
New York, 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 Corporation.
SECTION 10.4. Statement as to Compliance.
The Corporation shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Corporation ending after the date hereof, an
Officers' Certificate covering the preceding calendar year, stating whether or
not to the best knowledge of the signers thereof the Corporation is in default
in the performance, observance or fulfillment of or compliance with any of the
terms, provisions, covenants
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and conditions of this Indenture, and if the Corporation shall be in default,
specifying all such defaults and the nature and status thereof of which they may
have knowledge. For the purpose of this Section 10.4, compliance shall be
determined without regard to any grace period or requirement of notice provided
pursuant to the terms of this Indenture.
SECTION 10.5. Waiver of Certain Covenants.
Subject to the rights of holders of Preferred Securities specified in
Section 9.2, if any, the Corporation may omit in any particular instance to
comply with any covenant or condition provided pursuant to Section 3.1, 9.1(3)
or 9.1(4) with respect to the Securities of any series, if before or after the
time for such compliance the Holders of at least a majority in aggregate
principal amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the
Corporation in respect of any such covenant or condition shall remain in full
force and effect.
SECTION 10.6. Additional Sums.
In the case of the Securities of a series initially issued to an Issuer
Trust, so long as no Event of Default has occurred and is continuing and except
as otherwise specified as contemplated by Section 2.1 or Section 3.1, if (i) an
Issuer Trust is the Holder of all of the Outstanding Securities of such series,
and (ii) a Tax Event described in clause (i) or (iii) in the definition of Tax
Event in Section 1.1 hereof has occurred and is continuing in respect of such
Issuer Trust, the Corporation shall pay to such Issuer Trust (and its permitted
successors or assigns under the related Trust Agreement) for so long as such
Issuer Trust (or its permitted successor or assignee) is the registered holder
of the Outstanding Securities of such series, such additional sums as may be
necessary in order that the amount of Distributions (including any Additional
Amounts (as defined in such Trust Agreement)) then due and payable by such
Issuer Trust on the related Preferred Securities and Common Securities that at
any time remain outstanding in accordance with the terms thereof shall not be
reduced as a result of any Additional Taxes arising from such Tax Event (the
"Additional Sums"). Whenever in this Indenture or the Securities there is a
reference in any context to the payment of principal of or interest on the
Securities, such mention shall be deemed to include mention of the payments of
the Additional Sums provided for in this paragraph to the extent that, in such
context, Additional Sums are, were or would be payable in respect thereof
pursuant to the provisions of this paragraph and express mention of the payment
of Additional Sums (if applicable) in any provisions hereof shall not be
construed as excluding Additional Sums in those provisions hereof where such
express mention is not made; provided, however, that the deferral of the payment
of interest pursuant to Section 3.12 on the Securities shall not defer the
payment of any Additional Sums that may be due and payable.
SECTION 10.7. Additional Covenants.
The Corporation covenants and agrees with each Holder of Securities of
each series that it shall not (x) declare or pay any dividends or distributions
on, or redeem purchase, acquire or make a liquidation payment with respect to,
any shares of the Corporation's capital stock, or (y) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt
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securities of the Corporation that rank pari passu in all respects with or
junior in interest to the Securities of such series (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Corporation
in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Corporation (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange or conversion
of any class or series of the Corporation's capital stock (or any capital stock
of a Subsidiary of the Corporation) for any class or series of the Corporation's
capital stock or of any class or series of the Corporation's indebtedness for
any class or series of the Corporation's capital stock, (c) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (d) any declaration of a dividend in connection
with any Rights Plan, or the issuance of rights, stock or other property under
any Rights Plan, or the redemption or repurchase of rights pursuant thereto, or
(e) any dividend in the form of stock, warrants, options or other rights where
the dividend stock or the stock issuable upon exercise of such warrants, options
or other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock) if at such time the Corporation
shall have given notice of its election to begin an Extension Period with
respect to the Securities of such series as provided herein and shall not have
rescinded such notice, or such Extension Period, or any extension thereof, shall
be continuing.
The Corporation also covenants with each Holder of Securities of a
series issued to an Issuer Trust (i) to hold, directly or indirectly, 100% of
the Common Securities of such Issuer Trust, provided that any permitted
successor of the Corporation hereunder may succeed to the Corporation's
ownership of such Common Securities, (ii) as holder of such Common Securities,
not to voluntarily terminate, wind-up or liquidate such Issuer Trust, other than
(a) in connection with a distribution of the Securities of such series to the
holders of the related Preferred Securities in liquidation of such Issuer Trust,
or (b) in connection with certain mergers, consolidations or amalgamations
permitted by the related Trust Agreement, and (iii) to use its reasonable
efforts, consistent with the terms and provisions of such Trust Agreement, to
cause such Issuer Trust to continue not to be taxable as a corporation for
United States federal income tax purposes.
SECTION 10.8. Original Issue Discount.
For each year during which any Securities that were issued with
original issue discount are Outstanding, the Corporation shall furnish to each
Paying Agent in a timely fashion such information as may be reasonably requested
by each Paying Agent in order that each Paying Agent may prepare the information
which it is required to report for such year on Internal Revenue Service Forms
1096 and 1099 pursuant to Section 6049 of the Internal Revenue Code of 1986, as
amended. Such information shall include the amount of original issue discount
includible in income for each $25 of principal amount at Stated Maturity of
outstanding Securities during such year.
ARTICLE XI
REDEMPTION OF SECURITIES
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SECTION 11.1. Applicability of This 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 3.1 for such Securities) in
accordance with this Article.
SECTION 11.2. Election to Redeem; Notice to Trustee.
The election of the Corporation to redeem any Securities shall be
evidenced by or pursuant to a Board Resolution or in another name specified as
contemplated by Section 3.1 for such Securities. In case of any redemption at
the election of the Corporation, the Corporation shall, at least 45 days prior
to the Redemption Date (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee in writing and, in the case of Securities of a
series held by an Issuer Trust, the Property Trustee under the related Trust
Agreement, of such date and of the principal amount of Securities of the
applicable series to be redeemed and provide the additional information required
to be included in the notice or notices contemplated by Section 11.4; provided
that in the case of any series of Securities initially issued to an Issuer
Trust, for so long as such Securities are held by such Issuer Trust, such notice
shall be given not less than 45 nor more than 75 days prior to such Redemption
Date (unless a shorter notice shall be satisfactory to the Property Trustee
under the related Trust Agreement). In the case of any redemption of Securities
(1) prior to the expiration of any restriction on such redemption provided in
the terms of such Securities or (2) pursuant to an election of the Corporation
which is subject to a condition specified in the terms of such Securities, the
Corporation shall furnish the Trustee with an Officers' Certificate and an
Opinion of Counsel evidencing compliance with such restriction or condition.
SECTION 11.3. Selection of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
provided, however, that the unredeemed portion of the principal amount of any
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
The Trustee shall promptly notify the Corporation in writing of the
Securities selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security that has been or is to be
redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
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SECTION 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not later than the thirtieth day, and not earlier than the
sixtieth day, prior to the Redemption Date, to each Holder of Securities to be
redeemed, at the address of such Holder as it appears in the Securities
Register, provided, however, that in the case of any series of Securities
initially issued to an Issuer Trust, for so long as such Securities are held by
such Issuer Trust, such notice shall be given not less than 45 nor more than 75
days prior to such Redemption Date (unless a shorter notice shall be
satisfactory to the Property Trustee under the related Trust Agreement).
With respect to Securities of each series to be redeemed, each notice
of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price or, if the Redemption Price cannot be
calculated prior to the time the notice is required to be sent, the estimate of
the Redemption Price together with a statement that it is an estimate, as
calculated by the Corporation and that the actual Redemption Price will be
calculated on the third Business Day prior to the Redemption Date (and if an
estimate is provided, a further notice shall be sent of the actual Redemption
Price on the date that such Redemption Price is calculated);
(c) if less than all Outstanding Securities of such particular series
are to be redeemed, the identification (and, in the case of partial redemption,
the respective principal amounts) of the particular Securities to be redeemed;
(d) that on the Redemption Date, the Redemption Price will become due
and payable upon each such Security or portion thereof, and that interest
(including any Additional Interest) thereon, if any, shall cease to accrue on
and after said date;
(e) the place or places where such Securities are to be surrendered for
payment of the Redemption Price;
(f) that the redemption is for a sinking fund, if such is the case;
(g) such other provisions as may be required in respect of the terms of
a particular series of Securities.
Unless otherwise specified with respect to any Securities in accordance
with Section 3.1, with respect to any redemption of Securities at the election
of the Corporation, unless, upon the giving of notice of such redemption,
Defeasance shall have been effected with respect to such Securities pursuant to
Section 13.2, such notice may state that such redemption shall be conditional
upon the receipt by the Trustee or the Paying Agent for such Securities, on or
prior to the date fixed for such redemption, of money sufficient to pay the
principal of and any premium and interest on such Securities and that if such
money shall not have been so received such notice shall be of no force or effect
and the Corporation shall not be required to redeem such Securities. In the
event such notice of redemption contains such a condition and such money is not
so received, the redemption shall not be made and within a reasonable time
thereafter notice shall be given, in the same manner in which the notice of
redemption was given,
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that such money was not so received and such redemption was not required to be
made, and the Trustee or Paying Agent for the Securities otherwise to have been
redeemed shall promptly return to the Holders thereof any of such Securities
that had been surrendered for payment upon such redemption.
Notice of redemption of Securities to be redeemed at the election of
the Corporation shall be given by the Corporation or, at the Corporation's
request, by the Trustee in the name and at the expense of the Corporation and,
subject to the preceding paragraph, shall be irrevocable. The notice if mailed
in the manner provided above shall be conclusively presumed to have been duly
given, whether or not the Holder receives such notice. In any case, a failure to
give such notice by mail or any defect in the notice to the Holder of any
Security designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Security.
SECTION 11.5. Deposit of Redemption Price.
Prior to 10:00 a.m., New York City time, on the Redemption Date
specified in the notice of redemption given as provided in Section 11.4, the
Corporation will deposit with the Trustee or with one or more Paying Agents (or
if the Corporation is acting as its own Paying Agent, the Corporation will
segregate and hold in trust as provided in Section 10.3) an amount of money
sufficient to pay the Redemption Price of, and any accrued interest (including
any Additional Interest) on, all the Securities (or portions thereof) that are
to be redeemed on that date.
SECTION 11.6. Payment of Securities Called for Redemption.
If any notice of redemption has been given as provided in Section 11.4,
the Securities or portion of Securities with respect to which such notice has
been given shall become due and payable on the date and at the place or places
stated in such notice at the applicable Redemption Price, together with accrued
interest (including any Additional Interest) to the Redemption Date. On
presentation and surrender of such Securities at a Place of Payment in said
notice specified, the said Securities or the specified portions thereof shall be
paid and redeemed by the Corporation at the applicable Redemption Price,
together with accrued interest (including any Additional Interest) to the
Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest (including any Additional
Interest) whose Stated Maturity is on or prior to the Redemption Date will be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant record
dates according to their terms and the provisions of Section 3.8.
Upon presentation of any Security redeemed in part only, the
Corporation shall execute and the Trustee shall authenticate and deliver to the
Holder thereof, at the expense of the Corporation, a new Security or Securities
of the same series, of authorized denominations, in aggregate principal amount
equal to the unredeemed portion of the Security so presented and having the same
Original Issue Date, Stated Maturity and terms.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of and premium, if any, on such
Security shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.
SECTION 11.7. Right of Redemption of Securities Initially Issued to an
Issuer Trust.
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In the case of the Securities of a series initially issued to an Issuer
Trust, except as otherwise specified as contemplated by Section 3.1, the
Corporation, at its option, may redeem such Securities (i) on or after the date
specified in such Security, in whole at any time or in part from time to time,
or (ii) upon the occurrence and during the continuation of a Tax Event or an
Investment Company Event, at any time within 90 days following the occurrence
and during the continuation of such Tax Event or Investment Company Event, in
whole (but not in part), in each case at a Redemption Price specified in such
Security, together with accrued interest (including any Additional Interest) to
the Redemption Date.
If less than all the Securities of any such series are to be redeemed,
the aggregate principal amount of such Securities remaining Outstanding after
giving effect to such redemption shall be sufficient to satisfy any provisions
of the Trust Agreement related to the Issuer Trust to which such Securities were
issued, including any requirement in such Trust Agreement as to the minimum
Liquidation Amount (as defined in such Trust Agreement) of Preferred Securities
that may be held by a holder of Preferred Securities thereunder.
ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise specified as
contemplated by Section 3.1 for such Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any sinking fund payment in excess of such minimum
amount that is permitted to be made by the terms of such Securities of any
series is herein referred to as an "optional sinking fund payment". If provided
for by the terms of any Securities of any series, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section 12.2. Each
sinking fund payment shall be applied to the redemption of Securities of any
series as provided for by the terms of such Securities.
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities.
In lieu of making all or any part of a mandatory sinking fund payment
with respect to any Securities of a series in cash, the Corporation may at its
option, at any time no more than 16 months and no less than 45 days prior to the
date on which such sinking fund payment is due, deliver to the Trustee
Securities of such series theretofore purchased or otherwise acquired by the
Corporation, except Securities of such series that have been redeemed through
the application of mandatory or optional sinking fund payments pursuant to the
terms of the Securities of such series, accompanied by a Corporation Order
instructing the Trustee to credit such obligations and stating that the
Securities of such series were originally issued by the Corporation by way of
bona fide sale or other negotiation for value; provided that the Securities to
be so credited have not been previously so credited. The Securities to be so
credited shall be received and credited for such purpose by the Trustee at the
Redemption Price for
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such Securities, as specified in the Securities so to be redeemed, for
redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly.
SECTION 12.3. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Corporation will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash in the currency in which the
Securities of such series are payable (except as provided pursuant to Section
3.1) and the portion thereof, if any, that is to be satisfied by delivering and
crediting Securities pursuant to Section 12.2 and stating the basis for such
credit and that such Securities have not been previously so credited, and will
also deliver to the Trustee any Securities to be so delivered. Such Officers'
Certificate shall be irrevocable and upon its delivery the Corporation shall be
obligated to make the cash payment or payments therein referred to, if any, on
or before the succeeding sinking fund payment date. In the case of the failure
of the Corporation to deliver such Officers' Certificate (or, as required by
this Indenture, the Securities and coupons, if any, specified in such Officers'
Certificate) by the due date therefor, the sinking fund payment due on the
succeeding sinking fund payment date for such series shall be paid entirely in
cash and shall be sufficient to redeem the principal amount of the Securities of
such series subject to a mandatory sinking fund payment without the right to
deliver or credit securities as provided in Section 12.2 and without the right
to make the optional sinking fund payment with respect to such series at such
time.
Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made with
respect to the Securities of any particular series shall be applied by the
Trustee (or by the Corporation if the Corporation is acting as its own Paying
Agent) on the sinking fund payment date on which such payment is made (or, if
such payment is made before a sinking fund payment date, on the sinking fund
payment date immediately following the date of such payment) to the redemption
of Securities of such series at the Redemption Price specified in such
Securities with respect to the sinking fund. Any sinking fund moneys not so
applied or allocated by the Trustee (or, if the Corporation is acting as its own
Paying Agent, segregated and held in trust by the Corporation as provided in
Section 10.3) for such series and together with such payment (or such amount so
segregated) shall be applied in accordance with the provisions of this Section
12.3. Any and all sinking fund moneys with respect to the Securities of any
particular series held by the Trustee (or if the Corporation is acting as its
own Paying Agent, segregated and held in trust as provided in Section 10.3) on
the last sinking fund payment date with respect to Securities of such series and
not held for the payment or redemption of particular Securities of such series
shall be applied by the Trustee (or by the Corporation if the Corporation is
acting as its own Paying Agent), together with other moneys, if necessary, to be
deposited (or segregated) sufficient for the purpose, to the payment of the
principal of the Securities of such series at Maturity. The Trustee shall select
the Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 11.3 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Corporation in the manner provided in
Section 11.4. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Section
11.6. On or before each sinking fund payment date, the Corporation shall pay to
the Trustee (or, if the Corporation is acting as its own Paying Agent, the
Corporation shall segregate and hold in trust as provided in Section 10.3) in
cash a sum in the currency in which Securities of such series are payable
(except as provided pursuant to Section 3.1) equal to the
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principal and any premium and interest (including any Additional Interest)
accrued to the Redemption Date for Securities or portions thereof to be redeemed
on such sinking fund payment date pursuant to this Section 12.3.
Neither the Trustee nor the Corporation shall redeem any Securities of
a series with sinking fund moneys or mail any notice of redemption of Securities
of such series by operation of the sinking fund for such series during the
continuance of a default in payment of interest, if any, on any Securities of
such series or of any Event of Default (other than an Event of Default occurring
as a consequence of this paragraph) with respect to the Securities of such
series, except that if the notice of redemption shall have been provided in
accordance with the provisions hereof, the Trustee (or the Corporation, if the
Corporation is then acting as its own Paying Agent) shall redeem such Securities
if cash sufficient for that purpose shall be deposited with the Trustee (or
segregated by the Corporation) for that purpose in accordance with the terms of
this Article XII. Except as aforesaid, any moneys in the sinking fund for such
series at the time when any such default or Event of Default shall occur and any
moneys thereafter paid into such sinking fund shall, during the continuance of
such default or Event of Default, be held as security for the payment of the
Securities and coupons, if any, of such series; provided, however, that in case
such default or Event of Default shall have been cured or waived herein, such
moneys shall thereafter be applied on the next sinking fund payment date for the
Securities of such series on which such moneys may be applied pursuant to the
provisions of this Section 12.3.
ARTICLE XIII
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 13.1. Company's Option to Effect Defeasance or Covenant
Defeasance.
The Company may elect, at its option at any time, to have Section 13.2
or Section 13.3 applied to any Securities or any series of Securities, as the
case may be, designated pursuant to Section 3.1 as being defeasible pursuant to
such Section 13.2 or 13.3, in accordance with any applicable requirements
provided pursuant to Section 3.1 and upon compliance with the conditions set
forth below in this Article. Any such election shall be evidenced by a Board
Resolution.
SECTION 13.2. Defeasance and Discharge.
Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, the
Company shall be deemed to have been discharged from its obligations with
respect to such Securities as provided in this Section on and after the date the
conditions set forth in Section 13.4 are satisfied (hereinafter called
"Defeasance"). For this purpose, such Defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by such
Securities and to have satisfied all its other obligations under such Securities
and this Indenture insofar as such Securities are concerned (and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder: (1) the rights of Holders of such
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Securities to receive, solely from the trust fund described in Section 13.4 and
as more fully set forth in such Section, payments in respect of the principal of
and any premium and interest on such Securities when payments are due, (2) the
Company's obligations with respect to such Securities under Sections 3.5, 3.6,
10.2 and 10.3, (3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (4) this Article. Subject to compliance with this Article,
the Company may exercise its option (if any) to have this Section applied to any
Securities notwithstanding the prior exercise of its option (if any) to have
Section 13.3 applied to such Securities.
SECTION 13.3. Covenant Defeasance.
Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, (1)
the Company shall be released from its obligations under Section 8.1(3) and any
covenants provided pursuant to Section 3.1(l) (as such pertains to covenants),
9.1(3) or 9.1(4)) for the benefit of the Holders of such Securities and (2) the
occurrence of any event specified in Sections 5.1(3) (with respect to any of
Section 8.1(3) and any such covenants provided pursuant to Section 3.1(l) (as
such pertains to covenants), 9.1(3) or 9.1(4) or 901(7)), and 5.1(6) shall be
deemed not to be or result in an Event of Default, in each case with respect to
such Securities as provided in this Section on and after the date the conditions
set forth in Section 13.4 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to such Securities, 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 specified Section (to the extent so specified in the case of Section
501(3)), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.
SECTION 13.4. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section
13.2 or Section 13.3 to any Securities or any series of Securities, as the case
may be:
(1) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 6.9 and agrees to comply with the
provisions of this Article 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 benefits of the Holders
of such Securities, (A) money in an amount or (B) 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, in each case
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 any such other qualifying trustee) to pay
and discharge, the principal of and any premium and interest on such
Securities on the respective Stated Maturities or Redemption Dates in
accordance with the terms of this Indenture and such Securities. As
used
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herein, "Government Obligation" means (x) any security which is (i) a
direct obligation of the United States of America or the government
that issued the foreign currency in which such Securities are or may be
payable for the payment of which the full faith and credit of the
United States of America or such foreign government is pledged or (ii)
an obligation of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America or such
foreign government the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America
or such foreign government, which, in either case (i) or (ii), is not
callable or redeemable at the option of the issuer thereof, and (y) any
depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any Government
Obligation which is specified in Clause (x) above and held by such bank
for the account of the holder of such depositary receipt, or with
respect to any specific payment of principal of or interest on any
Government Obligation which is so specified and held, provided,
however, that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder
of such depositary receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of
principal or interest evidenced by such depositary receipt.
(2) In the event of an election to have Section 13.2 apply to
any Securities or any series of Securities, as the case may be, the
Company shall have delivered to the Trustee an Opinion of Counsel
stating that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the
date of this instrument, there has been a change in the applicable
Federal income tax law, in either case (A) or (B) to the effect that,
and based thereon such opinion shall confirm that, the Holders of such
Securities will not recognize gain or loss for Federal income tax
purposes as a result of the deposit, Defeasance and discharge to be
effected with respect to such Securities and will be subject to Federal
income tax on the same amounts, in the same manner and at the same
times as would be the case if such deposit, Defeasance and discharge
were not to occur.
(3) In the event of an election to have Section 13.3 apply to
any Securities or any series of Securities, as the case may be, the
Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Holders of such Securities will not recognize gain
or loss for Federal income tax purposes as a result of the deposit and
Covenant Defeasance to be effected with respect to such Securities and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would be the case if such deposit and
Covenant Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an
Officers' Certificate to the effect that neither such Securities nor
any other Securities of the same series, if then listed on any
securities exchange, will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to such Securities
or any other Securities shall have occurred and be continuing at the
time of such deposit or, with regard to any such event specified in
Sections 5.1(4) and (5), at any time on or prior to the 90th day after
the date of such deposit (it being understood that this condition shall
not be deemed satisfied until after such 90th day).
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(6) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming all Securities are in default within the
meaning of such Act).
(7) Such Defeasance or Covenant Defeasance shall not result in
the trust arising from such deposit constituting an investment company
within the meaning of the Investment Company Act unless such trust
shall be registered under such Act or exempt from registration
thereunder.
(8) If the money and/or Government Obligations deposited in
trust pursuant to this Section are sufficient to pay and discharge such
Securities on a Redemption Date, then at or prior to the time of such
deposit, either notice of such redemption shall have been given in
accordance with Section 11.4 or the Company shall have irrevocably
instructed the Trustee to give such notice of redemption and
arrangements satisfactory to the Trustee for the giving of such notice
by the Trustee in the name, and at the expense, of the Company shall
have been made.
(9) The Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
SECTION 13.5. Deposited Money and Government Obligations to Be Held
in Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 10.3, all
money and Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and
Section 13.6, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 13.4 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal
and any premium and interest, but money so held in trust 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 Government Obligations deposited
pursuant to Section 13.4 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.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations held by it as provided in Section 13.4 with
respect to any Securities 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 the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.
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SECTION 13.6. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 13.2 or 13.3 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 13.5 with respect to such Securities
in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.
SECTION 13.7. Qualifying Trustee.
Any trustee appointed pursuant to Section 13.4 for the purpose of
holding trust funds deposited pursuant to that Section shall be appointed under
an agreement in form acceptable to the Trustee and shall provide to the Trustee
a certificate of such trustee, upon which certificate the Trustee shall be
entitled to conclusively rely, that all conditions precedent provided for herein
to the related Defeasance or Covenant Defeasance have been complied with. In no
event shall the Trustee be liable for any acts or omissions of said trustee.
ARTICLE XIV
SUBORDINATION OF SECURITIES
SECTION 14.1. Securities Subordinate to Senior Indebtedness.
The Corporation covenants and agrees, and each Holder of a Security, by
its acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article, the payment of the
principal of and any premium and interest (including any Additional Interest) on
each and all of the Securities of each and every series are hereby expressly
made subordinate and subject in right of payment to the prior payment in full of
all Senior Indebtedness.
SECTION 14.2. No Payment When Senior Indebtedness in Default; Payment
Over of Proceeds Upon Dissolution, Etc.
If the Corporation shall default in the payment of any principal of or
any premium or interest on any Senior Indebtedness when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by declaration
of acceleration or otherwise, then, upon written notice of such default to the
Corporation by the holders of Senior Indebtedness or any trustee therefor,
unless and until such default shall have been cured or waived or shall have
ceased to exist, no direct or indirect payment (in cash, property, securities,
by set-off or otherwise) shall be made or agreed to be made on account of the
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principal of or any premium or interest (including any Additional Interest) on
any of the Securities, or in respect of any redemption, repayment, retirement,
purchase or other acquisition of any of the Securities.
In the event of (a) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceedings relating to the Corporation, its creditors or its property, (b) any
proceeding for the liquidation, dissolution or other winding up of the
Corporation, voluntary or involuntary, whether or not involving insolvency or
bankruptcy proceedings, (c) any assignment by the Corporation for the benefit of
creditors or (d) any other marshalling of the assets of the Corporation (each
such event, if any, herein sometimes referred to as a "Proceeding"), all Senior
Indebtedness (including any interest thereon accruing after the commencement of
any such proceedings) shall first be paid in full before any payment or
distribution, whether in cash, securities or other property, shall be made to
any Holder of any of the Securities on account thereof. Any payment or
distribution, whether in cash, securities or other property (other than
securities of the Corporation or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in these subordination provisions with respect to the
indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), which would
otherwise (but for these subordination provisions) be payable or deliverable in
respect of the Securities of any series shall be paid or delivered directly to
the holders of Senior Indebtedness in accordance with the priorities then
existing among such holders until all Senior Indebtedness (including any
interest thereon accruing after the commencement of any Proceeding) shall have
been paid in full.
In the event of any Proceeding, after payment in full of all sums owing
with respect to Senior Indebtedness, the Holders of the Securities, together
with the holders of any obligations of the Corporation ranking on a parity with
the Securities, shall be entitled to be paid from the remaining assets of the
Corporation the amounts at the time due and owing on account of unpaid principal
of and any premium and interest on the Securities and such other obligations
before any payment or other distribution, whether in cash, property or
otherwise, shall be made on account of any capital stock or any obligations of
the Corporation ranking junior to the Securities and such other obligations. If,
notwithstanding the foregoing, any payment or distribution of any character or
any security, whether in cash, securities or other property (other than
securities of the Corporation or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in these subordination provisions with respect to the
indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), shall be
received by the Trustee or any Holder in contravention of any of the terms
hereof and before all Senior Indebtedness shall have been paid in full, such
payment or distribution or security shall be received in trust for the benefit
of, and shall be paid over or delivered and transferred to, the holders of the
Senior Indebtedness at the time outstanding in accordance with the priorities
then existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness in full. In the event of the failure of the Trustee or any Holder
to endorse or assign any such payment, distribution or security, each holder of
Senior Indebtedness is hereby irrevocably authorized to endorse or assign the
same.
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The Trustee and the Holders, at the expense of the Corporation, shall
take such reasonable action (including, without limitation, the delivery of this
Indenture to an agent for the holders of Senior Indebtedness or consent to the
filing of a financing statement with respect hereto) as may, in the opinion of
counsel designated by the holders of a majority in principal amount of the
Senior Indebtedness at the time outstanding, be necessary or appropriate to
assure the effectiveness of the subordination effected by these provisions.
The provisions of this Section 14.2 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Corporation 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 Corporation, 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 14.3. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Corporation, at any time, except
during the pendency of the conditions described in the first paragraph of
Section 14.2 or of any Proceeding referred to in Section 14.2, from making
payments at any time of principal of and any premium or interest (including any
Additional Interest) on the Securities, or (b) the application by the Trustee of
any moneys deposited with it hereunder to the payment of or on account of the
principal of and any premium or interest (including any Additional Interest) on
the Securities or the retention of such payment by the Holders, if, at the time
of such application by the Trustee, it did not have knowledge (in accordance
with Section 14.8) that such payment would have been prohibited by the
provisions of this Article, except as provided in Section 14.8.
SECTION 14.4. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all amounts due or to become due on
all Senior Indebtedness, or the provision for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, the Holders of the Securities shall be subrogated to the extent of
the payments or distributions made to the holders of such Senior Indebtedness
pursuant to the provisions of this Article (equally and ratably with the holders
of all indebtedness of the Corporation that by its express terms is subordinated
to Senior Indebtedness of the Corporation to substantially the same extent as
the Securities are subordinated to the Senior Indebtedness and is entitled to
like rights of subrogation by reason of any payments or distributions made to
holders of such Senior Indebtedness) to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of and any
premium and interest (including any Additional Interest) on the Securities shall
be paid in full. For purposes of such subrogation, no payments or distributions
to the holders of the Senior Indebtedness of any cash, property or securities to
which the Holders of the Securities or the Trustee would be entitled except for
the provisions of this Article, and no payments over pursuant to the provisions
of this Article to the holders of Senior Indebtedness by Holders of the
Securities or the Trustee, shall, as among the Corporation, its
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creditors other than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment or distribution by the Corporation to or
on account of the Senior Indebtedness.
SECTION 14.5. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall (a) impair, as between the Corporation and the Holders of
the Securities, the obligations of the Corporation, which are absolute and
unconditional, to pay to the Holders of the Securities the principal of and any
premium and interest (including any Additional Interest) on the Securities as
and when the same shall become due and payable in accordance with their terms;
or (b) affect the relative rights against the Corporation of the Holders of the
Securities and creditors of the Corporation other than their rights in relation
to the holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder
of any Security (or to the extent expressly provided herein, the holder of any
Preferred Security) from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, including filing and voting
claims in any Proceeding, subject to the rights, if any, under this Article of
the holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
SECTION 14.6. Trustee to Effectuate Subordination.
Each Holder of a Security by his or her acceptance thereof authorizes
and directs the Trustee on his or her behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination provided
in this Article and appoints the Trustee his or her attorney-in-fact for any and
all such purposes.
SECTION 14.7. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the
Corporation or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Corporation with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof that any such
holder may have or be otherwise charged with.
Without in any way limiting the generality of the immediately preceding
paragraph, the holders of Senior Indebtedness may, at any time and from to time,
without the consent of or notice to the Trustee or the Holders of the Securities
of any series, without incurring responsibility to such Holders of the
Securities and without impairing or releasing the subordination provided in this
Article or the obligations hereunder of such Holders of the Securities to the
holders of Senior Indebtedness, do any one or more of the following: (i) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Senior Indebtedness, or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Corporation and any other Person.
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SECTION 14.8. Notice to Trustee.
The Corporation shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Corporation that would prohibit
the making of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment to or by the Trustee in
respect of the Securities, unless and until a Responsible Officer of the Trustee
shall have received written notice thereof from the Corporation or a holder of
Senior Indebtedness or from any trustee, agent or representative therefor;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section at least two Business Days prior to the date upon
which by the terms hereof any monies may become payable for any purpose
(including, the payment of the principal of and any premium on or interest
(including any Additional Interest) on any Security), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such monies and to apply the same to the purpose for which
they were received and shall not be affected by any notice to the contrary that
may be received by it within two Business Days prior to such date.
Subject to the provisions of Section 6.1, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself or herself to be a holder of Senior Indebtedness (or a trustee, agent,
representative or attorney-in-fact therefor) to establish that such notice has
been given by a holder of Senior Indebtedness (or a trustee or attorney-in-fact
therefor). In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 14.9. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Corporation referred
to in this Article, the Trustee, subject to the provisions of Section 6.1, and
the Holders of the Securities shall be entitled to conclusively rely upon any
order or decree entered by any court of competent jurisdiction in which such
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders of Securities, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Corporation, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
SECTION 14.10. Trustee Not Fiduciary for Holders of Senior
Indebtedness.
The Trustee, in its capacity as trustee under this Indenture, shall not
be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and
shall not be liable to any such holders if it shall
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in good faith mistakenly pay over or distribute to Holders of Securities or to
the Corporation or to any other Person cash, property or securities to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article or
otherwise.
SECTION 14.11. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness that
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
SECTION 14.12. Article Applicable to Paying Agents.
If at any time any Paying Agent other than the Trustee shall have been
appointed by the Corporation 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, provided however, that
Sections 14.8 and 14.11 shall not apply to the Corporation or any Affiliate of
the Corporation if the Corporation or such Affiliate acts as Paying Agent.
* * * *
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This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
EVEREST REINSURANCE HOLDINGS, INC.
By:
-----------------------------------
Name:
Title:
Attest:
---------------------------
THE CHASE MANHATTAN BANK
as Trustee and not in its individual
capacity
By:
-----------------------------------
Name:
Title:
Attest:
---------------------------
<PAGE>
EXHIBIT 4.6
S&C Draft of October 13, 1999
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AMENDED AND RESTATED TRUST AGREEMENT
among
EVEREST REINSURANCE HOLDINGS, INC.,
as Depositor
THE CHASE MANHATTAN BANK,
as Property Trustee
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
---------------------------
Dated as of October |X|, 1999
---------------------------
EVEREST RE CAPITAL TRUST
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<PAGE>
TABLE OF CONTENTS
ARTICLE I.DEFINED TERMS
SECTION 1.1. Definitions......................................................2
ARTICLE II.CONTINUATION OF THE ISSUER TRUST
SECTION 2.1. Name............................................................12
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business.....13
SECTION 2.3. Initial Contribution of Trust Property; Organizational Expenses.13
SECTION 2.4. Issuance of the Preferred Securities............................13
SECTION 2.5. Issuance of the Common Securities; Subscription and Purchase
of Notes........................................................13
SECTION 2.6. Continuation of Trust...........................................14
SECTION 2.7. Authorization to Enter into Certain Transactions................14
SECTION 2.8. Assets of Trust.................................................18
SECTION 2.9. Title to Trust Property.........................................18
ARTICLE III.PAYMENT ACCOUNT
SECTION 3.1. Payment Account.................................................18
ARTICLE IV.DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions...................................................19
SECTION 4.2. Redemption......................................................20
SECTION 4.3. Subordination of Common Securities..............................23
SECTION 4.4. Payment Procedures..............................................23
SECTION 4.5. Withholding Tax.................................................24
SECTION 4.6. Tax Returns and Reports.........................................24
SECTION 4.7. Payment of Taxes, Duties, Etc. of the Issuer Trust..............24
SECTION 4.8. Payments under Indenture or Pursuant to Direct Actions..........24
SECTION 4.9. Liability of the Holder of Common Securities....................25
SECTION 4.10. Exchanges.......................................................25
ARTICLE V.SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership...............................................26
SECTION 5.2. The Securities Certificates.....................................26
SECTION 5.3. Execution and Delivery of Securities Certificates...............26
SECTION 5.4. Book-Entry Preferred Securities.................................27
SECTION 5.5. Registration of Transfer and Exchange of Preferred Securities
Certificates....................................................29
SECTION 5.6. Mutilated, Destroyed, Lost or Stolen Securities Certificates....30
SECTION 5.7. Persons Deemed Holders..........................................31
SECTION 5.8. Access to List of Holders' Names and Addresses..................31
SECTION 5.9. Maintenance of Office or Agency.................................31
SECTION 5.10. Appointment of Paying Agents....................................32
SECTION 5.11. Ownership of Common Securities by Depositor.....................32
SECTION 5.12. Notices to Clearing Agency......................................33
SECTION 5.13. Rights of Holders; Waivers of Past Defaults.....................33
i
<PAGE>
ARTICLE VI.ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Voting Rights....................................36
SECTION 6.2. Notice of Meetings..............................................37
SECTION 6.3. Meetings of Holders of the Preferred Securities.................37
SECTION 6.4. Voting Rights...................................................37
SECTION 6.5. Proxies, Etc....................................................38
SECTION 6.6. Holder Action by Written Consent................................38
SECTION 6.7. Record Date for Voting and Other Purposes.......................38
SECTION 6.8. Acts of Holders.................................................38
SECTION 6.9. Inspection of Records...........................................40
ARTICLE VII.REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property Trustee and the
Delaware Trustee................................................40
SECTION 7.2. Representations and Warranties of Depositor.....................41
ARTICLE VIII.THE ISSUER TRUSTEES
SECTION 8.1. Certain Duties and Responsibilities.............................42
SECTION 8.2. Certain Notices.................................................44
SECTION 8.3. Certain Rights of Property Trustee..............................45
SECTION 8.4. Not Responsible for Recitals or Issuance of Securities..........48
SECTION 8.5. May Hold Securities.............................................48
SECTION 8.6. Compensation; Indemnity; Fees...................................48
SECTION 8.7. Corporate Property Trustee Required; Eligibility of Issuer
Trustees........................................................49
SECTION 8.8. Conflicting Interests...........................................50
SECTION 8.9. Co-Trustees and Separate Trustee................................50
SECTION 8.10. Resignation and Removal; Appointment of Successor...............51
SECTION 8.11. Acceptance of Appointment by Successor..........................53
SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business.....54
SECTION 8.13. Preferential Collection of Claims Against Depositor or Issuer
Trust...........................................................54
SECTION 8.14. Property Trustee May File Proofs of Claim.......................54
SECTION 8.15. Reports by Property Trustee.....................................55
SECTION 8.16. Reports to the Property Trustee.................................55
SECTION 8.17. Evidence of Compliance with Conditions Precedent................56
SECTION 8.18. Number of Issuer Trustees.......................................56
SECTION 8.19. Delegation of Power.............................................56
SECTION 8.20. Appointment of Administrative Trustees..........................56
[SECTION 8.21. Delaware Trustee...............................................57
ARTICLE IX.TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1. Dissolution Upon Expiration Date................................57
SECTION 9.2. Early Termination...............................................57
SECTION 9.3. Termination.....................................................58
SECTION 9.4. Liquidation.....................................................58
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of Issuer
Trust...........................................................60
ARTICLE X.MISCELLANEOUS PROVISIONS
ii
<PAGE>
SECTION 10.1. Limitation of Rights of Holders.................................61
SECTION 10.2. Agreed Tax Treatment of Issuer Trust and Trust Securities.......61
SECTION 10.3. Amendment.......................................................61
SECTION 10.4. Separability....................................................63
SECTION 10.5. Governing Law...................................................63
SECTION 10.6. Payments Due on Non-Business Day................................63
SECTION 10.7. Successors......................................................64
SECTION 10.8. Headings........................................................64
SECTION 10.9. Reports, Notices and Demands....................................64
SECTION 10.10.Agreement Not to Petition.......................................65
SECTION 10.11.Trust Indenture Act; Conflict with Trust Indenture Act..........65
SECTION 10.12.Acceptance of Terms of Trust Agreement, Guarantee Agreement
and Indenture........................................66
iii
<PAGE>
Exhibit A Certificate of Trust
Exhibit B Form of Letter of Representations
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Capital Securities Certificate
iv
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of October |X|, 1999,
among (i) Everest Reinsurance Holdings, Inc., a Delaware corporation (including
any successors or assigns, the "Depositor"), (ii) The Chase Manhattan Bank, a
New York banking corporation, as property trustee (in such capacity, the
"Property Trustee" and, in its separate corporate capacity and not in its
capacity as Property Trustee, the "Bank"), (iii) Chase Manhattan Bank Delaware,
a Delaware banking corporation, as Delaware trustee (in such capacity, the
"Delaware Trustee"), (iv) Stephen L. Limauro, an individual, Robert T. Lupo, an
individual and Frank N. Lopapa, an individual, each of whose address is c/o
Everest Reinsurance Holdings, Inc., 477 Martinsville Road, P.O. Box 830, Liberty
Corner, New Jersey 07938 (each an "Administrative Trustee" and collectively the
"Administrative Trustees" and together with the Property Trustee and the
Delaware Trustee the "Issuer Trustees") and (v) the several Holders, as
hereinafter defined.
WITNESSETH
WHEREAS, the Depositor, the Property Trustee, the Delaware Trustee and
one of the Administrative Trustees have heretofore created a Delaware business
trust pursuant to the Delaware Business Trust Act by entering into a Trust
Agreement, dated as of September 17, 1999 (the "Original Trust Agreement"), and
by the execution and filing by the Delaware Trustee with the Secretary of State
of the State of Delaware of the Certificate of Trust, filed on September 17,
1999, attached as Exhibit A; and
WHEREAS, the Depositor and the Issuer Trustees desire to amend and
restate the Original Trust Agreement in its entirety as set forth herein to
provide for, among other things, (i) the issuance of the Common Securities by
the Issuer Trust to the Depositor, (ii) the issuance and sale of the Preferred
Securities by the Issuer Trust pursuant to the Underwriting Agreement and (iii)
the acquisition by the Issuer Trust from the Depositor of all of the right,
title and interest in the Notes;
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each party, for the benefit of the
other parties and for the benefit of the Holders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I.
DEFINED TERMS
SECTION 1.1. Definitions.
<PAGE>
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) The terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(b) All other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) The words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation";
(d) All accounting terms used but not defined herein have the
meanings assigned to them in accordance with United States generally
accepted accounting principles;
(e) Unless the context otherwise requires, any reference to an
"Article", a "Section" or an "Exhibit" refers to an Article, a Section
or an Exhibit, as the case may be, of or to this Trust Agreement; and
(f) The words "hereby", "herein", "hereof" and "hereunder" and
other words of similar import refer to this Trust Agreement as a whole
and not to any particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest (as
defined in the Indenture) paid by the Depositor on a Like Amount of Notes for
such period.
"Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.
"Additional Taxes" has the meaning specified in Section 1.1 of the
Indenture.
"Administrative Trustee" means each of the Persons appointed in
accordance with Section 8.20 solely in such Person's capacity as Administrative
Trustee of the Issuer Trust and not in such Person's individual capacity, or any
successor Administrative Trustee appointed as herein provided.
"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
2
<PAGE>
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.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Book-Entry Preferred Security, the rules and procedures
of the Clearing Agency for such Book-Entry Preferred Security, in each case to
the extent applicable to such transaction and as in effect from time to time.
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in
the premises judging such Person a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization, arrangement,
adjudication or composition of or in respect of such Person under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law, or appointing a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of such Person or of
any substantial part of its property or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 90 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of
a petition or answer or consent seeking reorganization or relief under
any applicable Federal or State bankruptcy, insolvency, reorganization
or other similar law, or the consent by it to the filing of any such
petition or to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or similar official) of such Person or of any
substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due and its
willingness to be adjudicated a bankrupt, or the taking of corporate
action by such Person in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.10.
"Board of Directors" means the board of directors of the Depositor or
any other duly authorized committee of the board of directors of the Depositor.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of
3
<PAGE>
Directors and to be in full force and effect on the date of such certification,
and delivered to the Issuer Trustees.
"Book-Entry Preferred Security" means a Preferred Security, the
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 5.4.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or (c) a day on which the
Property Trustee's Corporate Trust Office or the Corporate Trust Office of the
Note Trustee is closed for business.
["Cedel" means Cedelbank (or any successor securities clearing
agency).]
"Certificate Depository Agreement" means the agreement among the Issuer
Trust, the Depositor and DTC, as the initial Clearing Agency, dated as of the
Closing Date, substantially in the form attached as Exhibit B, as the same may
be amended and supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. DTC will be the initial
Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the Time of Delivery, which date is also the date
of execution and delivery of this Trust Agreement.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Securities and Exchange 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 Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Common Security" means an undivided beneficial interest in the assets
of the Issuer Trust, having a Liquidation Amount of $25 and having the rights
provided therefor in this Trust
4
<PAGE>
Agreement, including the right to receive Distributions and a Liquidation
Distribution to the extent provided herein.
"Corporate Trust Office"means (i) when used with respect to the
Property Trustee, the office of the Property Trustee located at 379 Tharnall
Street, 12th Floor, Edison, New Jersey 08837, and (ii) when used with respect to
the Note Trustee, the office of the Note Trustee located in at 379 Tharnall
Street, 12th Floor, Edison, New Jersey 08837.
"Definitive Preferred Securities Certificates" means either or both (as
the context requires) of (i) Preferred Securities Certificates issued as Global
Preferred Securities as provided in Section 5.2 or 5.4, and (ii) Preferred
Securities Certificates issued in certificated, fully registered form as
provided in Section 5.2, 5.4 or 5.5.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., or any successor statute
thereto, in each case as amended from time to time.
"Delaware Trustee" means the Person identified as the "Delaware
Trustee" in the preamble to this Trust Agreement, solely in its capacity as
Delaware Trustee of the trust heretofore created and continued hereunder and not
in its individual capacity, or its successor in interest in such capacity, or
any successor Delaware trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
"DTC" means The Depository Trust Company or any successor thereto.
"Early Termination Event" has the meaning specified in Section 9.2.
["Euroclear" means the Euroclear Clearance System (or any successor
securities clearing agency), as operated by Morgan Guaranty Trust Company of New
York, Brussels office.]
["European Preferred Securities" means Preferred Securities that are
sold to investors in Europe and settled through Euroclear and Cedel.]
"Event of Default" means any one of the following events (whatever the
reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of law or
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pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) the occurrence of a Note Event of Default; or
(b) default by the Issuer Trust in the payment of any Distribution when
it becomes due and payable, and continuation of such default for a
period of 30 days; or
(c) default by the Issuer Trust in the payment of any Redemption Price
of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in this Trust Agreement
(other than those specified in clause (b) or (c) above) and
continuation of such default or breach for a period of 60 days after
there has been given, by registered or certified mail, to the Issuer
Trustees and to the Depositor by the Holders of at least 33% in
aggregate Liquidation Amount of the Outstanding Preferred 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, unless Holders in aggregate Liquidation Amount of
Outstanding Preferred Securities not less than the aggregate
Liquidation Amount of Outstanding Preferred Securities that gave such
notice shall agree in writing to an extension of such period prior to
its expiration; provided, however, that the Holders of such aggregate
Liquidation Amount of Outstanding Preferred Securities shall be deemed
to have agreed to an extension of such period if corrective action is
initiated by the Issuer Trustees within such period and is being
diligently pursued; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee if a successor Property Trustee has not been appointed within
90 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, and any
successor statute thereto, in each case as amended from time to time.
"Expense Agreement" means the Agreement as to Expenses and Liabilities,
dated as of the Closing Date, between the Depositor, in its capacity as holder
of the Common Securities, and the Issuer Trust, substantially in the form
attached as Exhibit D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Global Preferred Security" means a Preferred Securities Certificate
evidencing ownership of Book-Entry Preferred Securities.
"Guarantee Agreement" means the Guarantee Agreement executed and
delivered by the Depositor and The Chase Manhattan Bank, as guarantee trustee,
contemporaneously with the
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execution and delivery of this Trust Agreement, for the benefit of the holders
of the Preferred Securities, as amended from time to time.
"Holder" means a Person in whose name a Trust Security or Trust
Securities are registered in the Securities Register; any such Person shall be
deemed to be a beneficial owner within the meaning of the Delaware Business
Trust Act.
"Indenture" means the Junior Subordinated Indenture, dated as of
October |X|, 1999, between the Depositor and the Note Trustee, as trustee, as
amended or supplemented from time to time.
"Investment Company Act" means the Investment Company Act of 1940, or
any successor statute thereto, in each case as amended from time to time.
"Investment Company Event" means the receipt by the Issuer Trust 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, there is more than an insubstantial risk that the Issuer
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 issuance of the Preferred Securities.
"Issuer Trust" means the Delaware business trust known as "Everest Re
Capital Trust" which was formed on September 17, 1999 under the Delaware
Business Trust Act pursuant to the Original Trust Agreement and the filing of
the Certificate of Trust, and continued pursuant to this Trust Agreement.
"Issuer Trustees" has the meaning specified in the preamble to this
Trust Agreement.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of any Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Notes to be contemporaneously redeemed in accordance with the
Indenture, the proceeds of which will be used to pay the Redemption Price of
such Trust Securities, (b) with respect to a distribution of Notes to Holders of
Trust Securities in connection with a dissolution or liquidation of the Issuer
Trust, Notes having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Notes are distributed, and (c) with
respect to any distribution of
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Additional Amounts to Holders of Trust Securities, Notes having a principal
amount equal to the Liquidation Amount of the Trust Securities in respect of
which such distribution is made.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
"Liquidation Date" means the date on which assets are to be distributed
to Holders in accordance with Section 9.4 hereunder following dissolution of the
Issuer Trust.
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"Majority in Liquidation Amount of the Preferred Securities" or
"Majority in Liquidation Amount of the Common Securities" means, except as
provided by the Trust Indenture Act, Preferred Securities or Common Securities,
as the case may be, representing more than 50% of the aggregate Liquidation
Amount of all then Outstanding Preferred Securities or Common Securities, as the
case may be.
"Note Event of Default" means any "Event of Default" specified in
Section 5.1 of the Indenture.
"Note Redemption Date" means, with respect to any Notes to be redeemed
under the Indenture, the date fixed for redemption of such Notes under the
Indenture, including any date fixed for redemption pursuant to the occurrence of
a Tax Event or an Investment Company Event.
"Note Trustee" means the Person identified as the "Trustee" in the
Indenture, solely in its capacity as Trustee pursuant to the Indenture and not
in its individual capacity, or its successor in interest in such capacity, or
any successor Trustee appointed as provided in the Indenture.
"Notes" means the Depositor's |X|% Junior Subordinated Deferrable
Interest Notes issued pursuant to the Indenture.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, 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 Depositor, and delivered to the Issuer Trustees. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Trust Agreement shall include:
(a) a statement by each officer signing the Officers' Certificate that
such officer 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 such officer in rendering the Officers'
Certificate;
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(c) a statement that 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 such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Depositor or any Affiliate of the Depositor.
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding", when used with respect to Trust Securities, means, as of
the date of determination, all Trust Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Property Trustee or
delivered to the Property Trustee for cancellation;
(b) Trust Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property
Trustee or any Paying Agent; provided, however, that if such Trust
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Trust Agreement; and
(c) Trust Securities that have been paid or in exchange for or in lieu
of which other Trust Securities have been executed and delivered
pursuant to Sections 5.4, 5.5, 5.6 and 5.11;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Issuer Trustee or any Affiliate
of the Depositor or of any Issuer Trustee shall be disregarded and deemed not to
be Outstanding, except that (i) in determining whether any Issuer Trustee shall
be protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Preferred Securities that such Issuer Trustee
knows to be so owned shall be so disregarded, and (ii) the foregoing shall not
apply at any time when all of the Outstanding Preferred Securities are owned by
the Depositor, one or more of the Issuer Trustees and/or any such Affiliate.
Preferred Securities so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Administrative Trustees the pledgee's right so to act with respect to such
Preferred Securities and that the pledgee is not the Depositor or any Affiliate
of the Depositor.
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"Owner" means each Person who is the beneficial owner of Book-Entry
Preferred Securities as reflected in the records of the Clearing Agency or, if a
Clearing Agency Participant is not the Owner, then as reflected in the records
of a Person maintaining an account with such Clearing Agency (directly or
indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.10 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee for the benefit of the Holders
in which all amounts paid in respect of the Notes will be held and from which
the Property Trustee, through the Paying Agent, shall make payments to the
Holders in accordance with Sections 4.1 and 4.2.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, company,
limited liability company, trust, unincorporated association, or government or
any agency or political subdivision thereof, or any other entity of whatever
nature.
"Preferred Security" means an undivided beneficial interest in the
assets of the Issuer Trust, having a Liquidation Amount of $25 and having the
rights provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution to the extent provided herein.
"Preferred Securities Certificate" means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as Exhibit
E.
"Property Trustee" means the Person identified as the "Property
Trustee" in the preamble to this Trust Agreement, solely in its capacity as
Property Trustee of the Issuer Trust and not in its individual capacity, or its
successor in interest in such capacity, or any successor property trustee
appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided, however, that each Note Redemption Date and the stated
maturity of the Notes shall be a Redemption Date for a Like Amount of Trust
Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor upon the concurrent redemption of a Like Amount of
Notes.
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"Relevant Trustee" has the meaning specified in Section 8.10.
"Securities Act" means the Securities Act of 1933, and any successor
statute thereto, in each case as amended from time to time.
"Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.5.
"Successor Preferred Securities" of any particular Preferred Securities
Certificate means every Preferred Securities Certificate issued after, and
evidencing all or a portion of the same beneficial interest in the Issuer Trust
as that evidenced by, such particular Preferred Securities Certificate; and, for
the purposes of this definition, any Preferred Securities Certificate executed
and delivered under Section 5.6 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Preferred Securities Certificate shall be deemed to
evidence the same beneficial interest in the Issuer Trust as the mutilated,
destroyed, lost or stolen Preferred Securities Certificate.
"Tax Event" means the receipt by the Issuer Trust of an Opinion of
Counsel experienced in such matters to the effect that, as a result of (a) 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 (b) any judicial decision or any
official administrative pronouncement (including any private letter ruling,
technical advice memorandum or field service advice) or regulatory procedure (an
"Administrative Action"), regardless of whether such judicial decision or
Administrative Action is issued to or in connection with a proceeding involving
the Depositor or the Issuer Trust and whether or not subject to review or
appeal, which amendment, change, Administrative Action or decision is enacted,
promulgated or announced, in each case, on or after the date hereof, there is
more than an insubstantial risk that (i) the Issuer Trust is, or will be within
90 days of the date of such opinion, subject to United States federal income tax
with respect to income received or accrued on the Junior Subordinated Notes,
(ii) interest payable by the Depositor or original issue discount accruing on
the Notes is not, or within 90 days of the date of such opinion, will not be,
deductible by the Depositor, in whole or in part, for United States federal
income tax purposes, or (iii) the Issuer 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.
"Time of Delivery" has the meaning specified in the Underwriting
Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including (a) all exhibits, and (b) for all
purposes of this Trust Agreement and any such
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modification, amendment or supplement, the provisions of the Trust Indenture Act
that are deemed to be a part of and govern this Trust Agreement and any such
modification, amendment or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that if
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.
"Trust Property" means (a) the Notes, (b) any cash on deposit in, or
owing to, the Payment Account, and (c) all proceeds and rights in respect of the
foregoing and any other property and assets for the time being held or deemed to
be held by the Property Trustee pursuant to the trusts of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Underwriting Agreement" means the Pricing Agreement, dated as of
September |X|, 1999, among the Issuer Trust, the Depositor and the Underwriters
named therein, as the same may be amended from time to time and includes the
Underwriting Agreement incorporated therein by reference.
"Vice President," when used with respect to the Depositor, means any
duly appointed vice president, whether or not designated by a number or a word
or words added before or after the title "vice president."
ARTICLE II.
CONTINUATION OF THE ISSUER TRUST
SECTION II.1. Name.
The trust continued hereby shall be known as "Everest Re Capital
Trust", as such name may be modified from time to time by the Administrative
Trustees following written notice to the Holders of Trust Securities and the
other Issuer Trustees, in which name the Issuer Trustees may conduct the
business of the Issuer Trust, make and execute contracts and other instruments
on behalf of the Issuer Trust and sue and be sued.
SECTION II.2. Office of the Delaware Trustee; Principal Place of
Business.
The address of the Delaware Trustee in the State of Delaware is Chase
Manhattan Bank Delaware, 1201 Market Street, 8th Floor, Wilmington, Delaware
19801; Attention: Capital Markets Fiduciary Services, or such other address in
the State of Delaware as the Delaware
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Trustee may designate by written notice to the Holders, the Depositor, the
Property Trustee and the Administrative Trustees. The principal executive office
of the Issuer Trust is 477 Martinsville Road, P.O. Box 830, Liberty Corner, New
Jersey 07938, Attention: |X|.
SECTION II.3. Initial Contribution of Trust Property;
Organizational Expenses.
The Property Trustee acknowledges receipt from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Issuer Trust as they arise or shall, upon request of any Issuer
Trustee, promptly reimburse such Issuer Trustee for any such expenses paid by
such Issuer Trustee. The Depositor shall make no claim upon the Trust Property
for the payment of such expenses.
SECTION II.4. Issuance of the Preferred Securities.
On October |X|, 1999, the Depositor, both on its own behalf and on
behalf of the Issuer Trust pursuant to the Original Trust Agreement, executed
and delivered the Underwriting Agreement. Contemporaneously with the execution
and delivery of this Trust Agreement, an Administrative Trustee, on behalf of
the Issuer Trust, shall execute in accordance with Sections 5.2, 5.3 and 8.9(a)
and the Property Trustee shall deliver to the underwriters, Preferred Securities
Certificates, registered in the names requested by the underwriters, evidencing
an aggregate of |X| Preferred Securities having an aggregate Liquidation Amount
of $|X|, against receipt of the aggregate purchase price of such Preferred
Securities of $|X| by the Property Trustee.
SECTION II.5. Issuance of the Common Securities; Subscription and
Purchase of Notes.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Issuer Trust, shall
execute in accordance with Sections 5.2, 5.3 and 8.9(a) and the Property Trustee
shall deliver to the Depositor Common Securities Certificates, registered in the
name of the Depositor, evidencing an aggregate of |X| Common Securities having
an aggregate Liquidation Amount of $|X|, against receipt of the aggregate
purchase price of such Common Securities of $|X|, to the Property Trustee.
Contemporaneously therewith, an Administrative Trustee, on behalf of the Issuer
Trust, shall subscribe for and purchase from the Depositor Notes, registered in
the name of the Property Trustee, not in its individual capacity but solely as
Property Trustee, on behalf of the Issuer Trust and having an aggregate
principal amount equal to $|X|, and, in satisfaction of the purchase price for
such Notes, the Property Trustee, on behalf of the Issuer Trust, shall deliver
to the Depositor the sum of $|X| (being the sum of the amounts delivered to the
Property Trustee pursuant to (i) the second sentence of Section 2.4, and (ii)
the first sentence of this Section 2.5).
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SECTION II.6. Continuation of Trust.
The exclusive purposes and functions of the Issuer Trust are (a) to
issue and sell Trust Securities and use the proceeds from such sale to acquire
the Notes, and (b) to engage in only those activities necessary, or incidental
thereto. The Delaware Trustee, Property Trustee and the Administrative Trustees
are trustees of the Issuer Trust, and have all the rights, powers and duties to
the extent set forth herein. The Issuer Trustees hereby acknowledge that they
are trustees of the Trust. The Property Trustee hereby declares that it will
hold the Trust Property upon and subject to the conditions set forth herein for
the benefit of the Issuer Trust and the Holders. The Administrative Trustees
shall have all rights, powers and duties set forth herein and in accordance with
applicable law with respect to accomplishing the purposes of the Issuer Trust.
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 Property
Trustee or the Administrative Trustees set forth herein. The Delaware Trustee
shall be one of the trustees of the Issuer Trust for the sole and limited
purpose of fulfilling the requirements of Section 3807 of the Delaware Business
Trust Act and for taking such actions as are required to be taken by a Delaware
trustee under the Delaware Business Trust Act. The Delaware Trustee, the
Property Trustee and one of the Administrative Trustee, as the trustees under
the Original Trust Agreement, filed the Certificate of Trust of the Trust with
the office of the Secretary of State of Delaware, a copy of which is attached
hereto as Exhibit A, and such filing is hereby confirmed and ratified.
SECTION II.7. Authorization to Enter into Certain Transactions.
(a) The Issuer Trustees shall conduct the affairs of the Issuer Trust
in accordance with the terms of this Trust Agreement. Subject to the limitations
set forth in paragraph (b) of this Section, and in accordance with the following
provisions (i) and (ii), the Issuer Trustees shall have the authority to enter
into all transactions and agreements determined by the Issuer Trustees to be
appropriate in exercising the authority, express or implied, otherwise granted
to the Issuer Trustees, under this Trust Agreement, and to perform all acts in
furtherance thereof, including the following:
(i) As among the Issuer Trustees, each Administrative Trustee
shall have the power and authority to act on behalf of the Issuer Trust
with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Issuer Trust to enter into, and to
execute, deliver and perform on behalf of the Issuer Trust,
the Expense Agreement and the Certificate Depository Agreement
and such other agreements as may be necessary or desirable in
connection with the purposes and function of the Issuer Trust;
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(C) assisting in the registration of the Preferred
Securities under the Securities Act, and under applicable
state securities or blue sky laws and the qualification of
this Trust Agreement as a trust indenture under the Trust
Indenture Act;
(D) assisting in the listing of the Preferred
Securities upon such securities exchange or exchanges as shall
be determined by the Depositor, with the registration of the
Preferred Securities under the Exchange Act, and with the
preparation and filing of all periodic and other reports and
other documents pursuant to the foregoing;
(E) assisting in the sending of notices (other than
notices of default) and other information regarding the Trust
Securities and the Notes to the Holders in accordance with
this Trust Agreement;
(F) the appointment of a Paying Agent, authenticating
agent and Securities Registrar in accordance with this Trust
Agreement;
(G) execution of the Trust Securities on behalf of
the Issuer Trust in accordance with this Trust Agreement;
(H) execution and delivery of closing certificates,
if any, pursuant to the Underwriting Agreement and application
for a taxpayer identification number for the Issuer Trust;
(I) unless otherwise required by the Delaware
Business Trust Act or the Trust Indenture Act, to execute on
behalf of the Issuer Trust (either acting alone or together
with the other Administrative Trustees) any documents that the
Administrative Trustees have the power to execute pursuant to
this Trust Agreement; and
(J) the taking of any action incidental to the
foregoing as the Administrative Trustees may from time to time
determine is necessary or advisable to give effect to the
terms of this Trust Agreement.
(ii) As among the Issuer Trustees, the Property Trustee shall
have the power, duty and authority to act on behalf of the Issuer Trust
with respect to the following matters:
(A) the establishment of the Payment Account;
(B) the receipt and holding of legal title of the
Notes;
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(C) the collection of interest, principal and any
other payments made in respect of the Notes and the holding of
such amounts in the Payment Account;
(D) the distribution through the Paying Agent of
amounts distributable to the Holders in respect of the Trust
Securities;
(E) the exercise of all of the rights, powers and
privileges of a holder of the Notes in accordance with the
terms of this Trust Agreement;
(F) the sending of notices of default and other
information regarding the Trust Securities and the Notes to
the Holders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement,
the winding up of the affairs of and liquidation of the Issuer
Trust and the preparation, execution and filing of the
certificate of cancellation with the Secretary of State of the
State of Delaware; and
(I) the taking of any action incidental to the
foregoing as the Property Trustee may from time to time
determine is necessary or advisable to give effect to the
terms of this Trust Agreement and protect and conserve the
Trust Property for the benefit of the Holders (without
consideration of the effect of any such action on any
particular Holder).
(b) So long as this Trust Agreement remains in effect, the Issuer Trust
(or the Issuer Trustees acting on behalf of the Issuer Trust) shall not
undertake any business, activities or transaction except as expressly provided
herein or contemplated hereby. In particular, the Issuer Trustees shall not (i)
acquire any investments or engage in any activities not authorized by this Trust
Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or
otherwise dispose of any of the Trust Property or interests therein, including
to Holders, except as expressly provided herein, (iii) take any action that
would reasonably be expected to cause the Issuer Trust to become taxable as a
corporation or classified as other than a grantor trust for United States
federal income tax purposes, (iv) take or consent to any action that would cause
the Notes to be treated as other than indebtedness of the Depositor for United
States federal income tax purposes, (v) incur any indebtedness for borrowed
money or issue any other debt, or (vi) take or consent to any action that would
result in the placement of a Lien on any of the Trust Property. The Issuer
Trustees shall defend all claims and demands of all Persons at any time claiming
any Lien on any
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of the Trust Property adverse to the interest of the Issuer Trust or the Holders
in their capacity as Holders.
(c) In connection with the issue and sale of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Issuer Trust
with respect to, or effect on behalf of the Issuer Trust, the following (and any
actions taken by the Depositor in furtherance of the following prior to the date
of this Trust Agreement are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Issuer Trust with the
Commission and the execution on behalf of the Issuer Trust of a
registration statement on the appropriate form in relation to the
Preferred Securities, including any amendments thereto and the taking
of any action necessary or desirable to sell the Preferred Securities
in a transaction or a series of transactions pursuant thereto;
(ii) the determination of the States or other jurisdictions,
if any, in which to take appropriate action to qualify or register for
sale all or part of the Preferred Securities and the determination of
any and all such acts, other than actions that must be taken by or on
behalf of the Issuer Trust, and the advice to the Issuer Trust of
actions they must take on behalf of the Issuer Trust, and the
preparation for execution and filing of any documents to be executed
and filed by the Issuer Trust or on behalf of the Issuer Trust, as the
Depositor deems necessary or advisable in order to comply with the
applicable laws of any such States in connection with the sale of the
Preferred Securities;
(iii) the preparation for filing by the Issuer Trust and
execution on behalf of the Issuer Trust of any application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(iv) the preparation for filing by the Issuer Trust with the
Commission and the execution on behalf of the Issuer Trust of any
registration statement on Form 8-A relating to Preferred Securities
under Section 12(b) or 12(g) of the Exchange Act, including any
amendments thereto;
(v) the negotiation of the terms of, and the execution and
delivery of, the Underwriting Agreement providing for the sale of the
Preferred Securities; and
(vi) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Issuer Trust
and to operate the Issuer Trust so that the Issuer Trust will not be deemed to
be an "investment company" required to be
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registered under the Investment Company Act, and will not be taxable as a
corporation or classified as other than a grantor trust for United States
federal income tax purposes and so that the Notes will be treated as
indebtedness of the Depositor for United States federal income tax purposes. In
this connection, each Administrative Trustee is authorized to take any action,
not inconsistent with applicable law, the Certificate of Trust or this Trust
Agreement, that such Administrative Trustee determine in his or her discretion
to be necessary or desirable for such purposes, as long as such action does not
adversely affect in any material respect the interests of the Holders of the
Outstanding Preferred Securities. In no event shall the Administrative Trustees
be liable to the Issuer Trust or the Holders for any failure to comply with this
section that results from a change in law or regulation or in the interpretation
thereof.
SECTION II.8. Assets of Trust.
The assets of the Issuer Trust shall consist of the Trust Property.
SECTION II.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee in trust for the benefit of the Issuer Trust and the
Holders in accordance with this Trust Agreement.
ARTICLE III.
PAYMENT ACCOUNT
SECTION III.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and its agents shall have
exclusive control and sole right of withdrawal with respect to the Payment
Account for the purpose of making deposits in and withdrawals from the Payment
Account in accordance with this Trust Agreement. All monies and other property
deposited or held from time to time in the Payment Account shall be held by the
Property Trustee in the Payment Account for the exclusive benefit of the Holders
and for distribution as herein provided, including (and subject to) any priority
of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on, and any other
payments or proceeds with respect to, the Notes. Amounts held in the Payment
Account shall not be invested by the Property Trustee pending distribution
thereof.
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ARTICLE IV.
DISTRIBUTIONS; REDEMPTION
SECTION IV.1. Distributions.
(a) The Trust Securities represent undivided beneficial interests in
the Trust Property, and Distributions (including of Additional Amounts) will be
made on the Trust Securities at the rate and on the dates that payments of
interest (including any Additional Interest, as defined in the Indenture) are
made on the Notes. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative,
and shall accumulate whether or not there are funds of the Trust
available for the payment of Distributions. Distributions shall
accumulate from October |X|, 1999, and, except as provided in clause
(ii) below, shall be payable quarterly in arrears on |X|, |X|, |X| and
|X| of each year, commencing on |X|. If any date on which a
Distribution is otherwise payable on the Trust Securities is not a
Business Day, then the payment of such Distribution shall be made on
the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that,
if such Business Day is in the next succeeding calendar year, 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 on
which such payment was originally payable (each date on which
distributions are payable in accordance with this Section 4.1(a), a
"Distribution Date").
(ii) In the event (and to the extent) that the Depositor
exercises its right under the Indenture to defer the payment of
interest on the Notes, quarterly Distributions on the Preferred
Securities shall be deferred.
(iii) Distributions shall accumulate in respect of the Trust
Securities at a rate of |X|% per annum of the Liquidation Amount of the
Trust Securities. The amount of Distributions payable for any period
less than a full Distribution period shall be computed on the basis of
a 360-day year of twelve 30-day months and the actual number of days
elapsed in a partial month in a period. Distributions payable for each
full Distribution period will be computed by dividing the rate per
annum by four. The amount of Distributions payable for any period shall
include any Additional Amounts in respect of such period.
(iv) Distributions on the Trust Securities shall be made by
the Property Trustee from the Payment Account and shall be payable on
each Distribution Date only to the extent that the Issuer Trust has
funds then on hand and available in the Payment Account for the payment
of such Distributions.
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(b) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities at the close of business on the
relevant record date, which shall be at the close of business on the fifteenth
day (whether or not a Business Day) next preceding the relevant Distribution
Date. Distribution payable on any Trust Securities that are not punctually paid
on any Distribution Date as a result of the Depositor having failed to make an
interest payment under the Notes will cease to be payable to the Person in whose
name such Trust Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Trust Securities are registered on the special record date or other specified
date for determining Holders entitled to such defaulted interested established
in accordance with the Indenture.
SECTION IV.2. Redemption.
(a) On each Note Redemption Date and on the stated maturity of the
Notes, the Issuer Trust (subject, in the case of redemption, to the Property
Trustee having received notice of such redemption and of the principal amount to
be redeemed from the Depositor no later than 45 days prior to such Note
Redemption Date) will be required to redeem a Like Amount of Trust Securities at
the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Securities Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price or if the Redemption Price cannot
be calculated prior to the time the notice is required to be sent, the
estimate of the Redemption Price provided pursuant to (and as defined
in) the Indenture, as calculated by the Depositor, together with a
statement that it is an estimate and that the actual Redemption Price
will be calculated on the third Business Day prior to the Redemption
Date (and if an estimate is provided, a further notice shall be sent of
the actual Redemption Price on the date that such Redemption Price is
calculated);
(iii) if less than all the Outstanding Trust Securities are to
be redeemed, the identification and the aggregate Liquidation Amount of
the particular Trust Securities to be redeemed;
(iv) that on the Redemption Date the Redemption Price will
become due and payable upon each such Trust Security to be redeemed and
that Distributions thereon will
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cease to accumulate on and after said date, except as provided in
Section 4.2(d) below; and
(v) the place or places where the Trust Securities are to be
surrendered for the payment of the Redemption Price; and
(vi) such other provision as the Property Trustee deems
relevant.
The Issuer Trust in issuing the Trust Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall
indicate the "CUSIP" numbers of the Trust Securities in notices of redemption
and related materials as a convenience to Holders; provided, however, that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Trust Securities or as contained in any
notice of redemption and related materials.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Notes. Redemptions of the Trust Securities shall be made and the
Redemption Price shall be payable on each Redemption Date only to the extent
that the Issuer Trust has funds then on hand and available in the Payment
Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Preferred Securities, then by [10:00 A.M.], New York City time, on the
Redemption Date, the Depositor shall deposit sufficient funds with the Property
Trustee to pay the Redemption Price. If such deposit has been made by such time,
then 12:00 noon, New York City time, on the Redemption Date, subject to Section
4.2(c), the Property Trustee will, with respect to Book-Entry Preferred
Securities, irrevocably deposit with the Clearing Agency for such Book-Entry
Preferred Securities, to the extent available therefor, funds sufficient to pay
the applicable Redemption Price and will give such Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the Holders of the
Preferred Securities. With respect to Preferred Securities that are not
Book-Entry Preferred Securities, the Property Trustee, subject to Section
4.2(c), will irrevocably deposit with the Paying Agent or Paying Agents, to the
extent available therefor, funds sufficient to pay the applicable Redemption
Price and will give the Paying Agent or Paying Agents irrevocable instructions
and authority to pay the Redemption Price to the Holders of the Preferred
Securities upon surrender of their Preferred Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities called for redemption shall be payable
to the Holders of such Trust Securities as they appear on the Securities
Register 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 Holders holding Trust Securities so
called for redemption will cease, except the right of such Holders to receive
the Redemption Price and any Distribution payable in respect of the Trust
Securities on or prior to the Redemption Date, but without interest, and such
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Securities will cease to be Outstanding. In the event that any date on which any
Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (without any interest or other payment in respect of any
such delay), except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day, in each
case, with the same force and effect as if made on such date. In the event that
payment of the Redemption Price in respect of any Trust Securities called for
redemption is improperly withheld or refused and not paid either by the Issuer
Trust or by the Depositor pursuant to the Guarantee Agreement, Distributions on
such Trust Securities will continue to accumulate, as set forth in Section 4.1,
from the Redemption Date originally established by the Issuer Trust for such
Trust Securities to the date such Redemption Price is actually paid, in which
case the actual payment date will be the date fixed for redemption for purposes
of calculating the Redemption Price.
(e) Subject to Section 4.3(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated pro
rata to the Common Securities and the Preferred Securities based upon the
relative Liquidation Amounts of such classes. The particular Preferred
Securities to be redeemed shall be selected on a pro rata basis based upon their
respective Liquidation Amounts not more than 60 days prior to the Redemption
Date by the Property Trustee from the Outstanding Preferred Securities not
previously called for redemption, provided, however, that so long as the
Preferred Securities are in book-entry-only form, such selection shall be made
in accordance with the customary procedures for the Clearing Agency for the
Preferred Securities by such Clearing Agency. The Property Trustee shall
promptly notify the Securities Registrar in writing of the Preferred Securities
selected for redemption and, in the case of any Preferred Securities selected
for partial redemption, the Liquidation Amount thereof to be redeemed. For all
purposes of this Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Preferred Securities shall relate, in
the case of any Preferred Securities redeemed or to be redeemed only in part, to
the portion of the aggregate Liquidation Amount of Preferred Securities that has
been or is to be redeemed.
(f) Subject to the provisions of this Section 4.2 and applicable law,
the Depositor or its Affiliates may, at any time and from time to time, purchase
Outstanding Preferred Securities by tender, in the open market or by private
agreement.
SECTION IV.3. Subordination of Common Securities.
(a) Payment of Distributions (including any Additional Amounts) on, the
Redemption Price of, and the Liquidation Distribution in respect of the Trust
Securities, as applicable, shall be made, subject to Section 4.2(e), pro rata
among the Common Securities and the Preferred Securities based on the
Liquidation Amount of the Trust Securities; provided, however, that if on any
Distribution Date, Redemption Date or Liquidation Date any Event of Default
resulting from a Note Event of Default specified in Section 5.1(1) or 5.1(2) of
the Indenture shall have occurred
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and be continuing, no payment of any Distribution (including any Additional
Amounts) on, Redemption Price of, or Liquidation Distribution in respect of any
Common Security, and no other payment on account of the redemption, liquidation
or other acquisition of Common Securities, shall be made unless payment in full
in cash of all accumulated and unpaid Distributions (including any Additional
Amounts) on all Outstanding Preferred Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the Redemption
Price the full amount of such Redemption Price on all Outstanding Preferred
Securities then called for redemption, or in the case of payment of the
Liquidation Distribution the full amount of such Liquidation Distribution on all
Outstanding Preferred Securities, shall have been made or provided for, and all
funds immediately available to the Property Trustee shall first be applied to
the payment in full in cash of all Distributions (including any Additional
Amounts) on, or the Redemption Price of, the Preferred Securities then due and
payable.
(b) In the case of the occurrence of any Note Event of Default, the
Holders of the Common Securities shall have no right to act with respect to any
such Event of Default under this Trust Agreement until the effect of all such
Events of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated. Until all such Events of Default under this
Trust Agreement with respect to the Preferred Securities have 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 Holders of
the Common Securities, and only the Holders of all the Preferred Securities will
have the right to direct the Property Trustee to act on their behalf.
SECTION IV.4. Payment Procedures.
Payments of Distributions (including any Additional Amounts) or of the
Redemption Price, Liquidation Amount or any other amounts in respect of the
Preferred Securities shall be made by check mailed to the address of the Person
entitled thereto as such address shall appear on the Securities Register or, if
the Preferred Securities are held by a Clearing Agency, such Distributions shall
be made to the Clearing Agency in immediately available funds. Payments in
respect of the Common Securities shall be made in such manner as shall be
mutually agreed between the Property Trustee and the Holder of all the Common
Securities.
SECTION IV.5. Withholding Tax.
The Issuer Trust and the Administrative Trustees shall comply with all
withholding and backup withholding tax requirements under United States federal,
state and local law. The Issuer Trust shall request, and the Holders shall
provide to the Issuer Trust, such forms or certificates as are necessary to
establish an exemption from withholding and backup withholding tax with respect
to each Holder, and any representations and forms as shall reasonably be
requested by the Issuer Trust to assist it in determining the extent of, and in
fulfilling, its withholding and backup withholding tax obligations. The
Administrative Trustees shall file required forms with
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applicable jurisdictions and, unless an exemption from withholding and backup
withholding tax is properly established by a Holder, shall remit amounts
withheld with respect to the Holder to applicable jurisdictions. To the extent
that the Issuer 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 overwithholding, 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 Issuer Trust
may reduce subsequent Distributions by the amount of such required withholding.
SECTION IV.6. Tax Returns and Reports.
The Administrative Trustees shall prepare (or cause to be prepared), at
the Depositor's expense, and file all United States federal, state and local tax
and information returns and reports required to be filed by or in respect of the
Issuer Trust. In this regard, the Administrative Trustees shall (a) prepare and
file (or cause to be prepared and filed) all Internal Revenue Service forms and
returns required to be filed in respect of the Issuer Trust by January 31 in
each taxable year of the Issuer Trust, and (b) prepare and furnish (or cause to
be prepared and furnished) to each Holder all Internal Revenue Service forms and
returns required to be provided by the Issuer Trust. The Administrative Trustees
shall provide the Depositor and the Property Trustee with a copy of all such
returns and reports promptly after such filing or furnishing.
SECTION IV.7. Payment of Taxes, Duties, Etc. of the Issuer Trust.
Upon receipt under the Notes of Additional Sums and upon the written
direction of the Administrative Trustees, the Property Trustee shall promptly
pay, solely out of monies on deposit pursuant to this Trust Agreement, any
Additional Taxes imposed on the Issuer Trust by the United States or any other
taxing authority.
SECTION IV.8. Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Preferred Securities
shall be reduced by the amount of any corresponding payment such Holder (or any
Owner with respect thereto) has directly received pursuant to Section 5.8 of the
Indenture or Section 5.13 of this Trust Agreement.
SECTION IV.9. Liability of the Holder of Common Securities.
Any Holder of the Common Securities shall be liable for the debts and
obligations of the Issuer Trust in the manner and to the extent set forth with
respect to the Depositor and agrees that it shall be subject to all liabilities
to which the Depositor may be subject, and shall make all payments that the
Depositor is required to make, under the terms of the Expense Agreement.
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SECTION IV.10. Exchanges.
(a) If at any time the Depositor or any of its Affiliates (in either
case, a "Depositor Affiliated Owner/Holder") is the Owner or Holder of any
Preferred Securities, such Depositor Affiliated Owner/Holder shall have the
right to deliver to the Property Trustee all or such portion of its Preferred
Securities as it elects and receive, in exchange therefor, a Like Amount of
Notes. Such election (i) shall be exercisable effective on any Distribution Date
by such Depositor Affiliated Owner/Holder delivering to the Property Trustee a
written notice of such election specifying the Liquidation Amount of Preferred
Securities with respect to which such election is being made and the
Distribution Date on which such exchange shall occur, which Distribution Date
shall be not less than ten Business Days after the date of receipt by the
Property Trustee of such election notice and (ii) shall be conditioned upon such
Deposition Affiliate/Owner/ Holder having delivered or caused to be delivered to
the Property Trustee or its designee the Preferred Securities which are the
subject of such election by 10:00 A.M. New York time, on the Distribution Date
on which such exchange is to occur. After the exchange, such Preferred
Securities will be cancelled and will no longer be deemed to be Outstanding and
all rights of the Depositor or its Affiliate(s) with respect to such Preferred
Securities will cease.
(b) In the case of an exchange described in Section 4.10(a), the Issuer
Trust will, on the date of such exchange, exchange Notes having a principal
amount equal to a proportional amount of the aggregate Liquidation Amount of the
Outstanding Common Securities, based on the ratio of the aggregate Liquidation
Amount of the Preferred Securities exchanged pursuant to Section 4.9(a) divided
by the aggregate Liquidation Amount of the Preferred Securities Outstanding
immediately prior to such exchange, for such proportional amount of Common
Securities held by the Depositor (which contemporaneously shall be cancelled and
no longer be deemed to be Outstanding); provided, that the Depositor delivers or
causes to be delivered to the Property Trustee or its designee the required
amount of Common Securities to be exchanged by 10:00 A.M. New York time, on the
Distribution Date on which such exchange is to occur.
ARTICLE V.
SECURITIES CERTIFICATES
SECTION V.1. Initial Ownership.
Upon the formation of the Issuer Trust and the contribution by the
Depositor referred to in Section 2.3 and until the issuance of the Trust
Securities, and at any time during which no Trust Securities are Outstanding,
the Depositor shall be the sole beneficial owner of the Issuer Trust.
SECTION V.2. The Securities Certificates.
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(a) The Preferred Securities Certificates shall be issued in minimum
denominations of $25 Liquidation Amount and integral multiples of $25 in excess
thereof, and the Common Securities Certificates shall be issued in denominations
of $25 Liquidation Amount and integral multiples thereof. The Securities
Certificates shall be executed on behalf of the Issuer Trust by manual signature
of at least one Administrative Trustee. Securities Certificates bearing the
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Issuer Trust, shall be validly
issued and entitled to the benefits of this Trust Agreement, notwithstanding
that such individuals or any of them shall have ceased to be so authorized prior
to the delivery of such Securities Certificates or did not hold such offices at
the date of delivery of such Securities Certificates. A transferee of a Trust
Securities Certificate shall become a Holder, and shall be entitled to the
rights and subject to the obligations of a Holder hereunder, upon due
registration of such Trust Securities Certificate in such transferee's name
pursuant to Section 5.5.
(b) Upon their original issuance, Preferred Securities Certificates
shall be issued in the form of one or more Global Preferred Securities
registered in the name of DTC, as Clearing Agency, or its nominee and deposited
with DTC or a custodian for DTC for credit by DTC to the respective accounts of
the Owners thereof (or such other accounts as they may direct)[, provided,
however, that upon deposit all European Preferred Securities shall be credited
by DTC to or through accounts maintained at DTC by or on behalf of Euroclear or
Cedel].
(c) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION V.3. Execution and Delivery of Securities Certificates.
At the Time of Delivery, the Administrative Trustees shall cause
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Issuer Trust and delivered
to or upon the written order of the Depositor, executed by an authorized officer
thereof, without further corporate action by the Depositor, in authorized
denominations.
SECTION V.4. Book-Entry Preferred Securities.
(a) No Global Preferred Security may be exchanged in whole or in part
for Preferred Securities Certificates registered, and no transfer of a Global
Preferred Security in whole or in part may be registered, in the name of any
Person other than the Clearing Agency for such Global Preferred Security or a
nominee thereof unless (i) the Clearing Agency advises the Administrative
Trustees in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities with respect to the Global Preferred
Security, and the Administrative Trustees are unable to locate a qualified
successor within [90] of receipt of such
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notice, (ii) the Clearing Agency ceases to be a clearing agency registered under
the Exchange Act and the Administrative Trustees fail to appoint a qualified
successor within 90 days of such event, (iii) the Administrative Trustees at
their option advise the Property Trustee in writing that the Issuer Trust elects
to terminate the book-entry system through the Clearing Agency, or (iv) a Note
Event of Default has occurred and is continuing. Upon the occurrence of any
event specified in clause (i), (iii) or (iv) provided that in case of an event
referred to in clause (iv), the Property Trustee shall be deemed to have
knowledge thereof in accordance with the third paragraph of Section 8.2, above,
the Administrative Trustee shall notify the Clearing Agency and instruct the
Clearing Agency to notify all Owners of Book-Entry Preferred Securities, the
Delaware Trustee and the Property Trustee of the occurrence of such event and of
the availability of the Definitive Preferred Securities Certificates to Owners
of the Preferred Securities requesting the same.
(b) If any Global Preferred Security is to be exchanged for other
Preferred Securities Certificates or canceled in part, or if any other Preferred
Securities Certificate is to be exchanged in whole or in part for Book-Entry
Preferred Securities represented by a Global Preferred Security, then either (i)
such Global Preferred Security shall be so surrendered for exchange or
cancellation as provided in this Article V or (ii) the aggregate Liquidation
Amount represented by such Global Preferred Security shall be reduced, subject
to Section 5.2, or increased by an amount equal to the Liquidation Amount
represented by that portion of the Global Preferred Security to be so exchanged
or canceled, or equal to the Liquidation Amount represented by such other
Preferred Securities Certificates to be so exchanged for Book-Entry Preferred
Securities represented thereby, as the case may be, by means of an appropriate
adjustment made on the records of the Securities Registrar, whereupon the
Property Trustee, in accordance with the Applicable Procedures, shall instruct
the Clearing Agency or its authorized representative to make a corresponding
adjustment to its records. Upon surrender to the Administrative Trustees or the
Securities Registrar of the Global Preferred Security or Securities by the
Clearing Agency, accompanied by registration instructions, the Administrative
Trustees, or any one of them, shall execute the Definitive Preferred Securities
Certificates in accordance with the instructions of the Clearing Agency. None of
the Securities Registrar or the Issuer Trustees shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be fully
protected in relying on, such instructions. Upon the issuance of Definitive
Preferred Securities Certificates, the Issuer Trustees shall recognize the
Holders of the Definitive Preferred Securities Certificates as Holders. The
Definitive Preferred Securities Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by the execution thereof by the
Administrative Trustees or any one of them.
(c) Every Preferred Securities Certificate executed and delivered upon
registration or transfer of, or in exchange for or in lieu of, a Global
Preferred Security or any portion thereof, whether pursuant to this Article V or
Article IV or otherwise, shall be executed and delivered in the form of, and
shall be, a Global Preferred Security, unless such Preferred Securities
Certificate
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is registered in the name of a Person other than the Clearing Agency for such
Global Preferred Security or a nominee thereof.
(d) The Clearing Agency or its nominee, as registered owner of a Global
Preferred Security, shall be the Holder of such Global Preferred Security for
all purposes under this Agreement and the Global Preferred Security, and Owners
with respect to a Global Preferred Security shall hold such interests pursuant
to the Applicable Procedures. The Securities Registrar and the Issuer Trustees
shall be entitled to deal with the Clearing Agency for all purposes of this
Trust Agreement relating to the Global Preferred Securities (including the
payment of the Liquidation Amount of and Distributions on the Book-Entry
Preferred Securities represented thereby and the giving of instructions or
directions by Owners of Book-Entry Preferred Securities represented thereby and
the giving of notices) as the sole Holder of the Book-Entry Preferred Securities
represented thereby and shall have no obligations to the Owners thereof. None of
the Issuer Trustees nor the Securities Registrar shall have any liability in
respect of any transfers effected by the Clearing Agency.
The rights of the Owners of the Book-Entry Preferred Securities shall
be exercised only through the Clearing Agency and shall be limited to those
established by law, the Applicable Procedures and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants, provided,
however, solely for the purpose of determining whether the Holders of the
requisite amount of Preferred Securities have voted on any matter provided for
in this Trust Agreement, so long as Preferred Security Certificates in
certificated form have not been issued pursuant to Section 5.4(b), the Issuer
Trustees may conclusively rely on, and shall be fully protected in relying on,
any written instrument (including a proxy) delivered to the Property Trustee by
the Clearing Agency setting forth the Owners' votes or assigning the right to
vote on any matter to any other Persons either in whole or in part. Pursuant to
the Certificate Depository Agreement, unless and until Preferred Securities
Certificates in certificated form are issued pursuant to Section 5.4(b), the
initial Clearing Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit payments on the Preferred Securities to
such Clearing Agency Participants, and none of the Depositor or the Issuer
Trustees shall have any responsibility or obligation with respect thereto.
SECTION 5.5. Registration of Transfer and Exchange of Preferred
Securities Certificates.
(a) The Property Trustee shall keep or cause to be kept, at its
Corporate Trust Office, a register or registers (the "Securities Register") in
which the registrar and transfer agent with respect to the Trust Securities (the
"Securities Registrar"), subject to such reasonable regulations as it may
prescribe, shall provide for the registration of Preferred Securities
Certificates and Common Securities Certificates (subject to Section 5.11 in the
case of the Common Securities Certificates) and registration of transfers and
exchanges of Preferred Securities Certificates as
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herein provided. The Person acting as the Property Trustee shall at all times
also be the Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.9, the
Administrative Trustees or any one of them shall execute and deliver to the
Property Trustee, and the Property Trustee shall deliver, in the name of the
designated transferee or transferees, one or more new Preferred Securities
Certificates in authorized denominations of a like aggregate Liquidation Amount
as may be required by this Trust Agreement dated the date of execution by such
Administrative Trustee or Trustees. At the option of a Holder, Preferred
Securities Certificates may be exchanged for other Preferred Securities
Certificates in authorized denominations and of a like aggregate Liquidation
Amount upon surrender of the Preferred Securities Certificate to be exchanged at
the office or agency maintained pursuant to Section 5.9.
The Securities Registrar shall not be required, (i) to issue, register
the transfer of or exchange any Preferred Security during a period beginning at
the opening of business 15 days before the day of selection for redemption of
such Preferred Securities pursuant to Article IV and ending at the close of
business on the day of mailing of the notice of redemption, or (ii) to register
the transfer of or exchange any Preferred Security so selected for redemption in
whole or in part, except, in the case of any such Preferred Security to be
redeemed in part, any portion thereof not to be redeemed.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Securities
Registrar duly executed by the Holder or such Holder's attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange or for payment shall be canceled and subsequently
disposed of by the Property Trustee in accordance with such Person's customary
practice.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Issuer Trust may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Preferred Securities
Certificates.
(b) Notwithstanding any other provision of this Trust Agreement,
transfers and exchanges of Preferred Securities Certificates and beneficial
interests in a Global Preferred Security of the kinds specified in this Section
5.5(b) shall be made only in accordance with this Section 5.5(b).
(i) Non-Global Preferred Security to Global Preferred
Security. If the Holder of a Preferred Securities Certificate (other
than a Global Preferred Security) wishes at any time to transfer all or
any portion of such Preferred Securities Certificate to a Person who
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wishes to take delivery thereof in the form of a beneficial interest in
a Global Preferred Security, such transfer may be effected only in
accordance with the provisions of this clause (b)(i) and subject to the
Applicable Procedures. Upon receipt by the Securities Registrar of (A)
such Preferred Securities Certificate as provided in Section 5.5(a) and
instructions satisfactory to the Securities Registrar directing that a
beneficial interest in the Global Preferred Security of a specified
number of Preferred Securities not greater than the number of Preferred
Securities represented by such Preferred Securities Certificate be
credited to a specified Clearing Agency Participant's account, then the
Securities Registrar shall cancel such Preferred Securities Certificate
(and issue a new Preferred Securities Certificate in respect of any
untransferred portion thereof) as provided in Section 5.5(a) and
increase the aggregate Liquidation Amount of the Global Preferred
Security by the Liquidation Amount represented by such Preferred
Securities so transferred as provided in Section 5.4(c).
(ii) Non-Global Preferred Security to Non-Global Preferred
Security. A Preferred Securities Certificate that is not a Global
Preferred Security may be transferred, in whole or in part, to a Person
who takes delivery in the form of another Preferred Securities
Certificate that is not a Global Preferred Security as provided in
Section 5.5(a).
(iii) Exchanges between Global Preferred Security and
Non-Global Preferred Security. A beneficial interest in a Global
Preferred Security may be exchanged for a Preferred Securities
Certificate that is not a Global Preferred Security as provided in
Section 5.4.
SECTION V.6. Mutilated, Destroyed, Lost or Stolen Securities
Certificates.
If (a) any mutilated Securities Certificate shall be surrendered to the
Securities Registrar, or if the Securities Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any Securities
Certificate, and (b) there shall be delivered to the Securities Registrar and
the Administrative Trustees such security or indemnity as may be required by
them to save each of them harmless, then in the absence of notice that such
Securities Certificate shall have been acquired by a bona fide purchaser, the
Administrative Trustees, or any one of them, on behalf of the Issuer Trust shall
execute and make available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Securities Certificate, a new Securities
Certificate of like class, tenor and denomination. In connection with the
issuance of any new Securities Certificate under this Section 5.6, the
Administrative Trustees or the Securities Registrar may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Securities Certificate issued pursuant to
this Section 5.6 shall constitute conclusive evidence of an undivided beneficial
interest in the assets of the Issuer Trust corresponding to that evidenced by
the lost, stolen or destroyed Securities Certificate, as if originally issued,
whether or not the lost, stolen or destroyed Securities Certificate shall be
found at any time.
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If any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, the Corporation in its discretion may,
instead of issuing a new Security, pay such Security.
The provisions of this Section 5.6 are exclusive and shall preclude (
to the extent lawful) all other rights and remedies with respect to the
replacement of mutilated, destroyed, lost or stolen Securities Certificates.
SECTION V.7. Persons Deemed Holders.
The Issuer Trustees and the Securities Registrar shall each treat the
Person in whose name any Securities Certificate shall be registered in the
Securities Register as the owner of such Securities Certificate for the purpose
of receiving Distributions and for all other purposes whatsoever, and none of
the Issuer Trustees and the Securities Registrar shall be bound by any notice to
the contrary.
SECTION V.8. Access to List of Holders' Names and Addresses.
Each Holder and each Owner shall be deemed to have agreed not to hold
the Depositor, the Property Trustee, the Delaware Trustee or the Administrative
Trustees accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
SECTION V.9. Maintenance of Office or Agency.
The Property Trustee shall designate, with the consent of the
Administrative Trustees, which consent shall not be unreasonably withheld, an
office or offices or agency or agencies where Preferred Securities Certificates
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Issuer Trustees in respect of the Trust Securities
Certificates may be served. The Property Trustee initially designates the
Corporate Trust Office, Attention: Capital Markets Fiduciary Services, as its
office and agency for such purposes. The Property Trustee shall give prompt
written notice to the Depositor, the Administrative Trustees and to the Holders
of any change in the location of the Securities Register or any such office or
agency.
SECTION V.10. Appointment of Paying Agents.
The Paying Agent or Paying Agents shall make Distributions to Holders
from the Payment Account and shall report the amounts of such Distributions to
the Property Trustee and the Administrative Trustees. Any Paying Agent shall
have the revocable power to withdraw funds from the Payment Account solely for
the purpose of making the Distributions referred to
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above. The Administrative Trustees may revoke such power and remove the Paying
Agent in their sole discretion. The Paying Agent shall initially be the Property
Trustee. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees and the
Property Trustee. If the Property Trustee shall no longer be the Paying Agent or
a successor Paying Agent shall resign or its authority to act be revoked, the
Administrative Trustees shall appoint a successor (which shall be a bank or
trust company) to act as Paying Agent. Such successor Paying Agent or any
additional Paying Agent appointed by the Administrative Trustees shall execute
and deliver to the Issuer Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Issuer Trustees that as
Paying Agent, such successor Paying Agent or additional Paying Agent will hold
all sums, if any, held by it for payment to the Holders in trust for the benefit
of the Holders entitled thereto until such sums shall be paid to such Holders.
The Paying Agent shall return all unclaimed funds to the Property Trustee and
upon removal of a Paying Agent such Paying Agent shall also return all funds in
its possession to the Property Trustee. The provisions of Sections 8.1, 8.3 and
8.6 herein shall apply to the Bank also in its role as Paying Agent, for so long
as the Bank shall act as Paying Agent and, to the extent applicable, to any
other Paying Agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
SECTION V.11. Ownership of Common Securities by Depositor.
At the Time of Delivery, the Depositor shall acquire, and thereafter
shall retain, beneficial and record ownership of the Common Securities. Neither
the Depositor nor any successor Holder of the Common Securities may transfer
less than all the Common Securities, and the Depositor or any such successor
Holder may transfer the Common Securities only (i) in connection with a
consolidation or merger of the Depositor into another corporation, or any
conveyance, transfer or lease by the Depositor of its properties and assets
substantially as an entirety to any Person, pursuant to Section 8.1 of the
Indenture, or (ii) to the Depositor or an Affiliate of the Depositor in
compliance with applicable law (including the Securities Act, and applicable
state securities and blue sky laws), and in either case only upon an effective
assignment and delegation by the Holder of all the Common Securities to its
transferee of all of its rights and obligations under the Expense Agreement. To
the fullest extent permitted by law, any attempted transfer of the Common
Securities other than as set forth in the immediately preceding sentence shall
be void. The Administrative Trustees shall cause each Common Securities
Certificate issued to the Depositor to contain a legend stating substantially
"THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF
THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST
AGREEMENT AND ONLY IN CONNECTION WITH A SIMULTANEOUS DELEGATION AND ASSIGNMENT
OF THE EXPENSE AGREEMENT REFERRED TO THEREIN."
SECTION V.12. Notices to Clearing Agency.
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To the extent that a notice or other communication to the Holders is
required under this Trust Agreement, for so long as Preferred Securities are
represented by a Global Preferred Security, the Issuer Trustees shall give all
such notices and communications specified herein to be given to the Clearing
Agency, and shall have no obligations to the Owners.
SECTION V.13. Rights of Holders; Waivers of Past Defaults.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Holders shall not have any right or title therein other than the undivided
beneficial interest in the assets of the Issuer Trust conferred by their Trust
Securities and they shall have no right to call for any partition or division of
property, profits or rights of the Issuer Trust except as described below. The
Trust Securities shall be personal property giving only the rights specifically
set forth therein and in this Trust Agreement. The Trust Securities shall have
no preemptive or similar rights and when issued and delivered to Holders against
payment of the purchase price therefor will be fully paid and nonassessable by
the Issuer Trust. The Holders of the Trust 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.
(b) For so long as any Preferred Securities remain Outstanding, if,
upon a Note Event of Default, the Note Trustee fails or the holders of not less
than 33% in principal amount of the outstanding Notes fail to declare the
principal of all of the Notes to be immediately due and payable, the Holders of
at least 33% in Liquidation Amount of the Preferred Securities then Outstanding
shall have the right to make such declaration by a notice in writing to the
Property Trustee, the Depositor and the Note Trustee.
At any time after a declaration of acceleration with respect to the
Notes has been made and before a judgment or decree for payment of the money due
has been obtained by the Note Trustee as provided in the Indenture, the Holders
of at least a Majority in Liquidation Amount of the Preferred Securities, by
written notice to the Property Trustee, the Depositor and the Note Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Depositor has paid or deposited with the Note
Trustee a sum sufficient to pay
(A) all overdue installments of interest on all of
the Notes,
(B) any accrued Additional Interest on all of the
Notes,
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(C) the principal of (and premium, if any, on) any
Notes that have become due otherwise than by such declaration
of acceleration and interest and Additional Interest thereon
at the rate borne by the Notes, and
(D) all sums paid or advanced by the Note Trustee
under the Indenture and the reasonable compensation, expenses,
disbursements and advances of the Note Trustee and the
Property Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Notes,
other than the non-payment of the principal of the Notes that has
become due solely by such acceleration, have been cured or waived as
provided in Section 5.13 of the Indenture.
The Holders of at least a Majority in Liquidation Amount of the
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default or Event of Default under the Indenture,
except a default or Event of Default in the payment of principal or interest
(unless such default or Event of Default has been cured and a sum sufficient to
pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Note Trustee) or a default or Event of
Default in respect of a covenant or provision that under the Indenture cannot be
modified or amended without the consent of the holder of each outstanding Note.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such
an acceleration, or rescission and annulment thereof, by Holders of any part of
the Preferred Securities a record date shall be established for determining
Holders of Outstanding Preferred Securities entitled to join in such notice,
which record date shall be at the close of business on the day the Property
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, however, that, unless such declaration of acceleration, or rescission
and annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day that is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice that has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 5.13(b).
(c) For so long as any Preferred Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Note Event of Default specified in Section 5.1(1) or
5.1(2) of the Indenture, any Holder of Preferred
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Securities shall have the right to institute a proceeding directly against the
Depositor, pursuant to Section 5.8 of the Indenture, for enforcement of payment
to such Holder of any amounts payable in respect of Notes having an aggregate
principal amount equal to the aggregate Liquidation Amount of the Preferred
Securities of such Holder (a "Direct Action"). Except as set forth in Section
5.13(b) and this Section 5.13(c), the Holders of Preferred Securities shall have
no right to exercise directly any right or remedy available to the holders of,
or in respect of, the Notes.
(d) Except as otherwise provided in paragraphs (a), (b) and (c) of this
Section 5.13, the Holders of at least a Majority in Liquidation Amount of the
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default or Event of Default and its consequences.
Upon such waiver, any such default or Event of Default shall cease to exist, and
any default or Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Trust Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
(e) The Holders of a Majority in Liquidation Amount of the Preferred
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee in
respect of this Trust Agreement or the Notes or exercising any trust or power
conferred upon the Property Trustee under this Trust Agreement; provided,
however, that, subject to Section 8.1, the Property Trustee shall have the right
to decline to follow any such direction if the Property Trustee being advised by
counsel determines that the action so directed may not lawfully be taken, or if
the Property Trustee in good faith shall, by an officer or officers of the
Property Trustee, determine that the proceedings so directed would be illegal or
involve it in personal liability or be unduly prejudicial to the rights of
Holders not party to such direction, and provided further that nothing in this
Trust Agreement shall impair the right of the Property Trustee to take any
action deemed proper by the Property Trustee and which is not inconsistent with
such direction.
ARTICLE VI.
ACTS OF HOLDERS; MEETINGS; VOTING
SECTION VI.1. Limitations on Voting Rights.
(a) Except as expressly provided in this Trust Agreement and in the
Indenture and as otherwise required by law, no Holder of Preferred Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Issuer Trust or the obligations
of the parties hereto, nor shall anything herein set forth, or contained in the
terms of the Securities Certificates, be construed so as to constitute the
Holders from time to time as partners or members of an association.
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(b) So long as any Notes are held by the Property Trustee on behalf of
the Issuer Trust, the Property Trustee shall not (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Note Trustee,
or exercise any trust or power conferred on the Property Trustee with respect to
the Notes, (ii) waive any past default that may be waived under Section 5.13 of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Notes shall be due and payable, or (iv) consent to any
amendment, modification or termination of the Indenture or the Notes, where such
consent shall be required, without, in each case, obtaining the prior approval
of the Holders of at least a Majority in Liquidation Amount of the Preferred
Securities, provided, however, that where a consent under the Indenture would
require the consent of each Holder of Notes affected thereby, no such consent
shall be given by the Property Trustee without the prior written consent of each
Holder of Preferred Securities. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Preferred
Securities, except by a subsequent vote of the Holders of the Preferred
Securities. Subject to Section 8.2, the Property Trustee shall notify all
Holders of the Preferred Securities of any notice of default received with
respect to the Notes. In addition to obtaining the foregoing approvals of the
Holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Property Trustee shall, at the expense of the Depositor, obtain an
Opinion of Counsel experienced in such matters to the effect that such action
shall not cause the Issuer Trust to be taxable as a corporation or classified as
other than a grantor trust for United States federal income tax purposes.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Issuer Trustees otherwise propose to effect, (i) any action that would
adversely affect in any material respect the powers, preferences or special
rights of the Preferred Securities, whether by way of amendment to the Trust
Agreement or otherwise, or (ii) the dissolution, winding-up or termination of
the Issuer Trust, other than pursuant to the terms of this Trust Agreement, then
the Holders of Outstanding Preferred Securities as a class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
Liquidation Amount of the Preferred Securities. Notwithstanding any other
provision of this Trust Agreement, no amendment to this Trust Agreement may be
made if, as a result of such amendment, it would cause the Issuer Trust to be
taxable as a corporation or classified as other than a grantor trust for United
States federal income tax purposes.
SECTION VI.2. Notice of Meetings.
Notice of all meetings of the Holders of the Preferred Securities,
stating the time, place and purpose of the meeting, shall be given by the
Property Trustee pursuant to Section 10.9 to each Holder of Preferred
Securities, at such Holder's registered address, at least 15 days and not more
than 90 days before the meeting. At any such meeting, any business properly
before the meeting may be so considered whether or not stated in the notice of
the meeting. Any adjourned meeting may be held as adjourned without further
notice.
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SECTION VI.3. Meetings of Holders of the Preferred Securities.
No annual meeting of Holders is required to be held. The Property
Trustee, however, shall call a meeting of the Holders of the Preferred
Securities to vote on any matter upon the written request of the Holders of at
least 33% in aggregate Liquidation Amount of the Outstanding Preferred
Securities and the Administrative Trustees or the Property Trustee may, at any
time in their discretion, call a meeting of the Holders of the Preferred
Securities to vote on any matters as to which such Holders are entitled to vote.
The Holders of at least a Majority in Liquidation Amount of the
Preferred Securities, present in person or by proxy, shall constitute a quorum
at any meeting of the Holders of the Preferred Securities.
If a quorum is present at a meeting, an affirmative vote by the Holders
present, in person or by proxy, holding Preferred Securities representing at
least a Majority of the aggregate Liquidation Amount of the Preferred Securities
held by the Holders present, either in person or by proxy, at such meeting shall
constitute the action of the Holders of the Preferred Securities, unless this
Trust Agreement requires a lesser or greater number of affirmative votes.
SECTION VI.4. Voting Rights.
Holders shall be entitled to one vote for each $25 of Liquidation
Amount represented by their Outstanding Trust Securities in respect of any
matter as to which such Holders are entitled to vote.
SECTION VI.5. Proxies, Etc.
At any meeting of Holders, any Holder entitled to vote thereat may vote
by proxy, provided that no proxy shall be voted at any meeting unless it shall
have been placed on file with the Administrative Trustees, or with such other
officer or agent of the Issuer Trust as the Administrative Trustees may direct,
for verification prior to the time at which such vote shall be taken. Pursuant
to a resolution of the Property Trustee, proxies may be solicited in the name of
the Property Trustee or one or more officers of the Property Trustee. Only
Holders of record shall be entitled to vote. When Trust Securities are held
jointly by several persons, any one of them may vote at any meeting in person or
by proxy in respect of such Trust Securities, but if more than one of them shall
be present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Holder shall be deemed valid unless challenged at or prior
to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.
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SECTION VI.6. Holder Action by Written Consent.
Any action that may be taken by Holders at a meeting may be taken
without a meeting and without prior notice if Holders holding at least a
Majority in Liquidation Amount of all Preferred Securities entitled to vote in
respect of such action (or such lesser or greater proportion thereof as shall be
required by any other provision of this Trust Agreement) shall consent to the
action in writing. Any action that may be taken by the Holders of all the Common
Securities may be taken if such Holders shall consent to the action in writing.
SECTION VI.7. Record Date for Voting and Other Purposes.
Except as provided in Section 5.13(b) for the purposes of determining
the Holders who are entitled to notice of and to vote at any meeting or to act
by written consent, or to participate in any distribution on the Trust
Securities in respect of which a record date is not otherwise provided for in
this Trust Agreement, or for the purpose of any other action, the Administrative
Trustees may from time to time fix a date, not more than 90 days prior to the
date of any meeting of Holders or the payment of a distribution or other action,
as the case may be, as a record date for the determination of the identity of
the Holders of record for such purposes.
SECTION VI.8. Acts of Holders.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given, made
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 writing; and, except as otherwise expressly provided herein,
such action shall become effective when such instrument or instruments are
delivered to an Administrative Trustee. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Trust Agreement and (subject to Section
8.1) conclusive in favor of the Issuer Trustees, if made in the manner provided
in this Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than such signer's individual capacity, such
certificate or affidavit shall also constitute sufficient proof of such signer's
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person
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executing the same, may also be proved in any other manner that any Issuer
Trustee or Administrative Trustee receiving the same deems sufficient.
The ownership of Trust Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Trust Security shall bind every future Holder
of the same Trust Security and the Holder of every Trust 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 Issuer
Trustees, the Administrative Trustees or the Issuer Trust in reliance thereon,
whether or not notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Trust Security may do so with
regard to all or any part of the Liquidation Amount of such Trust Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise among the Holders or the Issuer Trustees
with respect to the authenticity, validity or binding nature of any request,
demand, authorization, direction, consent, waiver or other Act of such Holder or
Issuer Trustee under this Article VI, then the determination of such matter by
the Property Trustee shall be conclusive with respect to such matter.
SECTION VI.9. Inspection of Records.
Upon reasonable written notice to the Administrative Trustees and the
Property Trustee, the records of the Issuer Trust shall be open to inspection by
any Holder during normal business hours for any purpose reasonably related to
such Holder's interest as a Holder.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
SECTION VII.1. Representations and Warranties of the Property
Trustee and the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on behalf
of and as to itself, hereby represents and warrants for the benefit of the
Depositor and the Holders that:
(a) the Property Trustee is a New York banking corporation,
duly organized, validly existing and in good standing under the laws of
the State of New York;
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(b) the Property Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations under
this Trust Agreement and has taken all necessary action to authorize
the execution, delivery and performance by it of this Trust Agreement;
(c) the Delaware Trustee is a Delaware banking corporation;
(d) the Delaware Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations under
this Trust Agreement and has taken all necessary action to authorize
the execution, delivery and performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed
and delivered by the Property Trustee and the Delaware Trustee and
constitutes the valid and legally binding agreement of each of the
Property Trustee and the Delaware Trustee enforceable against each of
them in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles;
(f) the execution, delivery and performance of this Trust
Agreement has been duly authorized by all necessary corporate or other
action on the part of the Property Trustee and the Delaware Trustee and
does not require any approval of stockholders of the Property Trustee
and the Delaware Trustee and such execution, delivery and performance
will not (i) violate the Charter or By-laws of the Property Trustee or
the Delaware Trustee, violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the
creation or imposition of, any Lien on any properties included in the
Trust Property pursuant to the provisions of, any indenture, mortgage,
credit agreement, license or other agreement or instrument to which the
Property Trustee or the Delaware Trustee is a party or by which it is
bound, or (ii) violate any applicable law, governmental rule or
regulation of the United States or the State of Delaware, as the case
may be, governing the banking, trust or general powers of the Property
Trustee or the Delaware Trustee (as appropriate in context) or any
order, judgment or decree applicable to the Property Trustee or the
Delaware Trustee;
(g) neither the authorization, execution or delivery by the
Property Trustee or the Delaware Trustee of this Trust Agreement nor
the consummation of any of the transactions by the Property Trustee or
the Delaware Trustee (as appropriate in context) contemplated herein
requires the consent or approval of, the giving of notice to, the
registration with or the taking of any other action with respect to any
governmental authority or agency under any existing law of the United
States or the State of Delaware
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governing the banking, trust or general powers of the Property Trustee
or the Delaware Trustee, as the case may be; and
(h) there are no proceedings pending or, to the best of each
of the Property Trustee's and the Delaware Trustee's knowledge,
threatened against or affecting the Property Trustee or the Delaware
Trustee in any court or before any governmental authority, agency or
arbitration board or tribunal that, individually or in the aggregate,
would materially and adversely affect the Issuer Trust or would
question the right, power and authority of the Property Trustee or the
Delaware Trustee, as the case may be, to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
SECTION VII.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Holders that:
(a) the Securities Certificates issued at the Time of Delivery
on behalf of the Issuer Trust have been duly authorized and will have
been duly and validly executed, issued and delivered by the applicable
Issuer Trustees pursuant to the terms and provisions of, and in
accordance with the requirements of, this Trust Agreement and the
Holders will be, as of each such date, entitled to the benefits of this
Trust Agreement; and
(b) there are no taxes, fees or other governmental charges
payable by the Issuer Trust (or the Issuer Trustees on behalf of the
Issuer Trust) under the laws of the State of Delaware or any political
subdivision thereof in connection with the execution, delivery and
performance by the Property Trustee or the Delaware Trustee of this
Trust Agreement.
ARTICLE VIII.
THE ISSUER TRUSTEES
SECTION VIII.1. Certain Duties and Responsibilities.
(a) The rights, immunities, duties and responsibilities of the Issuer
Trustees shall be as provided by this Trust Agreement and, in the case of the
Property Trustee, by the Trust Indenture Act. Notwithstanding the foregoing, no
provision of this Trust Agreement shall require any of the Issuer Trustees 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 or
their rights or powers, if it or they 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 Trust Agreement relating to the
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conduct or affecting the liability of or affording protection to the Issuer
Trustees shall be subject to the provisions of this Section 8.1. Nothing in this
Trust Agreement shall be construed to release an Administrative Trustee from
liability for his or her own negligent action, his or her own negligent failure
to act, or his or her own wilful misconduct. To the extent that, at law or in
equity, an Issuer Trustee has duties and liabilities relating to the Issuer
Trust or to the Holders, such Issuer Trustee shall not be liable to the Issuer
Trust or to any Holder for such Issuer Trustee's good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust Agreement, to
the extent that they restrict the duties and liabilities of the Issuer Trustees
otherwise existing at law or in equity, are agreed by the Depositor and the
Holders to replace such other duties and liabilities of the Issuer Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each Holder,
by its acceptance of a Trust Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Issuer Trustees are not
personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.1(b) does not limit the liability of the Issuer Trustees expressly set
forth elsewhere in this Trust Agreement or, in the case of the Property Trustee,
in the Trust Indenture Act.
(c) If an Event of Default has occurred and is continuing, the Property
Trustee shall be entitled to enforce this Trust Agreement for the benefit of the
Holders.
(d) The Property Trustee, before the occurrence of any Event of Default
and after the curing or waiver of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Trust Agreement (including pursuant to Section 10.10), and no implied
covenants shall be read into this Trust Agreement against the Property Trustee.
If an Event of Default has occurred (that has not been cured or waived pursuant
to Section 5.13), the Property Trustee shall exercise such of the rights and
powers vested in it by this Trust Agreement and use the same degree of care and
skill in its exercise thereof as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(e) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own wilful misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the cure or waiver of all such Events of Default that may have
occurred:
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(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Trust Agreement (including pursuant to Section 10.10),
and the Property Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Trust Agreement (including pursuant to
Section 10.10); 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 Trust Agreement; but in the case of any
such certificates or opinions that by any provision hereof or
of the Trust Indenture Act are specifically required to be
furnished to the 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 Trust Agreement.
(ii) the Property Trustee shall not be liable for any error
of judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of at least 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 Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Trust Agreement;
(iv) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Notes and the
Payment 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 Trust Agreement and the
Trust Indenture Act;
(v) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
with the Depositor; and money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Payment Account maintained by the Property Trustee pursuant to Section
3.1 and except to the extent otherwise required by law;
(vi) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties
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under this Trust Agreement, nor shall the Property Trustee be liable
for the default or misconduct of any other Issuer Trustee or the
Depositor; and
(vii) No provision of this Trust Agreement 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 the Property Trustee
shall have reasonable grounds for believing that the repayment of such
funds or liability is not reasonably assured to it under the terms of
this Trust Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
(f) The Administrative Trustees shall not be responsible for monitoring
the compliance by the other Issuer Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall one Administrative
Trustee be liable for the default or misconduct of any other Administrative
Trustee, the Issuer Trustees or the Depositor.
SECTION VIII.2. Certain Notices.
Within 90 days after the occurrence of any Event of Default actually
known to the Property Trustee, the Property Trustee shall transmit, in the
manner and to the extent provided in Section 10.9, notice of such Event of
Default to the Holders, the Administrative Trustees and the Depositor, unless
such Event of Default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of (or premium,
of any) or interest (including any Additional Interest) on any Trust Security,
the Trustee shall be fully 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 Holders of
Securities of such series. For the purpose of this Section, the term "default"
means any event that is, or after notice or lapse of time or both would become,
an Event of Default with respect to Securities of such series.
Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the Notes
pursuant to the Indenture, the Administrative Trustees shall transmit, in the
manner and to the extent provided in Section 10.9, notice of such exercise to
the Holders and the Administrative Trustees, unless such exercise shall have
been revoked.
The Property Trustee shall not be deemed to have knowledge of any Event
of Default unless the Property Trustee shall have received written notice
thereof from the Depositor, any Administrative Trustee, any Holder or an officer
of the Property Trustee charged with the administration of this Trust Agreement
shall have obtained actual knowledge of such Event of Default.
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SECTION VIII.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution,
Opinion of Counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, 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;
(b) if (i) in performing its duties under this Trust Agreement
the Property Trustee is required to decide between alternative courses
of action, (ii) in construing any of the provisions of this Trust
Agreement the Property Trustee finds the same ambiguous or inconsistent
with any other provisions contained herein, or (iii) the Property
Trustee is unsure of the application of any provision of this Trust
Agreement, then, except as to any matter as to which the Holders of the
Preferred Securities are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting the Depositor's written instruction as to the course of
action to be taken and the Property Trustee shall take such action, or
refrain from taking such action, as the Property Trustee shall be
instructed in writing to take, or to refrain from taking, by the
Depositor; provided, however, that if the Property Trustee does not
receive such instructions of the Depositor within ten Business Days
after it has delivered such notice, or such resonably shorter period of
time set forth in such notice (which to the extent may, but shall be
under no duty to, take such action, or refrain from taking such action,
as the Property Trustee shall deem advisable and in the best interests
of the Holders, in which event the Property Trustee shall have no
liability except for its own bad faith, negligence or wilful
misconduct;
(c) any direction or act of the Depositor contemplated by this
Trust Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise expressly provided herein;
(d) any direction or act of an Administrative Trustee
contemplated by this Trust Agreement shall be sufficiently evidenced by
a certificate executed by such Administrative Trustee and setting forth
such direction or act;
(e) 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 re-recording, re-filing or re-registration
thereof;
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(f) the Property Trustee may consult with counsel (which
counsel may be counsel to the Property Trustee, the Depositor or any of
its Affiliates, and may include any of its employees) and the advice of
such 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 and in accordance with such advice;
the Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from
any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust
Agreement at the request or direction of any of the Holders pursuant to
this Trust Agreement, unless such Holders shall have offered to the
Property Trustee reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in compliance
with such request or direction; provided, however, that, nothing
contained in this Section 8.3(g) 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 Trust Agreement;
(h) 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,
consent, order, approval, bond, debenture, note or other evidence of
indebtedness or other paper or document, unless requested in writing to
do so by one or more Holders, but the Property Trustee may make such
further inquiry or investigation into such facts or matters as it may
see fit;
(i) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents, attorneys, custodians or nominees, provided,
however, that the Property Trustee shall be responsible for its own
negligence or misconduct with respect to selection of any agent,
attorney, custodian or nominee appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement 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 Trust Securities as would
be entitled to direct the Property Trustee under the terms of the Trust
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
acting in accordance with such instructions;
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(k) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Trust Agreement;
(l) without prejudice to any other rights available to the
Property Trustee under applicable law, when the Property Trustee incurs
expenses or renders services in connection with a Bankruptcy Event,
such expenses (including legal fees and expenses of its counsel) and
the compensation for such services are intended to constitute expenses
of administration under any bankruptcy law or law relating to creditors
rights generally; and
(m) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence be herein
specifically prescribed) may, in the absence or bad faith on its part,
request and rely on an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Depositor.
No provision of this Trust Agreement shall be deemed to impose any duty
or obligation on any Issuer 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 such Person 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 any Issuer Trustee shall be construed to be a duty.
SECTION VIII.4. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities Certificates shall
be taken as the statements of the Issuer Trust and the Depositor, and the Issuer
Trustees do not assume any responsibility for their correctness. The Issuer
Trustees make no representations at to the title to, or value or condition of,
the property of the Issuer Trust or any part thereof, nor as to the validity or
sufficiency of this Trust Agreement, the Notes or the Trust Securities. The
Issuer Trustees shall not be accountable for the use or application by the
Depositor of the proceeds of the Notes.
SECTION VIII.5. May Hold Securities.
Any Issuer Trustee or any other agent of any Issuer Trustee or the
Issuer Trust, in its individual or any other capacity, may become the owner or
pledgee of Trust Securities and, subject to Sections 8.8 and 8.13, and except as
provided in the definition of the term "Outstanding" in Article I, may otherwise
deal with the Issuer Trust with the same rights it would have if it were not an
Issuer Trustee or such other agent.
SECTION VIII.6. Compensation; Indemnity; Fees.
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The Depositor agrees:
(a) to pay to the Issuer Trustees from time to time such
reasonable compensation for all services rendered by them hereunder as
may be agreed by the Depositor and the Issuer Trustees 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);
(b) except as otherwise expressly provided herein, to
reimburse the Issuer Trustees upon request for all reasonable expenses,
disbursements and advances incurred or made by the Issuer Trustees in
accordance with any provision of this Trust Agreement (including the
reasonable compensation and the expenses and disbursements of their
agents and counsel), except any such expense, disbursement or advance
as may be attributable to their negligence, bad faith or wilful
misconduct; and
(c) to the fullest extent permitted by applicable law, to
indemnify and hold harmless (i) each Issuer Trustee, (ii) any Affiliate
of any Issuer Trustee, (iii) any officer, director, shareholder,
employee, representative or agent of any Issuer Trustee, and (iv) any
employee or agent of the Issuer Trust (referred to herein as an
"Indemnified Person") from and against any loss, damage, liability, tax
(other than income, franchise or other taxes imposed on amounts paid
pursuant to (a) or (b) hereof), penalty, expense or claim of any kind
or nature whatsoever incurred without negligence, willful misconduct or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trust hereunder, including
the reasonable costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement and the removal or resignation of any Issuer Trustee.
No Issuer Trustee or Paying Agent may claim any Lien on any Trust
Property as a result of any amount due pursuant to this Section 8.6.
In the event that the Property Trustee is also acting as
Paying Agent or Securities Registrar hereunder, the rights and protections
afforded to the Property Trustee pursuant to this Article VIII shall also be
afforded to such Paying Agent or Securities Registrar.
SECTION VIII.7. Corporate Property Trustee Required; Eligibility of
Issuer Trustees.
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(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
a national or state chartered bank and eligible pursuant to the Trust Indenture
Act to act as such, and that has at the time of such appointment a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
8.7 and to the extent permitted by the Trust Indenture Act, the combined capital
and surplus of such Person 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 Property Trustee with respect to the Trust Securities shall cease
to be eligible in accordance with the provisions of this Section 8.7, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article. At the time of appointment, the Property Trustee must have
securities rated in one of the three highest rating categories by a nationally
recognized statistical rating organization.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative 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 persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware, or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law and that shall
act through one or more persons authorized to bind such entity.
SECTION VIII.8. Conflicting Interests.
(a) If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property 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 Trust
Agreement.
(b) The Guarantee Agreement and the Indenture shall be deemed to be
specifically described in this Trust Agreement for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION VIII.9. Co-Trustees and Separate Trustee.
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
Property may at the time be located, the Depositor and the Administrative
Trustees; except in such instances as set forth in the second following
sentence, by agreed action of the majority of such Trustees shall have
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power to appoint, and upon the written request of the Administrative Trustees,
the Depositor shall for such purpose join with the Administrative Trustees in
the execution, delivery, and performance of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by the Property
Trustee either to act as co-trustee, jointly with the Property Trustee, of all
or any part of such Trust Property, or to the extent required by law 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 the capacity aforesaid, any property, title, right or power deemed necessary
or desirable, subject to the other provisions of this Section 8.9. Any
co-trustee or separate trustee appointed pursuant to this Section 8.9 shall
either be (i) a natural person who is at least 21 years of age and a resident of
the United States, or (ii) a legal entity with its principal place of business
in the United States that shall act through one or more persons authorized to
bind such entity. If the Depositor does not join in such appointment within 15
days after the receipt by it of a request to do so, or in case an Event of
Default under the Indenture shall have occurred and be continuing, the Property
Trustee alone shall have the power to make such appointment.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Depositor, provided, however, that, if an event of Default shall have
occurred and be continuing, the Property Trustee may execute any such instrument
on behalf of the Depositor as its agent and attorney-in-fact therefor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(a) The Trust Securities shall be executed by one or more
Administrative Trustees, and the Trust Securities shall be delivered by
the Property Trustee, and all rights, powers, duties, and obligations
hereunder in respect of the custody of securities, cash and other
personal property held by, or required to be deposited or pledged with,
the Property Trustee specified hereunder shall be exercised solely by
the Property Trustee and not by such co-trustee or separate trustee.
(b) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of any
property covered by such appointment shall be conferred or imposed upon
and exercised or performed by the Property Trustee or by the Property
Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate
trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Property Trustee shall
be incompetent or unqualified to perform such act, in which event such
rights, powers, duties and obligations shall be exercised and performed
by such co-trustee or separate trustee.
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(c) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor,
may accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section 8.9, and, in case a Note Event of
Default has occurred and is continuing, the Property Trustee shall have
power to accept the resignation of, or remove, any such co-trustee or
separate trustee without the concurrence of the Depositor. Upon the
written request of the Property Trustee, the Depositor shall join with
the Property Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate
trustee so resigning or removed may be appointed in the manner provided
in this Section 8.9.
(d) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property
Trustee or any other trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any
act of a co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
SECTION 8.10. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Issuer Trustee (the "Relevant
Trustee") and no appointment of a successor Issuer Trustee pursuant to this
Article shall become effective until the acceptance of appointment by the
successor Issuer Trustee in accordance with the applicable requirements of
Section 8.11.
Subject to the immediately preceding paragraph, a Relevant Trustee may
resign at any time by giving written notice thereof to the Depositor and, in the
case of the Property Trustee and the Delaware Trustee, to the Holders. If the
instrument of acceptance by the successor Issuer Trustee required by Section
8.11 shall not have been delivered to the Relevant Trustee within 60 days after
the giving of such notice of resignation, the Relevant Trustee may petition, at
the expense of the Issuer Trust, any court in the State of Delaware for the
appointment of a successor Relevant Trustee.
Unless a Note Event of Default shall have occurred and be continuing,
the Property Trustee or the Delaware Trustee, or both of them, may be removed at
any time by Act of the Holder of Common Securities. If a Note Event of Default
shall have occurred and be continuing, the Property Trustee or the Delaware
Trustee, or both of them, may be removed at such time by Act of the Holders of
at least a majority in aggregate Liquidation Amount of the Outstanding Preferred
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of
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the Issuer Trust). An Administrative Trustee may be removed only by the Holder
of the Common Securities at any time.
If any Issuer Trustee shall be removed or become incapable of acting as
Issuer Trustee, or if a vacancy shall occur in the office of any Issuer Trustee
for any cause, at a time when no Note Event of Default shall have occurred and
be continuing, the Holder of the Common Securities, by Act of the Holder of the
Common Securities delivered to the retiring Relevant Trustee, shall promptly
appoint a successor Relevant Trustee or Trustees, and such successor Issuer
Trustee and the retiring Relevant Trustee shall comply with the applicable
requirements of Section 8.11. If the Property Trustee or the Delaware Trustee
shall resign, be removed or become incapable of continuing to act as the
Property Trustee or the Delaware Trustee, as the case may be, at a time when a
Note Event of Default shall have occurred and be continuing, the Holders of the
Preferred Securities, by Act of the Holders of a majority in Liquidation Amount
of the Preferred Securities then Outstanding delivered to the retiring Relevant
Trustee, shall promptly appoint a successor Relevant Trustee or Trustees, and
such successor Issuer Trustee and the retiring Relevant Trustee shall comply
with the applicable requirements of Section 8.11. If an Administrative Trustee
shall resign, be removed or become incapable of acting as Administrative
Trustee, at a time when a Note Event of Default shall have occurred and be
continuing, the Holder of the Common Securities by Act of the Holder of Common
Securities delivered to the retiring Administrative Trustee shall promptly
appoint a successor Administrative Trustee and such successor Administrative
Trustee and the retiring Administrative Trustee shall comply with the applicable
requirements of Section 8.11. If no successor Relevant Trustee shall have been
so appointed by the Holder of the Common Securities or Holders of the Preferred
Securities and accepted appointment in the manner required by Section 8.11, any
Holder who has been a Holder of Preferred Securities 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 Relevant Trustee.
The Depositor shall give notice of each resignation and each removal of
the Property Trustee or the Delaware Trustee and each appointment of a successor
Property Trustee or Delaware Trustee to all Holders in the manner provided in
Section 10.8. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Holder of Common
Securities, incompetent or incapacitated, the vacancy created by such death,
incompetence or incapacity may be filled by (a) the unanimous act of the
remaining Administrative Trustees if there are at least two of them, or (b)
otherwise by the Depositor (with the successor in each case being a Person who
satisfies the eligibility requirement for Administrative Trustees or Delaware
Trustee, as the case may be, set forth in Section 8.7).
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SECTION VIII.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee with respect
to the Trust Securities shall execute and deliver an amendment hereto wherein
each successor Relevant Trustee shall accept such appointment and which shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Issuer Trust and upon the execution and delivery of
such amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Issuer Trust or any successor Relevant Trustee such retiring
Relevant Trustee shall, upon payment of its charges, duly assign, transfer and
deliver to such successor Relevant Trustee all Trust Property, all proceeds
thereof and money held by such retiring Relevant Trustee hereunder with respect
to the Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Issuer Trust
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Relevant Trustee all such rights, powers and
trusts referred to in the preceding paragraph.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
SECTION VIII.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 may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which such Relevant Trustee shall be a
party, or any Person, succeeding to all or substantially all the corporate trust
business of such Relevant Trustee, shall be the successor of such Relevant
Trustee hereunder, provided, however, that 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.
SECTION VIII.13 Preferential Collection of Claims Against Depositor
or Issuer Trust.
If and when the Property Trustee shall be or become a creditor of the
Depositor or the Issuer Trust (or any other obligor upon the Preferred
Securities), the Property Trustee shall be
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subject to the provisions of the Trust Indenture Act regarding the collection of
claims against the Depositor or the Issuer Trust (or any such other obligor).
SECTION VIII.14. Property Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Issuer Trust or any other obligor upon the Trust
Securities or the property of the Issuer Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Trust Securities shall then be due and payable and irrespective of whether
the Property Trustee shall have made any demand on the Issuer 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 Trust 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
Trust Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION VIII.15. Reports by Property Trustee.
(a) Not later than November 15 of each year commencing with November
15, 2000, the Property Trustee shall transmit to all Holders in accordance with
Section 10.9, and to the Depositor, a brief report, dated as of the immediately
preceding September 15 concerning the
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Property Trustee and its actions under this Trust Agreement if and as may be
required pursuant to Section 313(a) of the Trust Indenture Act.
(b) In addition the Property Trustee shall transmit to Holders such
other reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each national stock exchange,
the Nasdaq National Market or such other interdealer quotation system or
self-regulatory organization upon which the Trust Securities are listed or
traded, if any, with the Commission and with the Depositor. The Depositor shall
notify the Property Trustee of any such listing or trading.
SECTION VIII.16. Reports to the Property Trustee.
Each of the Depositor and the Administrative Trustees shall provide to
the Property Trustee such documents, reports and information as required by
Section 314 of the Trust Indenture Act (if any) and the compliance certificate
required by Section 314(a) of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314 of the Trust Indenture Act, such
compliance certificate to be delivered on or before 120 days after the end of
each fiscal year of the Depositor.
SECTION VIII.17. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees shall provide to
the Property Trustee such evidence of compliance with any conditions precedent,
if any, provided for in this Trust Agreement that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) of the
Trust Indenture Act shall be given in the form of an Officers' Certificate.
SECTION VIII.18. Number of Issuer Trustees.
(a) The number of Issuer Trustees shall be five, provided that the
Property Trustee and the Delaware Trustee may be the same Person.
(b) If an Issuer Trustee ceases to hold office for any reason, a
vacancy shall occur. The vacancy shall be filled with an Issuer Trustee
appointed in accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of an Issuer Trustee shall not
operate to annul, dissolve or terminate the Issuer Trust.
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SECTION VIII.19. 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
2.7(a), 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 the Depositor the doing of such things and
the execution of such instruments either in the name of the Issuer Trust or the
names of the Administrative Trustees or otherwise as the Administrative Trustees
may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of this Trust Agreement.
SECTION VIII.20. Appointment of Administrative Trustees.
(a) 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 this Section 8.20, the Administrative Trustees in
office, regardless of their number (and notwithstanding any other provision of
this Agreement), shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the Administrative
Trustees by this Trust Agreement.
SECTION VIII.21. Delaware Trustee.
It is expressly understood and agreed by the parties hereto that in
fulfilling its obligations as Delaware Trustee hereunder on behalf of the Issuer
Trust (i) any agreements or instruments executed and delivered by Chase
Manhattan Bank Delaware are executed and delivered not in its individual
capacity but solely as Delaware Trustee under this Trust Agreement in the
exercise of the powers and authority conferred and vested in it, (ii) each of
the representations, undertakings and agreements herein made on the part of the
Issuer Trust is made and intended not as representations, warranties, covenants,
undertakings and agreements by Chase Manhattan Bank Delaware in its individual
capacity but is made and intended for the purpose of binding only the Issuer
Trust, and (iii) under no circumstances shall Chase Manhattan Bank Delaware in
its individual capacity by personally liable for the payment of any indebtedness
or expenses of the Issuer Trust or be liable for the breach of failure of any
obligation, representation, warranty or covenant made or undertaken b the Trust
under this Trust Agreement, except if such breach or failure is due to any gross
negligence or willful misconduct of the Delaware Trustee.
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ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER
SECTION XI.1. Dissolution Upon Expiration Date.
Unless earlier dissolved, the Issuer Trust shall automatically dissolve
on |X|, 2029 (the "Expiration Date"), and the Trust Property shall be liquidated
in accordance with Section 9.4.
SECTION IX.2. Early Termination.
The first to occur of any of the following events is an "Early
Termination Event", upon the occurrence of which the Issuer Trust shall be
dissolved:
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor, in its capacity as the
Holder of the Common Securities, unless the Depositor shall transfer
the Common Securities as provided by Section 5.11, in which case this
provision shall refer instead to any such successor Holder of the
Common Securities;
(b) the written direction to the Property Trustee from the
Holder of the Common Securities at any time to dissolve the Issuer
Trust and, after satisfaction of liability of the Issuer Trust as
required by applicable law, to distribute the Notes to Holders in
exchange for the Preferred Securities (which direction is optional and
wholly within the discretion of the Holder of the Common Securities);
(c) the redemption of all of the Preferred Securities in
connection with the payment at maturity redemption of all the Notes;
and
(d) the entry of an order for dissolution of the Issuer Trust
by a court of competent jurisdiction.
SECTION IX.3. Termination.
The respective obligations and responsibilities of the Issuer Trustees
and the Issuer Trust shall terminate upon the latest to occur of the following:
(a) the distribution by the Property Trustee to Holders of all amounts required
to be distributed hereunder upon the liquidation of the Issuer Trust pursuant to
Section 9.4, or upon the redemption of all of the Trust Securities pursuant to
Section 4.2; (b) the satisfaction of any expenses owed by the Issuer Trust; and
(c) the discharge of all administrative duties of the Administrative Trustees,
including the performance of any tax reporting obligations with respect to the
Issuer Trust or the Holders.
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SECTION IX.4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs or upon the Expiration Date, the Issuer Trust shall be
liquidated by the Issuer Trustees as expeditiously as the Issuer Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Issuer Trust as provided by applicable law, to each Holder a
Like Amount of Notes, subject to Section 9.4(d). Notice of liquidation shall be
given by the Property Trustee by first-class mail, postage prepaid mailed not
less than 30 nor more than 60 days prior to the Liquidation Date to each Holder
of Trust Securities at such Holder's address appearing in the Securities
Register. All such notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Notes; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Securities Certificates for Notes, or if
Section 9.4(d) applies receive a Liquidation Distribution, as the
Property Trustee shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect
the liquidation of the Issuer Trust and distribution of the Notes to Holders,
the Property Trustee, either itself acting as exchange agent or through the
appointment of a separate exchange agent, shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, establish such procedures as it shall deem appropriate to effect the
distribution of Notes in exchange for the Outstanding Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Notes will be
issued to Holders of Securities Certificates, upon surrender of such
Certificates to the exchange agent for exchange, (iii) the Depositor shall use
its best efforts to have the Notes listed on the New York Stock Exchange or on
such other exchange, interdealer quotation system or self-regulatory
organization on which the Preferred Securities are then listed, (iv) Securities
Certificates not so surrendered for exchange will be deemed to represent a Like
Amount of Notes bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on such Securities Certificates until such
certificates are so surrendered (and until such certificates are so surrendered,
no payments of interest or principal will be made to Holders of Securities
Certificates with respect to such Notes) and (v) all rights of Holders holding
Trust Securities will cease, except the right of such Holders to receive Notes
upon surrender of Securities Certificates.
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(d) If, notwithstanding the other provisions of this Section 9.4,
whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Notes in the manner provided
herein is determined by the Property Trustee not to be practical, the Trust
Property shall be liquidated, and the Issuer Trust shall be wound-up by the
Property Trustee in such manner as the Property Trustee determines. In such
event Holders will be entitled to receive out of the assets of the Issuer Trust
available for distribution to Holders, after satisfaction of liabilities to
creditors of the Issuer Trust as provided by applicable law, an amount equal to
the Liquidation Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such winding up the Liquidation Distribution can be
paid only in part because the Issuer Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the Issuer Trust on the Trust
Securities shall be paid on a pro rata basis (based upon Liquidation Amounts).
The Holder of the Common Securities will be entitled to receive Liquidation
Distributions upon any such winding-up pro rata (determined as aforesaid) with
Holders of all Trust Securities, except that, if a Note Event of Default
specified in Section 5.1(1) or 5.1(2) of the Indenture has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities as provided in Section 4.3.
SECTION IX.5. Mergers, Consolidations, Amalgamations or
Replacements of Issuer Trust.
The Issuer Trust may not merge with or into, consolidate, amalgamate,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person except pursuant to this Article IX.
At the request of the Holders of the Common Securities, without the consent of
the Holders the Issuer Trust may merge with or into, consolidate, amalgamate, or
be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of any
State; provided, that (i) such successor entity either (A) expressly assumes all
of the obligations of the Issuer Trust with respect to the Preferred Securities,
or (B) substitutes for the Preferred Securities other securities having
substantially the same terms as the Preferred Securities (the "Successor
Securities") so long as the Successor Securities have the same priority as the
Preferred Securities with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) a trustee of such successor entity
possessing the same powers and duties as the Property Trustee is appointed to
hold the Notes, (iii) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization that then assigns a rating to the Preferred
Securities, (iv) the Preferred Securities are listed, or any Successor
Securities will be listed upon notice of issuance, on any national securities
exchange or interdealer quotation system on which the Preferred Securities are
then listed, if any, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has a
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purpose substantially identical to that of the Issuer Trust, (vii) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
the Depositor has received an Opinion of Counsel to the effect that (A) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the Holders
of the Preferred Securities (including any Successor Securities) in any material
respect, and (B) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Issuer Trust nor such
successor entity will be required to register as an "investment company" under
the Investment Company Act, and (viii) the Depositor or its permitted transferee
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 Agreement. Notwithstanding the foregoing,
the Issuer Trust shall not, except with the consent of Holders of all of the
Preferred Securities, consolidate, amalgamate, merge with or into, or be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to any other Person or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Issuer Trust or the successor entity to be taxable as a corporation or
classified as other than a grantor trust for United States federal income tax
purposes or cause the Notes to be treated as other than indebtedness of the
Corporation for United States federal income tax purposes.
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION X.1. Limitation of Rights of Holders.
Except as set forth in Section 9.2, the death, bankruptcy, termination,
dissolution or incapacity of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor annul, dissolve or terminate the Issuer Trust nor entitle the
legal representatives or heirs of such Person or any Holder for such Person, to
claim an accounting, take any action or bring any proceeding in any court for a
partition or winding up of the arrangements contemplated hereby, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.
SECTION X.2. Agreed Tax Treatment of Issuer Trust and Trust
Securities.
The parties hereto and, by its acceptance or acquisition of a Trust
Security or a beneficial interest therein the Holder of, and any Person that
acquires a beneficial interest in, such Trust Security intend and agree to treat
the Issuer Trust as a grantor trust for United States federal, state and local
tax purposes, and to treat the Trust Securities (including but not limited to
all payments and proceeds with respect to such Trust Securities) as undivided
beneficial ownership interests in
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the Trust Property (and payments and proceeds therefrom, respectively) for
United States federal, state and local tax purposes. The provisions of this
Trust Agreement shall be interpreted to further this intention and agreement of
the parties.
SECTION X.3. Amendment.
(a) This Trust Agreement may be amended from time to time by the
Property Trustee, Administrative Trustees and the Holder of all the Common
Securities, without the consent of any Holder of the Preferred Securities, (i)
to cure any ambiguity, correct or supplement any provision herein that may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Trust Agreement, which
shall not be inconsistent with the other provisions of this Trust Agreement, or
(ii) to modify, eliminate or add to any provisions of this Trust Agreement to
such extent as shall be necessary to ensure that the Issuer Trust will not be
taxable as a corporation or will be classified as other than a grantor trust for
United States federal income tax purposes at all times that any Trust Securities
are Outstanding or to ensure that the Notes are treated as indebtedness of the
Depositor for United States federal income tax purposes, or to ensure that the
Issuer Trust will not be required to register as an "investment company" under
the Investment Company Act; provided, however, that in the case of either
clauses (i) or (ii) such action shall not adversely affect in any material
respect the interests of any Holder.
(b) Except as provided in Section 10.3(c) hereof, any provision of this
Trust Agreement may be amended by the Property Trustee, the Administrative
Trustees and the Holders of all of the Common Securities and with (i) the
consent of Holders of at least a Majority in Liquidation Amount of the Preferred
Securities, and (ii) receipt by the Issuer Trustees of an Opinion of Counsel to
the effect that such amendment or the exercise of any power granted to the
Issuer Trustees in accordance with such amendment will not cause the Issuer
Trust to be taxable as a corporation or classified as other than a grantor trust
for United States federal income tax purposes or affect the treatment of the
Notes as indebtedness of the Corporation for United States federal income tax
purposes or affect the Issuer Trust's exemption from status as an "investment
company" under the Investment Company Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Holder, this Trust
Agreement 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 to institute suit for the
enforcement of any such payment on or after such date; and notwithstanding any
other provision herein, without the unanimous consent of the Holders, this
paragraph (c) of this Section 10.3 may not be amended.
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(d) Notwithstanding any other provisions of this Trust Agreement, no
Issuer Trustee shall enter into or consent to any amendment to this Trust
Agreement that would cause the Issuer Trust to fail or cease to qualify for the
exemption from status as an "investment company" under the Investment Company
Act or to be taxable as a corporation or to be classified as other than a
grantor trust for United States federal income tax purposes or that would cause
the Notes to fail or cease to be treated as indebtedness of the Depositor for
United States federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor and the Administrative Trustees, this Trust
Agreement may not be amended in a manner that imposes any additional obligation
on the Depositor or the Administrative Trustees.
(f) If any amendment to this Trust Agreement is made, the
Administrative Trustees or the Property Trustee shall promptly provide to the
Depositor a copy of such amendment.
(g) No Issuer Trustee shall be required to enter into any amendment to
this Trust Agreement that affects its own rights, duties or immunities under
this Trust Agreement. The Issuer Trustees shall be entitled to receive an
Opinion of Counsel and an Officers' Certificate stating that any amendment to
this Trust Agreement is in compliance with this Trust Agreement and all
conditions precedent herein provided for relating to such action have been met.
SECTION X.4. Separability.
If any provision in this Trust Agreement or in the Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION X.5. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
HOLDERS, THE ISSUER TRUST, THE DEPOSITOR AND THE ISSUER TRUSTEES WITH RESPECT TO
THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS
CONFLICTS OF LAWS PROVISIONS, PROVIDED, THAT THE IMMUNITIES AND STANDARD OF CARE
OF THE PROPERTY TRUSTEE IN CONNECTION WITH THE ADMINISTRATION OF ITS TRUSTS AND
DUTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK. THE PROVISIONS OF SECTION 3540 OF TITLE
12 OF THE DELAWARE CODE SHALL NOT APPLY TO THIS TRUST.
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SECTION X.6. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
may be made on the next succeeding day that is a Business Day (except as
otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and
effect as though made on the date fixed for such payment, and no Distributions
shall accumulate on such unpaid amount for the period after such date.
SECTION X.7. Successors.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Issuer Trust and any Issuer
Trustee, including any successor by operation of law. Except in connection with
a transaction involving the Depositor that is permitted under Article VIII of
the Indenture and pursuant to which the assignee agrees in writing to perform
the Depositor's obligations hereunder, the Depositor shall not assign its
obligations hereunder.
SECTION X.8. Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION X.9. Reports, Notices and Demands.
Any report, notice, demand or other communication that by any provision
of this Trust Agreement is required or permitted to be given or served to or
upon any Holder or the Depositor may be given or served in writing by deposit
thereof, first-class postage prepaid, in the United States mail, hand delivery
or facsimile transmission, in each case, addressed, (a) in the case of a Holder
of Preferred Securities, to such Holder as such Holder's name and address may
appear on the Securities Register; and (b) in the case of the Holder of all the
Common Securities or the Depositor, to Everest Reinsurance Holdings, Inc., 477
Martinsville Road, P.O. Box 830, Liberty Corner, New Jersey 07938-0830,
Attention: |X|, facsimile no.: |X|, or to such other address as may be specified
in a written notice by the Holder of all the Common Securities or the Depositor,
as the case may be, to the Property Trustee. Such notice, demand or other
communication to or upon a Holder shall be deemed to have been sufficiently
given or made, for all purposes, upon hand delivery, mailing or transmission.
Such notice, demand or other communication to or upon the Depositor shall be
deemed to have been sufficiently given or made only upon actual receipt of the
writing by the Depositor.
Any notice, demand or other communication that by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Property Trustee, the
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Delaware Trustee, the Administrative Trustees or the Issuer Trust shall be given
in writing by deposit thereof, first-class postage prepaid, in the U.S. mail,
hand delivery or facsimile transmission, addressed to such Person as follows:
(a) with respect to the Property Trustee to |X|, Attention: |X|, facsimile no.:
|X|; (b) with respect to the Delaware Trustee, to |X|, Attention: |X|; (c) with
respect to the Administrative Trustees, to them at the address above for notices
to the Depositor, marked "Attention: Administrative Trustees of Everest Re
Capital Trust", and (d) with respect to the Issuer Trust, to its principal
office specified in Section 2.1, with a copy to the Property Trustee. Such
notice, demand or other communication to or upon the Issuer Trust, the Property
Trustee or the Administrative Trustees shall be deemed to have been sufficiently
given or made only upon actual receipt of the writing by the Issuer Trust, the
Property Trustee or such Administrative Trustees.
SECTION X.10. Agreement Not to Petition.
Each of the Issuer Trustees and the Depositor agree for the benefit of
the Holders that, until at least one year and one day after the Issuer Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Issuer Trust under any bankruptcy,
insolvency, reorganization or other similar law (including the United States
Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in the
commencement of any proceeding against the Issuer Trust under any Bankruptcy
Law. If the Depositor takes action in violation of this Section 10.10, the
Property Trustee agrees, for the benefit of Holders, that at the expense of the
Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Issuer
Trust or the commencement of such action and raise the defense that the
Depositor has agreed in writing not to take such action and should be estopped
and precluded therefrom and such other defenses, if any, as counsel for the
Property Trustee or the Issuer Trust may assert.
SECTION X.11. Trust Indenture Act; Conflict with Trust Indenture
Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions of the Trust Indenture
Act.
(b) The Property Trustee shall be the only Issuer Trustee that is a
trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with the
duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act
through operation of Section 318(c) thereof, such imposed duties shall control.
If any provision of this Trust Agreement modifies or excludes any provision of
the Trust Indenture Act which may be so modified or excluded, the latter
provision shall be deemed to apply to this Trust Agreement as so modified or
excluded, as the case may be.
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(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Issuer Trust.
SECTION X.12. Acceptance of Terms of Trust Agreement, Guarantee
Agreement and Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY
OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE GUARANTEE AGREEMENT
AND THE INDENTURE, AND AGREEMENT TO THE SUBORDINATION PROVISIONS, THE TAX
TREATMENT PROVISIONS AND OTHER TERMS OF THE GUARANTEE AGREEMENT AND THE
INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE ISSUER TRUST, SUCH HOLDER
AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE
BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE ISSUER TRUST AND SUCH HOLDER AND
SUCH OTHERS.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Trust Agreement as of the day and year first above written.
EVEREST REINSURANCE HOLDINGS, INC.
as Depositor
By:
----------------------------
Name:
-----------------------
Title:
----------------------
THE CHASE MANHATTAN BANK, CHASE MANHATTAN BANK DELAWARE,
as Property Trustee as Delaware Trustee
By: By:
---------------------- ----------------------------
Name: Name:
----------------- -----------------------
Title: Title:
---------------- ----------------------
STEPHEN L. LIMAURO, FRANK N. LOPAPA,
as Administrative Trustee as Administrative Trustee
By: By:
---------------------- ----------------------------
Name: Name:
----------------- -----------------------
ROBERT T. LUPO,
as Administrative Trustee
By:
----------------------
Name:
-----------------
<PAGE>
Exhibit A
[CERTIFICATE OF TRUST]
OF
EVEREST RE CAPITAL TRUST
This Certificate of Trust of Everest Re Capital Trust (the
"Trust"), dated September |X|, 1999, is being duly executed and filed on behalf
of the Trust by the undersigned, as trustee, to form a business trust under the
Delaware Business Trust Act (12 Del. C. Section 3801 et seq.) (the "Act").
1. Name. The name of the business trust formed by this
Certificate of Trust is Everest Re Capital Trust.
2. Delaware Trustee. The name and business address of the
trustee of the Trust in the State of Delaware are Chase Manhattan Bank Delaware,
|X|.
3. Effective Date. This Certificate of Trust shall be
effective upon its filing.
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate of Trust in accordance with Section 3811(a)(1) of the Act..
CHASE MANHATTAN BANK DELAWARE, not
in its individual capacity but solely
as trustee
By:
-------------------------------------
Name:
Title:
CHASE MANHATTAN BANK DELAWARE, not
in its individual capacity but solely
as trustee
By:
-------------------------------------
Name:
Title:
STEPHEN L. LIMAURO
----------------------------------------
A-1
<PAGE>
Exhibit B
[FORM OF LETTER OF REPRESENTATIONS]
October __, 1999
The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York 10041-0099.
Attention: General Counsel's Office
Re: Everest Re Capital Trust
___% Preferred Securities, Series I
CUSIP No.
------------------------------------
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters
relating to the issuance and deposit with The Depository Trust Company ("DTC")
of the book-entry-only portion of the ____% Preferred Securities (the "Preferred
Securities"), of Everest Re Capital Trust, a statutory business trust formed
under the laws of the State of Delaware (the "Issuer"), governed by the Amended
and Restated Trust Agreement, dated as of October __, 1999 (the "Amended and
Restated Trust Agreement"), between Everest Reinsurance Holdings, Inc. (the
"Corporation"), as Depositor, The Chase Manhattan Bank, as Property Trustee,
Chase Manhattan Bank Delaware, as Delaware Trustee and Several Holders as
defined therein. The payment of distributions on the Preferred Securities and
payments due upon liquidation of the Issuer or redemption of the Preferred
Securities, to the extent the Issuer has funds available for the payment
thereof, are guaranteed by the Corporation to the extent set forth in a
Guarantee Agreement, dated as of October __, 1999, between the Corporation and
The Chase Manhattan Bank, as Guarantee Trustee with respect to the Preferred
Securities. The Corporation and the Issuer propose to sell the Preferred
Securities to the Underwriters (the "Underwriters") pursuant to a Pricing
Agreement, dated as of October __, 1999, by and among the Underwriters, the
Issuer and the Corporation, and the Underwriting Agreement, dated as of October
__, 1999, by and among the Underwriters, the Issuer and the Corporation, and the
Underwriters wish to take delivery of the
B-1
<PAGE>
Preferred Securities through DTC. The Chase Manhattan Bank is acting as transfer
agent and registrar with respect to the Preferred Securities (the "Transfer
Agent and Registrar").
To induce DTC to accept the Preferred Securities as eligible
for deposit at DTC, and to act in accordance with DTC's rules with respect to
the Preferred Securities, the Issuer and the Transfer Agent and Registrar make
the following representations to DTC:
1. Prior to the closing of the sale of the Preferred
Securities to the Underwriters on October __, 1999, there shall be deposited
with, or held by the Transfer Agent and Registrar as custodian for, DTC one or
more global certificates (individually and collectively, the "Global
Certificate") registered in the name of DTC's nominee, Cede & Co., representing
an aggregate of |X|, Preferred Securities and bearing the following legend:
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to Issuer
or its agent for registration of transfer, exchange, or payment, and
any certificate issued is registered in the name of Cede & Co. or in
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHER WISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
2. The Amended and Restated Trust Agreement of the Issuer
provides for the voting by holders (with no provision for revocation of consents
or votes by subsequent holders) of the Preferred Securities under certain
limited circumstances. The Issuer shall establish a record date for such
purposes and shall, to the extent possible, give DTC notice of such record date
not less than 15 calendar days in advance of such record date.
3. In the event of a stock split, conversion,
recapitalization, reorganization or any other similar transaction resulting in
the cancellation of all or any part of the Preferred Securities outstanding, the
Issuer or the Transfer Agent and Registrar shall send DTC a notice of such event
as soon as possible but, at least 5 business days prior to the effective date of
such event.
4. In the event of any distribution on, or an offering or
issuance of rights with respect to, the Preferred Securities outstanding, the
Issuer or the Transfer Agent and Registrar shall send DTC a notice specifying:
(a) the amount of and conditions, if any, applicable to the payment of any such
distribution or any such offering or issuance of rights; (b) any applicable
expiration or deadline date, or any date by which any action on the part of the
holders of Preferred Securities is required; and (c) the date any required
notice is to be mailed by or on behalf of the Issuer to holders of Preferred
Securities or published by or on behalf of the Issuer
B-2
<PAGE>
(whether by mail or publication, the "Publication Date"). Such notice shall be
sent to DTC by a secure means (e.g., legible telecopy, registered or certified
mail, overnight delivery) in a timely manner designed to assure that such notice
is in DTC's possession no later than the close of business on the business day
before the Publication Date. The Issuer or the Transfer Agent and Registrar will
forward such notice either in a separate secure transmission for each CUSIP
number or in a secure transmission of multiple CUSIP numbers (if applicable)
that includes a manifest or list of each CUSIP number submitted in that
transmission. (The party sending such notice shall have a method to verify
subsequently the use of such means and the timeliness of such notice.) The
Publication Date shall be not less than 30 calendar days nor more than 60
calendar days prior to the payment of any such distribution or any such offering
or issuance of rights with respect to the Preferred Securities. After
establishing the amount of payment to be made on the Preferred Securities, the
Issuer or the Transfer Agent and Registrar will notify DTC's Dividend Department
of such payment 5 business days prior to payment date. Notices to DTC's Dividend
Department by telecopy shall be sent to (212) 709-1723. Such notices by mail or
by any other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Transfer Agent and Registrar shall confirm
DTC's receipt of such telecopy by telephoning the Dividend Department at (212)
709-1270.
5. In the event of a redemption by the Issuer of the Preferred
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or the Transfer Agent and
Registrar to DTC not less than 30 calendar days prior to such event by a secure
means in the manner set forth in paragraph 4. Such redemption notice shall be
sent to DTC's Call Notification Department at (516) 227-4164 or (516) 227-4190,
and receipt of such notice shall be confirmed by telephoning (516) 227-4070.
Notice by mail or by any other means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred
Securities, notice specifying the terms of the tender and the Publication Date
of such notice shall be sent by the Issuer or the Transfer Agent and Registrar
to DTC by a secure means and in a timely manner as described in paragraph 4.
Notices to DTC pursuant to this paragraph and notices of other
B-3
<PAGE>
corporate actions (including mandatory tenders, exchanges and capital changes),
shall be sent, unless notification to another department is expressly provided
for herein, by telecopy to DTC's Reorganization Department at (212) 709-1093 or
(212) 709-1094 and receipt of such notice shall be confirmed by telephoning
(212) 709-6884, or by mail or any other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain
the CUSIP number or numbers of the Preferred Securities and the accompanying
designation of the Preferred Securities, which, as of the date of this letter,
is "Everest Re Capital Trust , ___% Preferred Securities".
8. Distribution payments or other cash payments with respect
to the Preferred Securities shall be governed by DTC's current Principal and
Income Payments Rider, a copy of which is attached hereto as Annex I. For
purposes of this letter, the term "Agent" used in Annex I shall be deemed to
refer to The Chase Manhattan Bank or any successor Property Trustee under the
Amended and Restated Trust Agreement.
9. DTC may direct the Issuer and the Transfer Agent and
Registrar to use any other telecopy number or address of DTC as the number or
address to which notices or payments may be sent.
10. In the event of a conversion, redemption, or any other
similar transaction (e.g., tender made and accepted in response to the Issuer's
or the Transfer Agent and Registrar's invitation) necessitating a reduction in
the aggregate number of Preferred Securities outstanding evidenced by the Global
Certificate, DTC, in its discretion: (a) may request the Issuer to issue a new
Global Certificate; or (b) may make an appropriate notation on the Global
Certificate indicating the date and amount of such reduction.
11. DTC may discontinue its services as a securities
depositary with respect to the Preferred Securities at any time by giving
reasonable prior written notice to the Issuer and the Transfer Agent and
Registrar (at which time DTC will confirm with the Issuer or the Transfer Agent
and Registrar the aggregate number of Preferred Securities deposited with it)
and discharging its responsibilities with respect thereto under applicable law.
Under such circumstances, the Issuer may determine to make alternative
arrangements for book-entry settlement for the Preferred Securities, make
available one or more separate global certificates evidencing Preferred
Securities to any Participant having Preferred Securities credited to its DTC
account, or issue definitive Preferred Securities to the beneficial holders
thereof, and in any such
B-4
<PAGE>
case, DTC agrees to cooperate fully with the Issuer and the Transfer Agent and
Registrar and to return the Global Certificate, duly endorsed for transfer as
directed by the Issuer or the Transfer Agent and Registrar, together with any
other documents of transfer reasonably requested by the Issuer or the Transfer
Agent and Registrar.
12. In the event that the Issuer determines that beneficial
owners of Preferred Securities shall be able to obtain definitive Preferred
Securities, the Issuer or the Transfer Agent and Registrar shall notify DTC of
the availability of certificates. In such event, the Issuer or the Transfer
Agent and Registrar shall issue, transfer and exchange certificates in
appropriate amounts, as required by DTC and others, and DTC agrees to cooperate
fully with the Issuer and the Transfer Agent and Registrar and to return the
Global Certificate, duly endorsed for transfer as directed by the Issuer or the
Transfer Agent and Registrar, together with any other documents of transfer
reasonably requested by the Issuer or the Transfer Agent and Registrar.
13. This letter may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
B-5
<PAGE>
Nothing herein shall be deemed to require the Transfer Agent and
Registrar to advance funds on behalf of Everest Re Capital Trust.
Very truly yours,
EVEREST RE CAPITAL TRUST
(As Issuer)
By:
---------------------------
Administrative Trustee
|X|
(As Transfer Agent and Registrar)
By:
---------------------------
Name:
Title:
RECEIVED AND ACCEPTED:
THE DEPOSITORY TRUST COMPANY
By:
---------------------------
Authorized Officer
B-6
<PAGE>
Exhibit C
[FORM OF COMMON SECURITIES CERTIFICATE]
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE
DEPOSITOR OR AN AFFILIATE OF THE DEPOSITOR IN
COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE
TRUST AGREEMENT AND ONLY IN CONNECTION WITH A
SIMULTANEOUS DELEGATION AND ASSIGNMENT OF THE EXPENSE AGREEMENT
REFERRED TO THEREIN
Certificate Number Number of Common Securities
C-
Certificate Evidencing Common Securities
of
Everest Re Capital Trust
___% Common Securities
(liquidation amount $25 per Common Security)
Everest Re Capital Trust, a statutory business trust created under the
laws of the State of Delaware (the "Issuer Trust"), hereby certifies that
Everest Reinsurance Holdings, Inc., a Delaware corporation (the "Holder") is the
registered owner of common securities of the Issuer Trust representing undivided
common beneficial interests in the assets of the Issuer Trust and designated the
___% Common Securities (liquidation amount $25 per Common Security) (the "Common
Securities"). Except in accordance with Section 5.11 of the Trust Agreement (as
defined below) the Common Securities are not transferable and any attempted
transfer hereof other than in accordance therewith shall be void. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this certificate and
the Common Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Trust Agreement
of the Issuer Trust, dated as of October |X|, 1999, as the same may be amended
from time to time (the "Trust Agreement"), among Everest Reinsurance Holdings,
Inc., as Depositor, The Chase Manhattan Bank, as Property Trustee, Chase
Manhattan Bank Delaware, as Delaware Trustee, and the Holders, from time to
time, of Trust Securities. The Issuer Trust will furnish a copy of the Trust
Agreement to the Holder without charge upon written request to the Issuer Trust
at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
This Common Securities Certificate shall be governed by and construed
in accordance with the laws of the State of Delaware.
C-1
<PAGE>
Terms used but not defined herein have the meanings set forth in the
Trust Agreement.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Issuer
Trust has executed this certificate this __ day of October , 1999.
EVEREST RE CAPITAL TRUST
By:
---------------------------
Name:
Administrative Trustee
C-2
<PAGE>
Exhibit D
[FORM OF EXPENSE AGREEMENT]
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT AS TO EXPENSES AND LIABILITIES, dated as of October |X|,
1999, between Everest Reinsurance Holdings, Inc., a Delaware corporation (the
"Corporation"), and Everest Re Capital Trust, a Delaware business trust (the
"Issuer Trust").
WHEREAS, the Issuer Trust intends to issue its Common Securities (the
"Common Securities") to and acquire Notes from the Corporation and to issue and
sell |X|% Preferred Securities (the "Preferred Securities") with such powers,
preferences and special rights and restrictions as are set forth in the Amended
and Restated Trust Agreement, dated as of October |X|, 1999, among the
Corporation, as Depositor, The Chase Manhattan Bank, as Property Trustee, Chase
Manhattan Bank Delaware, as Delaware Trustee, and the Holders of Trust
Securities, as the same may be amended from time to time (the "Trust
Agreement");
WHEREAS, the Corporation will directly or indirectly own all of the
Common Securities of the Trust and will issue the Notes;
WHEREAS, capitalized terms used but not defined herein have the
meanings set forth in the Trust Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
SECTION 1.1. Guarantee by the Corporation. Subject to the terms and
conditions hereof, the Corporation hereby irrevocably and unconditionally
guarantees to each person or entity to whom the Issuer Trust is now or hereafter
becomes indebted or liable (the "Beneficiaries") the full payment, when and as
due, of any and all Obligations (as hereinafter defined) to such Beneficiaries.
As used herein, "Obligations" means any costs, expenses or liabilities of the
Issuer Trust, other than obligations of the Issuer Trust to pay to holders of
any Trust Securities the amounts due such holders pursuant to the terms of the
Trust Securities. This Agreement is intended to be for the benefit of, and to be
enforceable by, all such Beneficiaries, whether or not such Beneficiaries have
received notice hereof.
SECTION 1.2. Subordination of Guarantee. The guarantee and other
liabilities and obligations of the Corporation under this Agreement shall
constitute unsecured obligations of the Corporation and shall rank subordinate
and junior in right of payment to all Senior Indebtedness (as defined in the
Indenture) of the Corporation to the extent and in the manner set forth in the
Indenture with respect to the Notes, and the provisions of Article XIII of the
Indenture will apply, mutatis mutandis,
D-1
<PAGE>
to the obligations of the Corporation hereunder. The obligations of the
Corporation hereunder do not constitute Senior Indebtedness (as defined in the
Indenture) of the Corporation.
SECTION 1.3. Term of Agreement. This Agreement shall terminate and be
of no further force and effect upon the later of (a) the date on which full
payment has been made of all amounts payable to all holders of all the Preferred
Securities (whether upon redemption, liquidation, exchange or otherwise) and (b)
the date on which the Notes shall have been distributed to the Holders of the
Trust Securities as provided in Article IX of the Trust Agreement; provided,
however, that this Agreement shall continue to be effective or shall be
reinstated, as the case may be, if at any time any holder of Preferred
Securities or any Beneficiary must restore payment of any sums paid under the
Preferred Securities, under any Obligation, under the Guarantee Agreement dated
the date hereof by the Corporation and The Chase Manhattan Bank, as guarantee
trustee, or under this Agreement for any reason whatsoever. This Agreement is
continuing, irrevocable, unconditional and absolute.
SECTION 1.4. Waiver of Notice. The Corporation hereby waives notice of
acceptance of this Agreement and of any Obligation to which it applies or may
apply, and the Corporation hereby waives presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 1.5. No Impairment. The obligations, covenants, agreements and
duties of the Corporation under this Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the extension of time for the payment by the Issuer Trust of all or
any portion of the Obligations or for the performance of any other obligation
under, arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part of
the Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the Obligations or any
action on the part of the Issuer Trust granting indulgence or extension of any
kind; or
(c) 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 Trust or any of the assets of
the Issuer Trust (other than the dissolution of the Issuer Trust in accordance
with the terms thereof).
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Corporation with respect to the happening of any of the
foregoing.
D-2
<PAGE>
SECTION 1.6. Enforcement. A Beneficiary may enforce this Agreement
directly against the Corporation and the Corporation waives any right or remedy
to require that any action be brought against the Issuer Trust or any other
person or entity before proceeding against the Corporation.
SECTION 1.7. Subrogation. The Corporation shall be subrogated to all
rights (if any) of any Beneficiary against the Issuer Trust in respect of any
amounts paid to the Beneficiaries by the Corporation under this Agreement;
provided, however, that the Corporation shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
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 Agreement, if,
at the time of any such payment, any amounts are due and unpaid under this
Agreement.
ARTICLE II
SECTION 2.1. Assignment. This Agreement may not be assigned by either
party hereto without the consent of the other, and any purported assignment
without such consent shall be void.
SECTION 2.2. Binding Effect. All guarantees and agreements contained in
this Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the
Beneficiaries.
SECTION 2.3. Amendment. So long as there remains any Beneficiary or any
Preferred Securities are outstanding, this Agreement shall not be modified or
amended in any manner adverse to such Beneficiary or to the holders of the
Preferred Securities without the consent of such Beneficiary or the holders of
the Preferred Securities, as the case may be.
SECTION 2.4. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be given in writing by
delivering the same against receipt therefor by facsimile transmission
(confirmed by mail), telex or by registered or certified mail, addressed as
follows (and if so given, shall be deemed given when mailed or upon receipt of
an answer-back, if sent by telex):
If given to the Corporation:
Everest Reinsurance Holdings, Inc.
477 Martinsville Road
P.O. Box 830
Liberty Corner, New Jersey 07938
Facsimile No.: |X|
Attention: |X|
D-3
<PAGE>
If given to the Issuer Trust:
Everest Re Capital Trust
477 Martinsville Road
P.O. Box 830
Liberty Corner, New Jersey 07938
Facsimile No.: |X|
Attention: |X|
With a copy to:
Everest Reinsurance Holdings, Inc.
477 Martinsville Road
P.O. Box 830
Liberty Corner, New Jersey 07938
Facsimile No.: |X|
Attention: |X|
SECTION 2.5. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
D-4
<PAGE>
THIS AGREEMENT is executed as of the day and year first above written.
EVEREST REINSURANCE HOLDINGS, INC.
By:
----------------------------------
Name:
Title:
EVEREST RE CAPITAL TRUST
By:
----------------------------------
Name:
Title:
D-5
<PAGE>
Exhibit E
[FORM OF PREFERRED SECURITIES CERTIFICATE]
[IF THE PREFERRED SECURITIES CERTIFICATE IS TO BE EVIDENCED BY A GLOBAL
PREFERRED SECURITY, INSERT--This Preferred Securities Certificate is a Global
Preferred Security within the meaning of the Trust Agreement hereinafter
referred to and is registered in the name of a Clearing Agency or a nominee of a
Clearing Agency. This Preferred Securities Certificate is exchangeable for
Preferred Securities Certificates registered in the name of a person other than
the Clearing Agency or its nominee only in the limited circumstances described
in the Trust Agreement and may not be transferred except 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, except in the limited circumstances described in the Trust Agreement.
Unless this Preferred Security Certificate is presented by an
authorized representative of The Depository Trust Company, a New York
Corporation ("DTC"), to Everest Re Capital Trust or its agent for registration
of transfer, exchange or payment, and any Preferred Security Certificate issued
is registered in the name of Cede & Co. or such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO A PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
E-1
<PAGE>
Certificate Number Number of Preferred Securities
CUSIP NO.
---------------
Certificate Evidencing Preferred Securities
of
Everest Re Capital Trust
____% Preferred Securities, Series I
(liquidation amount $25 per Preferred Security)
Everest Re Capital Trust, a statutory business trust created under the laws of
the State of Delaware (the "Issuer Trust"), hereby certifies that Everest
Reinsurance Holdings, Inc., a Delaware corporation (the "Holder") is the
registered owner of Preferred Securities of the Trust representing an undivided
capital beneficial interest in the assets of the Trust and designated the
Everest Re Capital Trust ____% Preferred Securities, (liquidation amount $25 per
Preferred Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Issuer Trust, in person or by a
duly authorized attorney, upon surrender of this certificate duly endorsed and
in proper form for transfer as provided in Section 5.5 of the Trust Agreement
(as defined below). The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities are set
forth in, and this certificate and the Preferred Securities represented hereby
are issued and shall in all respects be subject to the terms and provisions of,
the Trust Agreement of the Issuer Trust, dated as of October __, 1999, as the
same may be amended from time to time (the "Trust Agreement"), among Everest
Reinsurance Holdings, Inc., as Depositor, The Chase Manhattan Bank, as Property
Trustee, Chase Manhattan Bank Delaware, as Delaware Trustee, and the Holders of
Trust Securities. The Holder is entitled to the benefits of the Guarantee
Agreement entered into by Everest Reinsurance Holdings, Inc., a New York
corporation, and The Chase Manhattan Bank, as Guarantee Trustee, dated as of
October __, 1999, as the same may be amended from time to time (the "Guarantee
Agreement"), to the extent provided therein. The Issuer Trust will furnish a
copy of the Trust Agreement and the Guarantee Agreement to the Holder without
charge upon written request to the Property Trustee at its principal place of
business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
E-2
<PAGE>
This Preferred Securities Certificate shall be governed by and
construed in accordance with the laws of the State of Delaware.
All capitalized terms used but not defined in this Preferred Securities
Certificate are used with the meanings specified in the Trust Agreement,
including the Exhibits thereto.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Issuer
Trust has executed this certificate this __ day of October, 1999.
EVEREST RE CAPITAL TRUST
By:
----------------------------------
Name:
Administrative Trustee
E-3
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Preferred Security Certificate on the books of the Issuer
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)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
E-4
<PAGE>
S&C Draft of November 15, 1999
Exhibit 4.8
================================================================================
GUARANTEE AGREEMENT
between
EVEREST REINSURANCE HOLDINGS, INC.,
as Guarantor,
and
THE CHASE MANHATTAN BANK,
as Guarantee Trustee
_____________________________________
EVEREST RE CAPITAL TRUST
_____________________________________
Dated as of __________ __, ____
================================================================================
<PAGE>
EVEREST RE CAPITAL TRUST
Certain Sections of this Guarantee Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Section of Trust Indenture Act Section of Guarantee Agreement
- ------------------------------ ------------------------------
<S> <C>
310(a)..................................................4.1(a)
(b)..................................................4.1(c), 2.8
(c)..................................................Inapplicable
311(a)..................................................2.2(b)
(b)..................................................2.2(b)
(c)..................................................Inapplicable
312(a)..................................................2.2(a)
(b)..................................................2.2(b)
313 ..................................................2.3
314(a)..................................................2.4
(b)..................................................Inapplicable
(c)..................................................2.5
(d)..................................................Inapplicable
(e)..................................................1.1, 2.5, 3.2
(f)..................................................2.1, 3.2
315(a)..................................................3.1(d)
(b)..................................................2.7
(c)..................................................3.1
(d)..................................................3.1(d)
316(a)..................................................1.1, 2.6, 5.4
(b)..................................................5.3
(c)..................................................8.2
317(a)..................................................Inapplicable
(b)..................................................Inapplicable
318(a)..................................................2.1(b)
(b)..................................................2.1
(c)..................................................2.1(a)
</TABLE>
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Guarantee Agreement.
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE I Interpretation and Definitions
<S> <C>
Section 1.1. Interpretation...................................................2
Section 1.2. Definitions......................................................2
ARTICLE II Trust Indenture Act
Section 2.1. Trust Indenture Act; Application.................................6
Section 2.2. List of Holders..................................................6
Section 2.3. Reports by the Guarantee Trustee.................................7
Section 2.4. Periodic Reports to the Guarantee Trustee........................7
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............................................8
ARTICLE III Powers, Duties and Rights of the Guarantee Trustee
Section 3.1. Powers and Duties of the Guarantee Trustee...................... 8
Section 3.2. Certain Rights of Guarantee Trustee.............................10
Section 3.3. Compensation....................................................11
Section 3.4. Indemnity.......................................................11
ARTICLE IV Guarantee Trustee
Section 4.1. Guarantee Trustee: Eligibility..................................12
Section 4.2. Appointment, Removal and Resignation of the Guarantee Trustee...12
ARTICLE V Guarantee
Section 5.1. Guarantee.......................................................13
Section 5.2. Waiver of Notice and Demand.....................................13
Section 5.3. Obligations Not Affected........................................14
Section 5.4. Rights of Holders...............................................15
</TABLE>
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<TABLE>
<S> <C>
Section 5.5. Guarantee of Payment............................................15
Section 5.6. Subrogation.....................................................15
Section 5.7. Independent Obligations.........................................16
ARTICLE VI Covenants and Subordination
Section 6.1. Subordination...................................................16
Section 6.2. Pari Passu Guarantees...........................................16
ARTICLE VII Termination
Section 7.1. Termination.....................................................16
ARTICLE VIII Miscellaneous
Section 8.1. Successors and Assigns..........................................17
Section 8.2. Amendments......................................................17
Section 8.3. Notices.........................................................17
Section 8.4. Benefit.........................................................19
Section 8.5. Governing Law...................................................19
Section 8.6. Counterparts....................................................19
</TABLE>
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Guarantee Agreement, dated as of __________ __, ____, executed and
delivered by Everest Reinsurance Holdings, Inc., a Delaware corporation (the
"Guarantor") having its principal office at 477 Martinsville Road, Liberty
Corner, New Jersey 07938, and The Chase Manhattan Bank, a banking corporation
organized under the laws of the State of New York, as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Preferred Securities (as defined herein) of Everest Re Capital Trust, a
Delaware business trust (the "Issuer").
W i t n e s s e t h :
Whereas, pursuant to an Amended and Restated Trust Agreement, dated as of
__________ __, ____ (the "Trust Agreement"), among the Guarantor, as Depositor,
The Chase Manhattan Bank, as Property Trustee, Chase Manhattan Bank Delaware, as
Delaware Trustee and the Administrative Trustees named therein and the Holders
from time to time of undivided beneficial interests in the assets of the Issuer,
the Issuer is issuing $[ ] aggregate Liquidation Amount (as defined in
the Trust Agreement) of its [ ]% Preferred Securities (Liquidation Amount $25
per preferred security) (the "Preferred Securities") representing preferred
undivided beneficial interests in the assets of the Issuer and having the terms
set forth in the Trust Agreement;
Whereas, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Notes (as
defined in the Trust Agreement) of the Guarantor, which will be deposited with
The Chase Manhattan Bank, as Property Trustee under the Trust Agreement, as
trust assets; and
Whereas, as incentive for the Holders to purchase Preferred Securities the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Preferred Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.
Now, therefore in consideration of the purchase by each Holder of Preferred
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement to
provide as follows for the benefit of the Holders from time to time of the
Preferred Securities:
ARTICLE I
Interpretation and Definitions
Section 1.1. Interpretation.
<PAGE>
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to
them in Section 1.2;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice-versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
Section 1.2. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings:
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that the Issuer
shall not be deemed to be an Affiliate of the Guarantor. 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.
"Board of Directors" means either the board of directors of the
Guarantor or any duly authorized committee of that board.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
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"Debt" means with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent and
without duplication, (i) every obligation of such Person for money
borrowed; (ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person, (iv) every obligation of such Person
issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business); (v) every capital lease obligation of such
Person; (vi) all Other Financial Obligations (as hereinafter defined) of
such Person; (vii) every obligation of the type referred to in clauses (i)
through (vi) of another Person and all dividends of another Person the
payment of which, in either case, such Person has guaranteed or is
responsible or liable, directly or indirectly, as obligor or otherwise, and
(viii) all renewals, extensions, refundings, amendments or modifications of
any obligation of the type referred to in clauses (i) through (vii).
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided,
however, that, except with respect to a default in payment of any Guarantee
Payments, the Guarantor shall have received notice of default from the
Guarantee Trustee and shall not have cured such default within 30 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 or on behalf of the Issuer: (i) any accumulated
and unpaid Distributions (as defined in the Trust Agreement) required to be
paid on the Preferred Securities, to the extent the Issuer shall have funds
on hand available therefor at such time, (ii) the redemption price,
including all accumulated and unpaid Distributions to the date of
redemption (the "Redemption Price"), with respect to any Preferred
Securities called for redemption by the Issuer, to the extent the Issuer
shall have funds on hand available therefor at such time, and (iii) upon a
voluntary or involuntary termination, winding up or liquidation of the
Issuer, unless Notes are distributed to the Holders, the lesser of (a) the
aggregate of the Liquidation Amount of $25 per Preferred Security plus
accumulated and unpaid Distributions on the Preferred Securities to the
date of payment, to the extent that the Issuer shall have funds available
therefor at such time 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 in accordance with
applicable law and the Expense Agreement (as defined in the Trust
Agreement) (in either case, the "Liquidation Distribution").
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"Guarantee Trustee" means The Chase Manhattan Bank, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement, and thereafter means
each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
the Issuer, of any 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, the Guarantee Trustee, or any
Affiliate of the Guarantor or the Guarantee Trustee.
"Indenture" means the Indenture, dated as of __________ __, ____, as
supplemented and amended, between the Guarantor and The Chase Manhattan
Bank, as trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Preferred Securities" means,
except as provided by the Trust Indenture Act, a vote by the Holder(s),
voting separately as a class, of more than 50% of the aggregate Liquidation
Amount of all then outstanding Preferred Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman or a Vice Chairman of the Board of
Directors of such Person or the President or a Vice President of such
Person, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of such Person, and delivered to the Guarantee Trustee.
Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Guarantee Agreement (other than
the compliance certificate required by Section 2.4) include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each officer,
such condition or covenant has been complied with.
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"Other Financial Obligations" means, with respect to a Person, all
obligations to make payment pursuant to the terms of (i) securities
contracts and foreign currency exchange contracts, (ii) derivative
instruments, such as swap agreements (including interest rate and foreign
exchange rate swap agreements), cap agreements, floor agreements, collar
agreements, interest rate agreements, foreign exchange rate agreements,
options, commodity futures contracts, commodity option contracts, and (iii)
in the case of both (i) and (ii) above, similar financial instruments.
"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 Guarantee Trustee,
any Senior Vice President, any Vice President, any Assistant Vice
President, the Secretary, any Assistant Secretary, the Treasurer, any
Assistant Treasurer, any Senior Trust Officer, any Trust Officer or
Assistant Trust Officer or any other officer of the Corporate Trust
Department of the Guarantee Trustee 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.
"Senior Debt" means the principal of and any premium and interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Guarantor whether or not
such claim for post-petition interest is allowed in such proceeding) on
all Debt, whether incurred on or prior to the date of this Guarantee
Agreement or thereafter incurred, unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
provided that such obligations are not superior in right of payment to the
Notes or this Guarantee Agreement or to other Debt which is pari passu
with, or subordinated to, the Notes; provided, however, that Senior Debt
shall not be deemed to include (i) any Debt of the Guarantor which when
incurred and without respect to any election under Section 1111(b) of the
United States Bankruptcy Code of 1978, as amended, was without recourse to
the Guarantor, (ii) any Debt of the Guarantor to any of its subsidiaries,
(iii) Debt to any employee of the Guarantor, and (iv) any other debt
securities issued pursuant to the Indenture.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section
4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
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<PAGE>
Capitalized or otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.
ARTICLE II
Trust Indenture Act
Section 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions. If any
provision of this Guarantee Agreement 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 Guarantee Agreement as so modified or to be
excluded, as the case may be.
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
Section 2.2. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee (a) semiannually, on or before June 30 and December 31 of each year, a
list, in such form as the Guarantee Trustee may reasonably require, of the names
and addresses of the Holders (the "List of Holders") as of a date not more than
15 days prior to the delivery thereof, and (b) at such other times as the
Guarantee Trustee may request in writing, within 30 days after the receipt by
the Guarantor of any such request, a List of Holders as of a date not more than
15 days prior to the time such list is furnished, in each case to the extent
such information is in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Guarantee Trustee shall comply with its obligations under Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
Section 2.3. Reports by the Guarantee Trustee.
Not later than November 15 of each year, commencing November 15, 2000, the
Guarantee Trustee shall provide to the Holders such reports dated as of the
preceding September 15 as are required by Section 313(a) of the Trust Indenture
Act, if any, in the form
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<PAGE>
and in the manner provided by Section 313 of the Trust Indenture Act. The
Guarantee Trustee shall also comply with the other requirements of Section 313
of the Trust Indenture Act.
Section 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information, if
any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act,
such compliance certificate to be provided within 120 days of the end of each
fiscal year of the Guarantor.
Section 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
Section 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Preferred Securities
may, by vote, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.
Section 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders,
notices of all Events of Default known to the Guarantee Trustee, unless such
defaults have been cured before the giving of such notice, provided, however,
that, except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the Board of Directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible
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<PAGE>
Officer charged with the administration of this Guarantee Agreement shall have
obtained written notice, of such Event of Default from the Guarantor or a
Holder.
Section 2.8. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
Powers, Duties and Rights of the Guarantee Trustee
Section 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising its rights pursuant
to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read into this Guarantee
Agreement against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
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(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or opinions that
by any provision hereof or of the Trust Indenture Act are specifically
required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in Liquidation
Amount of the Preferred Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Guarantee
Agreement or adequate indemnity against such risk or liability is not
reasonably assured to it.
Section 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
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(i) The Guarantee Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and the
written advice or opinion of such legal counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted to be taken by it hereunder in
good faith and in accordance with such advice or opinion. Such legal
counsel may be legal counsel to the Guarantor or any of its Affiliates and
may be one of its employees. The Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this
Guarantee Agreement from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have provided
to the Guarantee Trustee such adequate security and indemnity as would
satisfy a reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Guarantee Trustee; provided that, nothing contained in this Section
3.2(a)(v) shall be taken to relieve the Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
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<PAGE>
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, and the Guarantee Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders of a Majority in Liquidation Amount of the Preferred Securities,
(B) may refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (C) shall be protected in
acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
Section 3.3. Compensation.
The Guarantor agrees to pay to the Guarantee 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) and to reimburse the Guarantee
Trustee upon request for all reasonable expenses, disbursements and advances
(including the reasonable fees and expenses of its attorneys and agents)
incurred or made by the Guarantee Trustee in accordance with any provision of
this Guarantee Agreement.
Section 3.4. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Guarantee Trustee, arising out of or in connection
with the acceptance or administration of this Guarantee Agreement, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
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duties hereunder. The Guarantee Trustee will not claim or exact any lien or
charge on any Guarantee Payments as a result of any amount due to it under this
Guarantee Agreement.
ARTICLE IV
Guarantee Trustee
Section 4.1. Guarantee Trustee: Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of Section
310(a) of the Trust Indenture Act. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority, then, for the purposes of this Section
4.1 and to the extent permitted by the Trust Indenture Act, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act, subject to the penultimate
paragraph thereof.
Section 4.2. Appointment, Removal and Resignation of the Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor.
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(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V
Guarantee
Section 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders. The Guarantor shall give prompt
written notice to the Guarantee Trustee in the event it makes any direct payment
hereunder.
Section 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee Agreement
and of any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Guarantee Trustee,
Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
Section 5.3. Obligations Not Affected.
13
<PAGE>
The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the 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 (other than an extension of time for payment
of Distributions that results from the extension of any interest payment
period on the Notes as provided in the Indenture), 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;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the 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 hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
Section 5.4. Rights of Holders.
14
<PAGE>
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
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 Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; provided, however, that, subject to Section 3.1, the Guarantee
Trustee shall have the right to decline to follow any such direction if the
Guarantee Trustee being advised by counsel determines that the action so
directed may not lawfully be taken, or if the Guarantee Trustee in good faith
shall, by a Responsible Officer or Officers of the Guarantee Trustee, determine
that the proceedings so directed would be illegal or involve it in personal
liability or be unduly prejudicial to the rights of the Holders not party to
such direction; and provided further that nothing in this Guarantee Agreement
shall impair the right of the Guarantee Trustee to take any action deemed proper
by the Guarantee Trustee and which is not inconsistent with such direction; and
(iv) any Holder may institute a legal proceeding directly against the Guarantor
to enforce its rights under this Guarantee Agreement, without first instituting
a legal proceeding against the Guarantee Trustee, the Issuer or any other
Person.
Section 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Notes to Holders as provided in the Trust
Agreement.
Section 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
Section 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities and
that the Guarantor shall
15
<PAGE>
be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence
of any event referred to in subsections (a) through (g), inclusive, of Section
5.3.
ARTICLE VI
Covenants and Subordination
Section 6.1. Subordination.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt of the Guarantor to the extent and
in the manner set forth in the Indenture. The obligations of the Guarantor under
this Guarantee Agreement do not constitute Senior Debt.
Section 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee Agreement shall rank
pari passu with the obligations of the Guarantor under any similar Guarantee
Agreements issued by the Guarantor on behalf of the holders of preferred
securities issued by any Issuer Trust (as defined in the Indenture).
ARTICLE VII
Termination
Section 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Notes to the Holders in exchange for all of
the Preferred Securities or (iii) full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Preferred Securities or
this Guarantee Agreement. The obligations of the Guarantor under Sections 3.3
and 3.4 shall survive any such termination.
ARTICLE VIII
Miscellaneous
16
<PAGE>
Section 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to
perform the Guarantor's obligations hereunder, the Guarantor shall not assign
its obligations hereunder.
Section 8.2. Amendments.
Except with respect to any changes which do not adversely affect the rights
of the Holders in any material respect (in which case no consent of the Holders
will be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than a Majority in Liquidation Amount of the
Preferred Securities. The provisions of Article VI of the Trust Agreement
concerning meetings or consents of the Holders shall apply to the giving of such
approval.
Section 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other Person as
the Guarantor may give notice to the Guarantee Trustee and the Holders:
Everest Reinsurance Holdings, Inc.
477 Martinsville Road
P.O. Box 830
Liberty Corner, New Jersey 07938
Facsimile No.: (908) 604-3450
Attention: General Counsel
(b) if given to the Issuer, at the Issuer's (and the Guarantee
Trustee's) address or facsimile number set forth below or such other
address or facsimile number as the Issuer or the Guarantee Trustee may give
notice to the Guarantee Trustee (if given by the Issuer) and the Holders:
17
<PAGE>
Everest Re Capital Trust
c/o Everest Reinsurance Holdings, Inc.
477 Martinsville Road
P.O. Box 830
Liberty Corner, New Jersey 07938
Facsimile No.: (908) 604-3450
Attention: General Counsel
with a copy to:
The Chase Manhattan Bank
379 Thornall Street
12th Floor
Edison, New Jersey 08837
Facsimile No.: (732) ___-____
Attention: Capital Markets Fiduciary Services
(c) if given to the Guarantee Trustee, at the Guarantee Trustee's
address or facsimile number set forth below or such other address or
facsimile number as the Guarantee Trustee may give notice to the Guarantor
and the Holders:
The Chase Manhattan Bank
379 Thornall Street
12th Floor
Edison, New Jersey 08837
Facsimile No.: (732) ___-____
Attention: Capital Markets Fiduciary Services
(d) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
Section 8.4. Benefit.
18
<PAGE>
This Guarantee Agreement is solely for the benefit of the Holders and is
not separately transferable from the Preferred Securities.
Section 8.5. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAWS PROVISIONS THEREOF.
Section 8.6. Counterparts.
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.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
19
<PAGE>
In Witness Whereof, the undersigned have executed this Guarantee Agreement
as of the date first above written.
Everest Reinsurance Holdings, Inc.
By:
------------------------------
Name:
Title:
The Chase Manhattan Bank
as Guarantee Trustee
By:
------------------------------
Name:
Title:
<PAGE>
Exhibit 12.1
Everest Reinsurance Holdings, Inc.
Ratio of Earnings/(Losses) to Fixed Charges
(Dollars in thousands)
<TABLE>
<CAPTION>
Period Ended Years Ended December 31,
September 30, 1999 1998 1997 1996 1995 1994
------------------ ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earnings: Income/(loss)
before income taxes/(benefits) $ 146,922 $ 212,676 $ 207,300 $ 143,839 $ (26,568) $ (11,982)
Fixed Charges:
Assumed interest component
of rent expense 904 1,769 1,633 1,776 2,443 2,082
Interest expense 755 -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------
Total fixed charges 1,659 1,769 1,633 1,776 2,443 2,082
---------- ---------- ---------- ---------- ---------- ---------
Earnings plus fixed charges $ 148,581 $ 214,445 $ 208,933 $ 145,615 $ (24,125) $ (9,900)
========== ========== ========== ========== ========== =========
Ratio of earnings/(losses) to fixed
charges 89.6 to 1 121.2 to 1 127.9 to 1 82.0 to 1 (1) (1)
========== ========== ========== ========== ========== =========
</TABLE>
(1) Principally as a result of non-recurring charges, Everest Holdings had a
deficiency of earnings in 1995 and 1994 of $26,568 and $11,982,
respectively, to cover fixed charges.
<PAGE>
Exhibit 23.1
Consent of Independent Accountants
----------------------------------
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 No. 333-87363 of Everest Reinsurance Holdings, Inc. of our
report dated February 17, 1999 except for Note 14, as to which the date is March
11, 1999 relating to the financial statements and financial statement schedules,
which appears in Everest Reinsurance Holdings, Inc. Annual Report on Form 10-K.
We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
November 16, 1999
New York, New York
<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 CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
----------------------------------------------
EVEREST REINSURANCE HOLDINGS, INC.
(Exact name of obligor as specified in its charter)
Delaware 22-3263609
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
477 Martinsville Road
P.O. Box 830
Liberty Corner, New Jersey 07938
(Address of principal executive offices) (Zip Code)
----------------------------------------------
Senior Notes
(Title of the indenture securities)
----------------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 8th day of November, 1999.
THE CHASE MANHATTAN BANK
By /s/ Timothy E. Burke
-----------------------------------
Timothy E. Burke
Vice President
-3-
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1999, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Millions
<TABLE>
<CAPTION>
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 13,119
Interest-bearing balances............................... 6,761
Securities:................................................
Held to maturity securities................................ 892
Available for sale securities.............................. 42,965
Federal funds sold and securities purchased under
agreements to resell.................................... 32,277
Loans and lease financing receivables:
Loans and leases, net of unearned income $130,602
Less: Allowance for loan and lease losses 2,551
Less: Allocated transfer risk reserve........... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve.................................. 128,051
Trading Assets............................................. 41,426
Premises and fixed assets (including capitalized
leases).................................................. 3,190
Other real estate owned.................................... 28
Investments in unconsolidated subsidiaries and
associated companies..................................... 182
Customers' liability to this bank on acceptances
outstanding.............................................. 901
Intangible assets.......................................... 2,010
Other assets............................................... 14,567
------
TOTAL ASSETS............................................... $286,369
</TABLE>
========
-4-
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
<S> <C>
Deposits
In domestic offices..................................................... $101,979
Noninterest-bearing ......................................... $42,241
Interest-bearing ............................................ 59,738
In foreign offices, Edge and Agreement
subsidiaries and IBF's............................................... 76,395
Noninterest-bearing ........................................... $ 4,645
Interest-bearing ............................................ 71,750
Federal funds purchased and securities sold under
agreements ments to repurchase.......................................... 36,604
Demand notes issued to the U.S. Treasury.................................. 1,001
Trading liabilities....................................................... 30,287
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less........................... 3,606
With a remaining maturity of more than one year
through three years...................................................... 14
With a remaining maturity of more than three years...................... 91
Bank's liability on acceptances executed and outstanding.................. 901
Subordinated notes and debentures......................................... 5,427
Other liabilities......................................................... 11,247
TOTAL LIABILITIES......................................................... 267,552
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus............................. 0
Common stock.............................................................. 1,211
Surplus (exclude all surplus related to preferred stock)................. 11,016
Undivided profits and capital reserves.................................... 7,317
Net unrealized holding gains (losses)
on available-for-sale securities ........................................ (743)
Accumulated net gains (losses) on cash flow hedges........................ 0
Cumulative foreign currency translation adjustments....................... 16
TOTAL EQUITY CAPITAL...................................................... 18,817
--------
TOTAL LIABILITIES AND EQUITY CAPITAL...................................... $286,369
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named
bank, do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued
by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of
Condition and declare that it has been
examined by us, and to the best of our
knowledge and
belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
WILLIAM B. HARRISON, JR. ) DIRECTORS
FRANK A. BENNACK, JR. )
-5-
<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 CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
_____________________________________________
EVEREST REINSURANCE HOLDINGS, INC.
(Exact name of obligor as specified in its charter)
Delaware 22-3263609
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
477 Martinsville Road
P.O. Box 830
Liberty Corner, New Jersey 07938
(Address of principal executive offices) (Zip Code)
_____________________________________________
Junior Subordinated Notes
(Title of the indenture securities)
_____________________________________________
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551.
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference. On July 14, 1996, in connection with
the merger of Chemical Bank and The Chase Manhattan Bank (National Association),
Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 8th day of November, 1999.
THE CHASE MANHATTAN BANK
By /s/ Timothy E. Burke
------------------------------------
Timothy E. Burke
Vice President
-3-
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1999, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Millions
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin................................ $ 13,119
Interest-bearing balances........................ 6,761
Securities:........................................
Held to maturity securities........................ 892
Available for sale securities...................... 42,965
Federal funds sold and securities purchased under
agreements to resell............................. 32,277
Loans and lease financing receivables:
Loans and leases, net of unearned income $130,602
Less: Allowance for loan and lease losses 2,551
Less: Allocated transfer risk reserve..... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve........................... 128,051
Trading Assets..................................... 41,426
Premises and fixed assets (including capitalized
leases).......................................... 3,190
Other real estate owned............................ 28
Investments in unconsolidated subsidiaries and
associated companies............................. 182
Customers' liability to this bank on acceptances
outstanding...................................... 901
Intangible assets.................................. 2,010
Other assets....................................... 14,567
--------
TOTAL ASSETS....................................... $286,369
========
</TABLE>
-4-
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
Deposits
In domestic offices.............................................. $101,979
Noninterest-bearing ..................................... $42,241
Interest-bearing ........................................ 59,738
------
In foreign offices, Edge and Agreement
subsidiaries and IBF's............................................... 76,395
Noninterest-bearing ....................................... $ 4,645
Interest-bearing ........................................ 71,750
Federal funds purchased and securities sold under agree-
ments to repurchase..................................................... 36,604
Demand notes issued to the U.S. Treasury.................................. 1,001
Trading liabilities....................................................... 30,287
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less........................... 3,606
With a remaining maturity of more than one year
through three years..................................................... 14
With a remaining maturity of more than three years...................... 91
Bank's liability on acceptances executed and outstanding.................. 901
Subordinated notes and debentures......................................... 5,427
Other liabilities......................................................... 11,247
TOTAL LIABILITIES......................................................... 267,552
-------
EQUITY CAPITAL
Perpetual preferred stock and related surplus............................. 0
Common stock.............................................................. 1,211
Surplus (exclude all surplus related to preferred stock)................. 11,016
Undivided profits and capital reserves.................................... 7,317
Net unrealized holding gains (losses).....................................
on available-for-sale securities ....................................... (743)
Accumulated net gains (losses) on cash flow hedges........................ 0
Cumulative foreign currency translation adjustments....................... 16
TOTAL EQUITY CAPITAL...................................................... 18,817
--------
TOTAL LIABILITIES AND EQUITY CAPITAL...................................... $286,369
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named
bank, do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued
by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
WILLIAM B. HARRISON, JR. ) DIRECTORS
FRANK A. BENNACK, JR. )
-5-
<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 CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
EVEREST RE CAPITAL TRUST
(Exact name of obligor as specified in its charter)
Delaware Applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
c/o Everest Reinsurance Holdings, Inc.
477 Martinsville Road
P.O. Box 830
Liberty Corner, New Jersey 07938
(Address of principal executive offices) (Zip Code)
---------------------------------------------
Preferred Securities
(Title of the indenture securities)
---------------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference. On July 14, 1996, in connection with
the merger of Chemical Bank and The Chase Manhattan Bank (National Association),
Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 8th day of November, 1999.
THE CHASE MANHATTAN BANK
By /s/ Timothy E. Burke
----------------------------
Timothy E. Burke
Vice President
-3-
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1999, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Millions
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin............................. $ 13,119
Interest-bearing balances........................ 6,761
Securities:
Held to maturity securities...................... 892
Available for sale securities.................... 42,965
Federal funds sold and securities purchased under
agreements to resell............................. 32,277
Loans and lease financing receivables:
Loans and leases, net of unearned income...$130,602
Less: Allowance for loan and lease losses.. 2,551
Less: Allocated transfer risk reserve...... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve........................ 128,051
Trading Assets..................................... 41,426
Premises and fixed assets (including capitalized
leases).......................................... 3,190
Other real estate owned............................ 28
Investments in unconsolidated subsidiaries and
associated companies............................. 182
Customers' liability to this bank on acceptances
outstanding...................................... 901
Intangible assets.................................. 2,010
Other assets....................................... 14,567
--------
TOTAL ASSETS....................................... $286,369
========
</TABLE>
-4-
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
Deposits
<S> <C> <C>
In domestic offices.......................................... $101,979
Noninterest-bearing ......................................... $42,241
Interest-bearing ............................................ 59,738
-------
In foreign offices, Edge and Agreement
subsidiaries and IBF's.................................................. 76,395
Noninterest-bearing ............................................$ 4,645
Interest-bearing ............................................. 71,750
Federal funds purchased and securities sold under agree-
ments to repurchase....................................................... 36,604
Demand notes issued to the U.S. Treasury.................................. 1,001
Trading liabilities....................................................... 30,287
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less........................... 3,606
With a remaining maturity of more than one year
through three years................................................ 14
With a remaining maturity of more than three years...................... 91
Bank's liability on acceptances executed and outstanding.................. 901
Subordinated notes and debentures......................................... 5,427
Other liabilities......................................................... 11,247
TOTAL LIABILITIES......................................................... 267,552
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus............................. 0
Common stock.............................................................. 1,211
Surplus (exclude all surplus related to preferred stock)................. 11,016
Undivided profits and capital reserves.................................... 7,317
Net unrealized holding gains (losses)
on available-for-sale securities ......................................... (743)
Accumulated net gains (losses) on cash flow hedges........................ 0
Cumulative foreign currency translation adjustments....................... 16
TOTAL EQUITY CAPITAL...................................................... 18,817
--------
TOTAL LIABILITIES AND EQUITY CAPITAL...................................... $286,369
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named
bank, do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued
by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
WILLIAM B. HARRISON, JR. ) DIRECTORS
FRANK A. BENNACK, JR. )
-5-
<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 CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
----------------------------------------
EVEREST REINSURANCE HOLDINGS, INC.
(Exact name of obligor as specified in its charter)
Delaware 22-3263609
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
477 Martinsville Road
P.O. Box 830
Liberty Corner, New Jersey 07938
(Address of principal executive offices) (Zip Code)
----------------------------------------
Guarantee with respect to Preferred Securities of
Everest Re Capital Trust
(Title of the indenture securities)
- --------------------------------------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference. On July 14, 1996, in connection with
the merger of Chemical Bank and The Chase Manhattan Bank (National Association),
Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 8th day of November, 1999.
THE CHASE MANHATTAN BANK
By /s/ Timothy E. Burke
----------------------------
Timothy E. Burke
Vice President
-3-
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1999, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Millions
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin................................ $ 13,119
Interest-bearing balances........................ 6,761
Securities:........................................
Held to maturity securities........................ 892
Available for sale securities...................... 42,965
Federal funds sold and securities purchased under
agreements to resell............................. 32,277
Loans and lease financing receivables:
Loans and leases, net of unearned income $130,602
Less: Allowance for loan and lease losses 2,551
Less: Allocated transfer risk reserve.... 0
-------
Loans and leases, net of unearned income,
allowance, and reserve........................... 128,051
Trading Assets..................................... 41,426
Premises and fixed assets (including capitalized
leases).......................................... 3,190
Other real estate owned............................ 28
Investments in unconsolidated subsidiaries and
associated companies............................. 182
Customers' liability to this bank on acceptances
outstanding...................................... 901
Intangible assets.................................. 2,010
Other assets....................................... 14,567
--------
TOTAL ASSETS....................................... $286,369
========
</TABLE>
-4-
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
Deposits
<S> <C> <C>
In domestic offices...................................... $101,979
Noninterest-bearing ..................................... $42,241
Interest-bearing ........................................ 59,738
-------
In foreign offices, Edge and Agreement
subsidiaries and IBF's.................................................. 76,395
Noninterest-bearing ........................................ $ 4,645
Interest-bearing ............................................. 71,750
Federal funds purchased and securities sold under agree-
ments to repurchase............................................. 36,604
Demand notes issued to the U.S. Treasury........................ 1,001
Trading liabilities............................................. 30,287
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less................. 3,606
With a remaining maturity of more than one year
through three years...................................... 14
With a remaining maturity of more than three years....... 91
Bank's liability on acceptances executed and outstanding 901
Subordinated notes and debentures............................... 5,427
Other liabilities............................................... 11,247
TOTAL LIABILITIES............................................... 267,552
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus................... 0
Common stock.................................................... 1,211
Surplus (exclude all surplus related to preferred stock)....... 11,016
Undivided profits and capital reserves.......................... 7,317
Net unrealized holding gains (losses)
on available-for-sale securities ............................... (743)
Accumulated net gains (losses) on cash flow hedges.............. 0
Cumulative foreign currency translation adjustments............. 16
TOTAL EQUITY CAPITAL............................................ 18,817
--------
TOTAL LIABILITIES AND EQUITY CAPITAL............................ $286,369
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named
bank, do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued
by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
WILLIAM B. HARRISON, JR. ) DIRECTORS
FRANK A. BENNACK, JR. )
-5-
